Since October 7, 2023, Israel has been rapidly replacing its Palestinian labor force with foreign workers. 250,000 foreign workers are already in Israel and their number is set to rise to 330,000. Many unseen challenges lay behind these numbers, the most substantial of which is the question of the housing that employers are obligated to provide for their foreign employees. The law stipulates a detailed definition of suitable housing and some companies are renting entire buildings and converted them into homes. But evidence of crowding and poor conditions is increasing and the government's solutions are mostly on paper.
"It's like an Israeli going on relocation," says Yoki Moshonov, CEO of Ovedly, a company that provides services to foreign workers in Israel. "Here they get five or six times the average salary than in their countries of origin. They come to Israel for just one purpose - to earn money for their families. They send 80% of their salary to their families, make no trouble, and are regarded as excellent workers. The employers I work with tell me, 'They don't take sick leave, don't smoke, get to work on time - what did you bring me? I never imagined they would be so good.'"
Israel now has 250,000 legal and illegal foreign workers, the highest number ever, according to Israel Population and Immigration Authority figures, with more to come.
After October 7, 2023, Israel decided to close its border crossings in Judea and Samaria with the Palestinian Authority and barred the entry of Palestinian workers into Israel. An estimated 150,000 Palestinian workers were regularly entering Israel before the war, of whom 92,000 were working legally, many of them in the construction industry. Only 20,000 Palestinian workers currently work in Israel, primarily in essential enterprises and communities beyond the Green Line.
The situation required action to fill the gap. Israel began importing unprecedented numbers of foreign workers - initially via bilateral agreements (agreements between Israel and other countries for importing labor to Israel) and later also "private imports" directly from foreign countries through authorized companies.
In May 2024, the government for the first time established a new ceiling for foreign workers in the Israeli economy - 3.3% of the population in Israel. This currently amounts to just over 330,000 foreign workers.
Keep in mind that the stay of every foreign worker in Israel lasts for five years and three months and that many of them have arrived only in the past two years. To this should be added the remaining unused quota and the plan to import 50,000 more foreign workers for the retail and services sector spearheaded by Minister of Economy and Industry Nir Barkat.
Population and Immigration Authority figures show that 26.5% of all current legal and illegal foreign workers are from Thailand, 21.7% from India, 11.8% from China, 11.2% from Sri Lanka, 9.5% from the Philippines, 8.9% from Uzbekistan, 4.4% from Moldovia, and 1.7% from Nepal.
According to every indication, the current government has no plans to bring Palestinian workers back to Israel, certainly not in the previous numbers, and intends to rely mainly on foreign workers from other countries.
In contrast to the Palestinian workers, however (many of whom return home every day), the foreign workers come to Israel for a prolonged stay and require the same services as anyone else: proper housing, health and welfare services, etc. Since the state is bringing these workers, it is also responsible for their living conditions, above all housing.
The current situation, including Israel's severe housing crisis, entails a trap. How can Israel find real estate solutions and provide services for all the 330,000 workers expected to arrive?
"15 People sleeping in two beds"
The situation is already difficult. The foreign workers regulations state explicitly what constitutes appropriate housing for a foreign worker: a sleeping area of at least four square meters per worker, bedding, a separate wardrobe or separate compartment in a wardrobe with a lock, electrical heating and ventilation, kitchenware and tableware, a refrigerator, bathrooms and showers, water, electricity, laundry arrangements, and fire extinguishers. Every employer has the legal obligation to provide such accommodation to every foreign worker during the entire period of their employment and for seven days after their employment ends.
These requirements, however, are not always observed in practice. "In our inspections, we find violations in every single industry," says Population and Immigration Authority Investigation and Intelligence Department senior head Shimon Zigzag. "There are extreme cases, for example workers housed in a cold storage room, housing on a waste site, workers who light a fire in the house to keep warm because they have no electricity or gas, and workers living without authorization on a construction site or on the premises of an enterprise."
