Israel Gender Pay Gap Reporting: What You Need to Know

To find the full text of the global pay reporting law in Israel, refer to the Equal Pay for Female and Male Workers Law (as amended in 2020).

Covered employers in Israel are required to prepare three reports, which serve different purposes:

• Prepare an internal report and keep it on file. This report is subject to potential governmental inspection.
• Prepare a public report that will be shared on your company website or otherwise made public. This report will include the same key report metrics included in the internal report, but the segment should be anonymized so the employees or type of employees in that segment are not identifiable.
• Prepare a report for employee notification. You must provide each employee with information regarding the segment to which they belong and the pay gaps in that segment, provided that the provision of the information does not violate data privacy laws.

The requirement in Israel focuses primarily on gender. The reporting requirements and metrics are designed to assess and address the gender pay gaps within organizations. 

While the law doesn’t explicitly require reporting on race/ethnicity pay gaps, many organizations analyze race and ethnicity gaps as well as part of their pay transparency strategy, where it is permitted by law. 

Syndio’s PayEQ solution allows you to analyze pay equity and opportunity gaps across multiple dimensions, including race, gender, ethnicity, age, disability, and more. This provides a comprehensive understanding of how different groups are affected by your policies and practices.

No. In Israel, only employers with more than 518 employees are required to prepare the pay gap reports.

For the reports, employers must segment (or divide) employees into groups, by type of employee, type of jobs, or type of ratings. Syndio’s expert team can assist Global Pay Reports customers in grouping employees.

Data privacy is a consideration for the pay gap report in Israel. For the public report, employers must ensure the employees or type of employees in each segment are not identifiable. Likewise for the employee notification — employers must ensure the provision of the information does not violate data privacy laws.

Employers must report on salary or other remuneration as defined in Section 2, provided that tax is paid on it in accordance with Section 2(2) Income Tax Ordinance.

Syndio provides software and expert professional services to help multinational organisations comply with pay equity, pay reporting, and pay transparency regulations. Syndio helps you analyze, remediate, explain, and report on gaps so you can stay on top of compliance in Israel.  Learn more: https://synd.io/global-pay-reporting/.

The law in Israel analyzes pay gaps, not pay equity. What’s the difference? 

An unadjusted pay gap (also called an “uncontrolled pay gap”) is the difference between the median or mean pay of two groups, such as men and women.

• Median pay gap: Imagine lining up all the earnings for two groups of employees (e.g., men and women) from lowest to highest. The median pay gap is the difference between the middle earnings in each line. It’s a good indicator of typical pay differences.
• Mean pay gap: This compares the average earnings of each group. However, it can be skewed by extremely high or low earners.

Pay equity, or the adjusted pay gap, accounts for factors that can legitimately explain differences in pay, such as performance ratings, tenure with the company, or location.

The median and mean pay gaps provide valuable insights, but they don’t tell the whole story. There may be legitimate reasons for pay differences between employees. The adjusted pay gap (pay equity) accounts for these factors, revealing whether a pay disparity truly exists (which is unlawful in many countries) so you can take corrective action. Syndio’s PayEQ software is the trusted solution for global enterprises to rapidly identify, address, and prevent pay disparities.