News - 13.06.2025

VR Board Demands Prime Minister Roll Back Pay Increases for Senior Officials

The VR Board strongly protests the salary increases for the highest-ranking government officials and calls on the Prime Minister to reconsider their position on the matter. The Board considers it unacceptable that, while general wage earners are being urged to exercise restraint in response to inflation they are not responsible for, senior officials should be governed by different rules.

According to current collective agreements, wages for VR members will increase by 3.5% in 2025, or by a minimum of ISK 23,750. However, the wages of Members of Parliament, ministers, judges, and other officials will increase by 5.6%, and the base salary for MPs will increase by ISK 85,000 per month. Thus, the increase in parliamentary salaries will be more than three times the minimum wage increase for VR members.

In the lead-up to the last round of collective bargaining, the Governor of the Central Bank emphasized that wage increases should be modest. At the same time, inflation was high due to mismanagement of housing affairs and corporate profiteering, with interest rates at extremely high levels. Wage earners were told they had to bear the burden by accepting low wage increases during uncertain times. When negotiations with teachers and doctors were underway and interest rates were still at their peak, the Central Bank Governor reiterated that the same wage policy must be followed. But now, as the wages of senior officials — including the Governor himself — increase by up to three times the nominal amount granted to general wage earners, there is not a word to be heard!

As Prime Minister, Bjarni Benediktsson took the lead a year ago and proposed capping wage increases for officials in line with collective agreements in the general labor market. The current Prime Minister has, however, announced that this will not happen, but that the arrangement for wage increases will be reviewed. The VR Board believes it is essential to do both: to legally ensure that the wage increases for officials are aligned with collective agreements in the general labor market, and to enshrine such an arrangement in law for the future.

Officials should share in the peoples‘ conditions — if they are at all interested in earning their trust.

VR Board, 13 June 2025