Employee called up for reserve duty? The salary, the protection and the cash flow to know

On a Tuesday morning one of your employees sends a message: I got an emergency call-up order (צו 8), reporting on Sunday. You are happy for him, and within a second you are doing a completely different calculation: who covers his shift on Friday, and what happens to his salary while he is not behind the counter.

Reserve duty is not sick leave and it is not a holiday. It has its own law, with clear rules on what you may and may not do, and on how you get back the money you paid. Better to know this before the order is on the table, not at that moment.

A regular reserve day arranged months in advance and an emergency call-up that arrives without warning are subject to exactly the same rules. This is true at any time of the year, not just around a particular military operation.

What happens to the salary when an employee goes on reserve duty?

If your employee is a monthly employee, or an hourly or daily employee who worked for you at least 75 days in the three months before going on reserve duty, you keep paying their regular salary on the regular date, as if they were at work, and file an employer claim with National Insurance (ביטוח לאומי) to recover the reserve duty benefits based on the salary you reported. Below that threshold, the employee files the claim directly with National Insurance, not you. This is correct for 2026, according to National Insurance's questions and answers on reserve duty (in Hebrew).

According to the employer information page on the National Insurance website, if the amount National Insurance calculates comes out higher than the salary you actually paid, you must pass the difference on to the employee. Thanks to the fixed compensation and the grants described below, the gap between what you paid and what came back to you does not always zero out exactly. Sometimes you are left with a little more than you spent, not just a bridge over the hole in your cash flow.

How cash flow works in practice

You pay out of the till now, and the refund arrives only after the claim is processed. That can take weeks. This gap is what you really feel in the till.

Say one of your employees earns ₪9,000 gross a month and goes on reserve duty for three weeks: twenty-one days out of thirty. You keep paying the full monthly salary, as if he worked as usual: 9,000 divided by 30 times 21, about ₪6,300 sitting with National Insurance until the claim is processed, and that is before the related employer costs that keep running at the same time. In a small business with a tight monthly cash flow, six thousand three hundred shekels disappearing for a few weeks is an amount you feel. It is also important to know that National Insurance calculates the benefit from the reported salary plus statutory cost-of-living increments, with a daily minimum of ₪328.76 as of 1.1.2026, so the refund is not necessarily identical to the shekel to the salary you paid.

You can, and should, file a claim every month, even if the service has not ended yet, instead of waiting for the end of the whole period and getting everything at once. Filing requires that you reported the relevant month's salary (Form 100) at least two days before filing the claim, and the claim itself is filed through the online system for employers on the National Insurance website, following the guidance published by National Insurance for employers whose employees went on reserve duty. Monthly filing does not shorten the processing time of each individual claim, but it prevents a situation where three months of salaries sit with National Insurance at once with no refund.

It is also worth marking these payments separately in the books: not as a regular salary expense, but as an advance awaiting a refund. That way, at the end of the month, you see clearly how much money is stuck with National Insurance, and you are not tempted to think profitability fell when it is really a temporary cash flow issue.

Beyond the benefit itself, employers also get extra money: as of 2026 the state continues to compensate employers at a fixed rate of 20% of the salary of an employee serving in the reserves, as compensation for the social benefit contributions you keep paying for them throughout the service. On top of that there are one-time grants for employers for their employees' reserve duty in 2025 and 2026, which grow with the number of days the employee served in that calendar year, starting from twenty reserve days and up. The details are based on an article summarizing the changes to the reserve duty law for 2026 (in Hebrew), and it is worth checking the exact amounts with National Insurance before planning around them.

What you must not do

You must not dismiss an employee because of their reserve duty: because of how often it happens, how long it lasts, or the call-up itself. Such a dismissal is void from the start, even if you wrote a different reason on the dismissal form. This rule is set in section 41A of the Discharged Soldiers (Reinstatement in Employment) Law, 1949.

Beyond this general ban there is an additional protection period, and since 2026 it is no longer uniform. An employee who served more than two consecutive reserve days is protected for thirty days from the end of the service: during this period you cannot dismiss them, reduce their position or harm their pay terms without the approval of the employment committee (ועדת התעסוקה). And from 2026 onward, as a permanent arrangement, an employee who served more than sixty reserve days in a calendar year gets a protection period twice as long: two months instead of one. The details of the amendment are in the article summarizing the changes to the reserve duty law for 2026.

There is also a point that is easy to miss: the service period itself does not count as a break in continuity of employment. Seniority, annual leave days, recuperation pay (דמי הבראה) and social benefit contributions keep building up as if the employee had not left at all.

What you do need from the employee

The order itself, an emergency call-up or a regular reserve order, is not the document you need to keep. The document that does serve you is the military confirmation of the actual service period, which the employee is supposed to give their employer at the end of the service. Without this confirmation, with the exact start and end dates of the service, you cannot file a correct refund claim, and you cannot know for sure when the protection period from dismissal starts and ends.

The difference between two days and three days in this confirmation is not a matter of being fussy: it decides whether the thirty-day protection period applies to you. On the practical side, ask the employee to update you as soon as they have final end dates in the military confirmation, so you know exactly which days to report in the claim and when the protection period ends.

It is also worth remembering that the general ban on dismissal because of reserve duty applies regardless of the length of service, even for one day. The additional thirty-day protection period is the one that depends on the threshold of more than two consecutive days.

Covering the shift without wearing out whoever is left

The real operational problem is not the legal one. It is who stands behind the counter on Friday at noon. A few tactics that work in a small business:

• Train at least two people for every regular role in advance, so no shift depends on one person.
• Keep a list of former employees or students who already know the system and can be called in for a few shifts.
• Spread the load. Do not always send the same two or three people to cover the gaps, or exactly those people will burn out until they leave.

It is also worth finding out in advance who on the team is willing to take an extra shift at overtime pay as a one-off, and not discovering it only when someone is already leaving. A business with two or three people who can jump into a shift at short notice, a student, a retiree who used to work for you, or a family member, stays open even on a holiday eve or a busy Saturday night, when one reservist's absence can throw everything off.

If you build the shift schedule and see in the same system who has already worked too many hours this week, for example with the time clock and the reports by branch in KupaLi, on the Smart POS plan, it is easier to share out the remaining gap without always wearing out the same people. It does not solve the staff shortage, but it prevents a situation where you find out after the fact that someone worked six shifts in a row because they were the easiest to call in.

If you also have hourly employees around the holidays, it is worth knowing the difference between this topic and holiday pay entitlement. We have a separate guide on holiday pay for hourly employees, because it is a completely different right and different employees.

If there is one idea to take from here, it is to record the payment to the employee on reserve duty in the books as an advance awaiting a refund from National Insurance, not as a regular salary expense. That way the temporary cash flow does not look like a drop in profitability that did not really happen.

What is written here is a general explanation and not legal or accounting advice.