The amendment to the Male and Female Workers (Equal Pay) Law came into effect on June 1, 2022. The amendment obligates employers employing more than 518 employees and employers that are public companies (as defined in the amendment) to prepare and publish reports on the gender wage disparities in their organizations.

Ahead of the coming reporting date on June 1 2023, the Equal Employment Opportunities Commission has published updated recommendations to promote compliance with the legislative amendment. These recommendations provide clarification of particular topics and new information about the reporting obligations.

The Recommendations

As recommendations, they are not legally binding. However, employers’ actual implementation of the recommendations may be used during judicial interpretation of the provisions of the Male and Female Workers (Equal Pay) Law, if gender wage disparities in the organization result in lawsuits or legal proceedings.

The main innovation is the Commission’s recommendation that employers prepare a practical plan for implementing a gradual customized process for reducing gender wage disparities in the organization, if such disparities are discovered during the preparation of the reports.

According to the Commission, upon the discovery of gender wage disparities, the employer should take action by mapping and analyzing the findings discovered and their causes.

The Commission recommends to employers in which gender wage disparities are discovered to appoint an implementation team comprised of senior management representatives and employees, for the purpose of preparing a budgeted multi-year work plan, including measurable targets for promoting equal pay and reducing gender wage disparities.

Another innovation in the Commission’s recommendations is that employers’ reports present the gender segmentation in the organization, including the ratios of male and female employees whose gross wages are in the top 20% of the organization.

Employers should keep in mind that, notwithstanding the Commission’s recommendations, the law’s wording grants them broad discretion in deciding how to segment employee groups in their organization. Nevertheless, employers should consider the Commission’s recommendations to ensure compliance with the law and to avoid exposure to legal proceedings alleging gender discrimination.

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