Iceland Mandates Equal Pay Law To Break Down Last of The Gender Barriers in The Workplace

Iceland has taken a monumental step in its attempt to close the gender pay gap. A new law makes equal pay for equal work a must in the country – regardless of gender, ethnicity, sexuality or nationality.

The new law which went into effect on January 1, 2018, covers about 150,000 salaried workers in the country. All companies and government agencies with more than 25 employees must now obtain an official certification to show that they give equal pay for work.

There are courses which will help the 1,200 companies in Iceland with more than 25 employees implement the new pay scales. Upon completion of the course, the companies will get a certificate that has to be renewed every three years. Companies that fail to reward equal pay for equal work will be fined.

Iceland Mandates Equal Pay Law

Iceland’s equal pay law intends to close the gender pay gap by 2022. Until now, women in Iceland have earned an average 19 percent less than their male colleagues. In October 2017, thousands of Icelandic women left work at 2:38 p.m. to protest the pay disparity. The walkout time was symbolic of when women stop receiving pay during their 9 to 5 workday compared to men.

Article 19 Equal Pay

Women and men employed by the same employer shall be paid equal pay and shall enjoy the same benefit for the same or equal job.

With equal pay, wages should be determined in the same way for women and men. The criteria based on salary decisions shall not include gender discrimination.

Employees should always be able to declare their wage terms if they so choose.

[The Minister may issue a regulation 1) on the further implementation of this provision, including the implementation of the standard on wage equality, such as the qualification requirements of the certification body and the implementation of peer review.]

Iceland wins accolades for Equal Pay Law

On Tuesday, U.S. Sen. Bernie Sanders praised Iceland for its pay equity legislation. “We must follow the example of our brothers and sisters in Iceland and demand equal pay for equal work now, regardless of gender, ethnicity, sexuality or nationality,” he wrote on Facebook.

In the United States, women earn 79 cents for every dollar men earn. The gap is the smallest it’s been since the 1960s, but it has been closing slowly since the 1980s. If the United States reaches full gender parity, the World Economic Forum (WEF) estimated, it could add $1.7 trillion to the economy.

According to the WEF, the top five countries for gender equality are Iceland, Norway, Finland, Sweden, and Rwanda.

Priyansha Mistry
Currently editor at The HR Digest Magazine. She helps HR professionals identify issues with their talent management and employment law. | Priyansha tweets at @PriyanshaMistry

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