Under the new rules, contractors will employ foreign workers via manpower agencies instead of directly. The idea behind the reform, which was drafted by the Finance and Industry Ministries, was to reduce the potential for corruption in the hiring process, make it easier to supervise the foreign workers' employment and make them more expensive to hire, thereby encouraging contractors to employ Israeli workers.

By March 15, which is the deadline for applying, dozens of manpower agencies are expected to apply for permits to employ foreign workers. To receive a permit, the agency must have existed for at least a month before submitting its application; it must promise to hire the workers only to construction firms; its CEO must have at least five years of managerial experience, including at least one year of responsibility for 350 workers or more; and neither the agency nor its senior executives can have been convicted of a crime, or of violating the labor laws, in the past five years.

However, a source involved in the process said, some of those applying for permits include people with close connections to former senior officials of manpower agencies and of the Government Employment Service whom the police have investigated for alleged corruption in the employment of foreign workers.

Agencies that meet the government's criteria will be allowed to employ between 350 and 700 foreign workers, whom they will then hire out to contractors. Since the government has authorized the building industry to employ 17,500 foreign workers this year, this means, assuming an average of 500 workers per agency, that there will be some 35 agencies.

The agencies must also prove that they have enough money to pay their workers for a year, as well as various fees and guarantees to the government. For an agency with 700 workers, this sum works out to about NIS 9 million.

In addition, the agencies must pledge not to collect any money from the workers, and any agency that violates this pledge will lose its license, the Industry Ministry said.

But an industry source said that some agencies are already planning to charge their workers $1 for every hour of work.