A new policy paper published by the Arlozorov Forum recommends promoting collective agreements through negotiations between employers and workers regarding the integration of technology into work processes and the sharing of best practices. The paper reviews regulatory policies in various countries concerning the incorporation of AI into the labor market and urges Israel to learn from international examples and advance legislative reforms that protect workers’ rights—specifically in the areas of privacy, anti-discrimination, and mandatory collective bargaining over significant technological changes.
As with previous technological shifts, there is concern that AI-based tools that replace workers or alter how tasks are performed may deepen economic disparities between groups of workers, strengthen employer power, and weaken labor unions. There is also concern that using technology in processes such as hiring may preserve or even exacerbate existing discrimination against women and minorities. Another critical issue is the potential erosion of workers’ privacy. On the other hand, avoiding the adoption of AI technologies could hinder Israel’s global competitiveness and growth potential.
Gali Racabi, a faculty member at Cornell University's School of Industrial and Labor Relations and a researcher at the Arlozorov Forum, reviewed regulatory arrangements in different countries. In Germany, for example, employers are required to disclose their use of AI tools to unions and to involve them in recruitment processes that use artificial intelligence. Scandinavian countries have strengthened tripartite institutions—bringing together the state, employers, and labor organizations—and reached collective agreements that govern employment relations even in platform-based environments, including provisions for privacy rights and protections against algorithmic management.
In South Korea, the government is investing in helping small businesses transition to AI-based production technologies and in science education, while involving labor organizations in shaping regulation. A notable example is the Rider Union, a union of food delivery workers demanding transparency around algorithmic surveillance by platforms.
In the United States, the federal government leads cross-sector collaborations to invest in infrastructure and education, while passing laws that hold employers—and even software developers—accountable for discriminatory outcomes. The Equal Employment Opportunity Commission has also issued a warning about algorithmic decision-making related to workers with disabilities, which may violate existing laws.
China is also seeking to balance technological advancement with political stability, requiring transparency toward workers regarding AI use and prohibiting discrimination. In South Africa and Kenya, there are increasing reports of “ghost workers”—migrant laborers employed to clean datasets for training AI systems. Due to limited regulatory power, these countries allow technology to penetrate easily, even though there are concerns about misuse of the data collected.
Compared to these countries, Israel is lagging behind. According to Racabi, Israel has yet to formulate a coherent policy for integrating AI technologies into the labor market and has not regulated the operations of platform-based companies. Discussions on the issue take place almost exclusively in labor courts. Racabi noted, however, that Israel possesses institutional strengths that could enable an effective response—including flexible labor relations, relatively broad union coverage, a history of cross-sector cooperation, and a specialized legal system with experience in technological matters.
In the paper, Racabi proposes four levels of action for Israel: first, to deeply study regulatory arrangements in other countries, focusing on socially and geographically marginalized areas; second, to promote regulation through collective agreements; third, to advance legislative reforms that strengthen worker protections; and finally, to invest in infrastructure, training, and technology initiatives aimed at reducing inequality.
“The technological revolution of artificial intelligence is already here—but the state of Israel remains behind in addressing its impact across many aspects of the labor market, not just in terms of the creation or elimination of jobs and professions, Amit Ben-Tzur, head of the Arlozorov Forum, said. “Our research reveals troubling gaps in Israel’s regulatory preparedness compared to leading countries and offers a clear path toward smart and just regulation. If integrated correctly, AI systems in the workplace can shift from being a source of fear to a tool for empowering workers, reducing inequality, and accelerating growth. Decision-makers must understand: inaction is also a decision—and one that may widen inequality and harm Israeli workers.”
