113 Amendment No. 16 to the Prevention of Sexual Harassment Law expanded its application to service recipients who receive services through contractors, extending protections to contractor employees. Judicial decisions further underscored the importance of proactive prevention and proper complaint handling. In the Shoham Local Council case, the court reaffirmed that employer obligations may extend beyond the express wording of the statute where workplace dynamics influence relationships. In the Amal U’Maavar case, the court-imposed liability for emotional distress arising from the manner in which a complaint was handled, even though the underlying conduct did not constitute sexual harassment under the law. The ruling emphasized the expectation that employers define behavioral norms in advance, particularly during company events, and manage complaints transparently and consistently. Wage Components, Commissions and Overtime In the Castro case, the Labor Court addressed the inclusion of commissions in calculating overtime. The court held that commissions may form part of the base wage for purposes of the Hours of Work and Rest Law, depending on their nature and role within the compensation structure. The judgment rejected a blanket approach, emphasizing that each case must be examined on its merits. Employers using commission-based remuneration are therefore advised to reassess their wage structures. Engagement with Contractors and Service Providers Developments in 2025 expanded obligations for organizations engaging contractors, particularly in regulated sectors such as security, cleaning and catering. New regulations governing salary components and monitoring mechanisms came into effect on 1 January 2025, requiring updates to existing agreements. In addition, the National Labor Court ruled in the Koach LaOvdim case that service recipients may, in certain circumstances, be deemed employers for specific purposes, including collective dialogue obligations. This has implications for tender processes and engagement with unionized contractor workforces. Looking Ahead to 2026 The developments of 2025 point to continued tightening of labor regulation in Israel. Employers should prioritize robust procedures, documentation and compliance mechanisms, particularly in relation to equality, privacy, harassment prevention, and contractor engagement. As judicial scrutiny increasingly focuses on how decisions are made, rather than intent alone, early planning and procedural discipline will be essential tools for managing legal and operational risk in 2026. “...once a prima facie wage gap is shown, employers must justify it with evidence rather than general assertions.” ISRAEL — EMPLOYMENT
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