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Israel: New requirements for companies to report gender-based pay data

Future of Work|Total Rewards|Health and Benefits

September 17, 2020

Companies with more than 518 employees must report gender-based pay data, including averages and differentials, to employees as well as the public.

Employer Action Code: Act

The government has published an amendment to the Equal Pay for Male and Female Employees Law (1996), which extends to many more companies the requirement to report gender-based pay data and expands significantly the type and detail of data to be reported. Currently, such reporting mandates generally apply only to certain public entities. The amendment becomes effective on October 25, 2020 (two months after its publication).

Key details

  • All companies with more than 518 (not a typo) employees are subject to the new rules set forth in the amendment. From June 1, 2022, the minister of labor, welfare and social services will have the authority to extend application of the amendment to smaller companies, subject to approval of the minister of finance and the Knesset’s Health and Welfare Committee.
  • Annually, affected companies must:
    • Prepare an internal analysis detailing the average pay and the percentage differential in average pay between male and female employees. The report must also contain gender-related data regarding those employees earning below the company’s average pay. The amendment prescribes specific methodological and content requirements, such as the employee groupings the analysis must cover.
    • Disclose to each employee information based on the analysis, including their own internal classification (such as employee type, role and level), the applicable employee group to which the employee belongs and the gender-based percentage average pay differential for the group, provided such disclosure is not prohibited by any other legal provisions.
    • Publish an external report (on the company’s website, if applicable), based on the internal analysis, containing the gender-related average pay data, percentage differentials by employee group as well as gender distribution for employees with below-average pay. Companies may also separately provide within the published report further explanatory information. Any data presented should not enable identification of specific employee groups or individual employees.
  • The amendment’s requirements first apply for calendar year 2021, with a compliance deadline of June 1, 2022.

Employer implications

Affected employers should analyze the details of the new requirements and begin to organize their processes for capturing and ultimately communicating the necessary information.

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