Equal Pay: new reporting obligation for employers | Barnea Jaffa Lande & Co.
The deadline for implementing the provisions of the New Amendment to the Male and Female Workers (Equal Remuneration) Act is June 1, 2022. The aim of the amendment is to increase the transparency of organizations on the gender pay gaps. The ultimate goal is to reduce gender discrimination and promote equal employment conditions between men and women in Israel.
Given the complexity of the amendment, we recommend that the following employers prepare early:
(1) Any employer required to file periodic and immediate reports under the Israel Security Law Regulations, NPOs and water and sanitation companies.
(2) Any employer employing more than 518 employees.
What are the new obligations of employers?
The specified employer types are required to collect data on pay gaps in their organizations. They must also prepare two separate reports annually. Employers must declare by June 1 of each year, for the year preceding the date of the report:
(1) an internal report.
(2) a public report be posted on the organization’s website or through another appropriate channel.
In addition, these employers must provide an annual report report to each employee. The report should contain information about the group assigned to the employee and information about the pay gaps in this group in percentages.
What should be included in the internal report Include?
The internal report must present the segmentation of employees:
1. The division into groups according to the types of employees.
2. Types of positions or types of classification depending on the type and nature of the workplace.
The internal report must also account for the employees average salary in each group, segmented by gender and appointment percentage, and specifies the percentage pay gaps between men and women in each group, as well as additional data.
What should the employee report contain?
The report to employees must contain information about the group to which the employee is assigned and information about pay differentials within that group as a percentage, provided that the provision of information does not violate any other law (such as a breach of employee privacy).
What should the public report do? Include?
The public report must contain data in percentages on salary gaps in average employee salary by employee segmentation, appointment percentage, gender and more.
Should an employer expect sanctions?
According to its current wording, the law does not impose any sanction (whether administrative, criminal or civil) on employers who do not fulfill their obligation to collect and publish data as prescribed by law.
However, the Labor Court has the power to award payment of wage differentials in favor of claimants. In this sense, the law increases the burden of proof on the employer, and the proper implementation of the provisions of the law, including the segmentation of types of employees and the wage differentials between them, can help employers correctly manage requests for payment of pay gaps.
Additional questions will certainly arise in connection with the implementation of the legislative change (such as the method of reporting to employees, the prevention of privacy breaches, etc.).