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Source: US Global Legal Monitor

(Dec. 18, 2020) On November 23, 2020, the Knesset (Israel’s parliament) adopted temporary legislation to freeze the salaries of Knesset members (KMs) for 2021. (Law for Cancelling Knesset Members’ Salaries for the Year 2021 (Temporary Order) 5781-2020, Sefer HaHukim [SH] (official gazette) 5781 No. 2869 p. 94.)

According to the Knesset Members’ Salary Decision, 5747-1987, KMs’ salaries are linked to the average wage in the Israeli economy as defined under section 1 of the National Insurance Law (Consolidated Version) 5755-1995 (this and other legal references below as amended), and are updated automatically every year.

Under the temporary order, the salaries of all Knesset members “who are not ministers or deputy ministers, including the speaker of the Knesset, the opposition leader, deputy speakers, and speakers of Knesset committees” will not be updated during 2021. For the purpose of calculating the KM’s updated salaries as of January 1, 2022, “the average wage published in 2020 will be taken into account, instead of the average wage published in 2021.” (Temporary Order §§ 2–3.)

According to the explanatory notes of the Temporary Order Knesset Draft Bill, a sharp increase in the average wage is expected in January 2021. Because of the coronavirus pandemic “many places of employment have been closed, and many workers, mostly low-wage earners, have been fired or placed on unpaid leave.” The bill’s drafters explained that this exceptional increase was not expected to occur again in 2021. The freeze on KMs’ salaries was also intended to affect the reference point for the wage update in January 2022, which will be the one published in 2020 rather than 2021.