The Bank of Israel called on the government on Wednesday to ease rules on Palestinian workers who often purchase work permits in the country illegally to bypass restrictions tying them to a single employer.
About 20,000 Palestinian workers, or 30% of the Palestinian workforce in Israel, pay a monthly fee to obtain a permit with one employer and then work illegally for another, Bank of Israel research shows.
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Tens of thousands of Palestinians legally work in Israel in jobs providing higher pay than those available in Judea and Samaria or in the Gaza Strip.
According to the Bank of Israel, three-quarters of Palestinians who purchased work permits worked in construction.
The bank estimated annual revenue from the permit trade to be around 480 million shekels ($136 million), with about 120 million shekels ($34 million) in profits to permit traders.
The report said the 2,000 shekel ($569) monthly fee cancelled out any worker income gains. Palestinians who purchased permits made 10,100 shekels ($2,870) on average per month compared to 7,800 shekels ($2,200) for those who obtained them legally.
The Bank of Israel urged the government to implement reforms to the work permit system that were approved in 2016 and which allow Palestinian workers to work for different employers.
"[Cancelling] the obligation for a Palestinian worker to work only for a pre-defined employer is expected to enhance the efficiency of the allocation of Palestinian workers, increase their output and income, [and] significantly reduce the illegal trade in work permits," the bank said.