Zigzag states that unfortunately, he has seen no improvement in the situation over the years. "I want to stress that most employers follow the rules, but those who do not fail to realize that housing is a very serious matter. In some cases, the employers are completely preoccupied with preventing the imminent collapse of their businesses and dealing with debts and loans. The last thing that interests them is a broken door handle or a malfunctioning toilet. These things gradually accumulate and become unbearable."
The workers themselves describe tough conditions. "My experience in Israel is very different from what I expected. There is often a wide gap between what was promised and the actual conditions," a foreign worker from India says. "The promises about employment and housing were not kept. The bathroom in my current living quarters doesn't even have a door. Heavy trucks unload soil nearby and dust enters the cooking area, which does not even have a water faucet. Four people are living in a corridor-like room that has little ventilation. I'm not asking for luxury housing, but making the existing buildings more livable wouldn't even cost very much."
Another worker says, "We sleep in two double beds placed in a small room. There are 12-15 people in the apartment, which has two bathrooms. The main problem is the frequent replacement of the rooms because the work is not continuous. They ask us to change apartments every week. It's hard for me to bear this again and again and I get no clear answers when I complain. Anyone who complains about anything either gets no more work or his room is changed frequently."
Complaining about the difficulty in combating these problems with the currently available means, Zigzag says, "The rate at which the foreign workers are arriving is unprecedented, but it is all taking place on the basis of the same number of positions in the Foreign Workers Administration and before that in the Enforcement Administration. This number has not increased in accordance with the rise in the number of foreign workers, even though the cabinet decision included the providing of additional positions. We've been talking about increasing the number of positions for two and a half years already. As of now, the number is still the same: 160 or 170 positions. If more people were working here, we could accomplish more."
Yonatan Primo, CEO of the Central Bureau for Foreign Workers (a private company), claims that the situation is not so bad. "Relatively speaking, Israel is a very good country for foreign workers. The laws do a good job of defining the obligation to provide suitable housing. I've met foreign workers who tell me that their home in their country of origin isn't as good as the apartment that they were given here."
"The market is becoming large and more complex"
Private companies are making strenuous efforts to overcome the housing problem to keep the workers in Israel. Explaining his modus operandi, Primo says, "The employer maps where he needs foreign workers and how many of them in each branch. We get the table and start searching for housing for these workers according to it, so that it will be ready for them even before they arrive in Israel."
"We know ahead of time from which country the workers are coming, so we do our best to have workers of the same origin working at the same place in each apartment," Primo adds. "It's important that they both have a culture in common and be doing the same kind of work. The law doesn't require anything like this, but we discovered over time that it is very significant. When the workers don't speak the same language, roommates have misunderstandings. If they don't work in the same place, the differences in pay can create friction."
Nathalie (Shimon) Weinstein, CEO at personnel corporation LDM Global Hire, which employs foreign workers in the construction and renovation sector, adds, "Every worker is a complete world. As soon as he reaches Israel, he must be given a few days of grace to get used to the surroundings, people, food, and culture. Arriving in a foreign country isn't easy."
Where housing is concerned, Weinstein says, "Living quarters are selected according to one main criterion - where the people are going to work. We strive to house them as close as possible to their workplace."
"Proximity to the workplace is the really important thing," Moshonov adds, "particularly in retail and services. Some restaurants are open until three in the morning. They work on weekends when there's no public transport. The living quarters have to be 15 or 20 minutes at the most by bicycle from the workplace, or at least in an area with reasonable public transport."
Eliran Aharonov, CEO of Living, which provides housing solutions for foreign workers, says that the facilities operated by his company are usually hostels or residential buildings converted to housing for foreign workers. "A single site with several apartments together provides a concentrated housing solution. In many cases, large companies outline their needs in advance: how many workers there will be, what the apartments will look like, what should be in each apartment, and what services are needed for the compound. We adapt the solution to these needs while complying with the standards," he explains.
