Equal Pay for Male and Female Workers: Employers’ New Reporting Obligations

The deadline for implementing the provisions of the new amendment to the Male and Female Workers (Equal Pay) Law is June 1, 2022. The purpose of the amendment is to increase organizations’ transparency about gender pay gaps. The ultimate goal is to reduce gender discrimination and promote equal employment terms between men and women in Israel.

Considering the amendment’s complexity, we recommend the following employers prepare early:

(1)  Any employer obligated to file periodic and immediate reports by virtue of the Israeli Security Law Regulations, NPOs, and water and sewage corporations.

(2)  Any employer employing more than 518 employees.

What Are Employers’ New Obligations?

The specified types of employers are required to collect data about pay gaps in their organizations. They are also to prepare two distinct reports annually. The employers must report by no later than June 1 of each year, regarding the year preceding the report date:

(1)  an internal report.

(2)  a public report to be publicized on the organization’s website or through another appropriate channel.

Additionally, these employers must deliver an annual report to every employee. The report should contain information about the employee’s assigned group and information about the pay gaps in that group in percentages.

What Must in the Internal Report Include?

The internal report must present the employee segmentation:

1. The division into groups according to types of employees.

2. Types of positions or types of ranking depending upon the type and nature of the workplace.

The internal report must also report the employees’ average wage in each group, segmented by gender and appointment percentage, and specify the pay gaps between men and women in percentages in each group, as well as additional data.

What Must the Report to Employees Include?

The report to employees must contain information about the group to which the employee is assigned and information about the pay gaps in that group in percentages, provided that the furnishing of information does not violate any other law (such as infringe on employees’ privacy).

What Must the Public Report Include?

The public report must contain data in percentages about the pay gaps in the employees’ average wage by employee segmentation, by appointment percentage, by gender and more.

Should an Employer Expect Sanctions?

According to its current wording, the law does not impose any sanctions (whether administrative, criminal or civil) on employers that do not fulfill their obligation to collect and publish data as prescribed in the law.

However, the labor court has the authority to award the payment of pay differentials in favor of plaintiffs. In this sense, the law increases the employer’s burden of proof, and proper implementation of the law’s provisions, including segmentation of the types of employees and the pay gaps between them, may help employers properly manage claims for the payment of pay differentials.

Additional questions will definitely arise in relation to implementing the legislative amendment (such as the method of reporting to employees, preventing infringement of privacy, etc.).

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We are at your service if you have any questions about implementing this legislative amendment.