"We have all sorts of housing options," Moshonov says. "For example, there's a building that we're renting in Petah Tikva with almost 200 foreign workers - a converted retirement home. The character of the rooms and the general structure are very suitable for us. There's a central kitchen, a dining room, firefighting approvals, emergency exits, etc. Finding such buildings is a real challenge. In other cases, we house the workers in ordinary apartments. We have a whole array of operations workers searching for apartments through both real estate agents and search platforms like Yad2."
"For many years, this sector was very widely dispersed," Moshonov adds. "Searching for workers, apartments, services, and suppliers - it was all done by telephone, WhatsApp groups, bulletin boards, and databases and needed a lot of time and resources. This market is becoming larger and more complex - these methods are no longer any good. You need infrastructure to connect the worker, the employer, the personnel agency, the apartment, and the services that they need. There are private ventures like this now, such as the Baclick portal, which concentrates all of the necessary services in one place."
The solutions being furthered by the state - and their status
While efforts are being made in the field to provide private solutions, it appears that the state is dragging its feet in the creation of the legal and physical infrastructure. There are plenty of ideas and plans, but as of now, no real major solution is materializing.
In view of the large number of foreign workers who had entered with more expected to follow, a special directors general committee on the subject of foreign workers in Israel was formed in May 2024. This committee, however, is not dealing with the subject of housing for foreign workers; it is setting quotas, dictating sectors in which foreign workers can be employed, etc. As far as the state is concerned, providing housing for foreign workers is the employer's responsibility.
Meanwhile, the Ministry of Construction and Housing is working on preparations for housing foreign workers in existing buildings with an emphasis on rental housing. The Israel Land Authority is planning a survey to locate relevant sites for temporary housing for foreign workers. The Administration of Planning is also preparing a planning mechanism that will provide a temporary solution for the housing needs of future foreign workers. As of now, however, these are just ideas on paper.
The Knesset has discussed an initiative being promoted by Ministry of the Economy and Industry Director General Moti Gamish for the establishment of giant residential complexes for foreign workers that can house several thousand workers. Gamish also proposed a pilot program for constructing one such complex for 5,000 foreign workers in the Ne'ot Hovav Industrial Zone. No real progress has been achieved since the last debate on the subject in April 2026, however. With the elections now approaching, it appears that legislation on the matter will have to wait for the next Knesset.
Aharonov, one of the sponsors of the idea, emphasizes that there will be no alternative to construction of large residential complexes for foreign workers. "As the number of foreign workers in Israel rises, they must be provided with organized and well-defined housing solutions. The state will have to play a role in promoting and building such complexes," he says.
Moshonov explains that despite all the ideas, legislation in this area is far in the future. "Even if a law had been passed, it would be put into action only three or four years from now at best. By then, the market will be swamped with foreign workers and as of now there is no solution from any government agency involved in this. The state enacted laws and regulations to make up for the shortage in personnel, but no proper housing solution has been devised. The state refrained from investing resources in such a solution in the past and is still doing so today."
One measure that the government has approved is in the framework of National Outline Plan 35, which defines principles for construction, development, and preservation in Israel, is the regulation of housing for foreign workers in agriculture. Under Amendment 5A of the Outline Plan, housing for foreign workers in the sector "should be part of the community and social fabric." This amendment is designed to expedite the construction of such complexes for foreign workers - but so far only in the agricultural sector.
What about accompanying services for the foreign workers? Every worker arriving in Israel is entitled to health insurance in case of medical need, but the Ministry of Health says that no special preparations in the health system for absorbing the masses of foreign workers whose arrival was initiated by the state are necessary.
"According to the information in the hands of the Ministry of Health, there is no indication that the employment of foreign workers in Israel is generating an exceptional burden on the health and welfare system," a Ministry of Health spokeswoman stated. "It should be kept in mind that there are already hundreds of thousands of foreign workers in Israel. By law, an employer of a foreign worker is obligated to arrange medical health insurance for him during the period of his employment before the worker's arrival in Israel is approved."
Published by Globes, Israel business news - en.globes.co.il - on August 23, 2026.
© Copyright of Globes Publisher Itonut (1983) Ltd., 2026.