Iceland Requires Companies to Prove Gender-equal Pay

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January 8, 2018

Now in effect in Iceland is a law mandating that companies and government agencies that employ 25 or more people must prove that they grant equal pay for equal roles. The most prominent result is that women will now be paid the same as men for doing the same job.

The Althing, the Icelandic government, passed the law in 2017, and the law took effect on Jan. 1, 2018. The country has had an equal-pay law since 1961, but that law required an employee to prove discrimination. The new law makes it mandatory and puts the onus on companies to prove that they are compliant. The government led by Prime Minister Katrín Jakobsdóttir has granted a four-year grace period.

Small businesses and agencies must obtain a certificate from the government that says that the company's pay policies have been reviewed and match the terms of the law, which also aims to prevent discrimination based on ethnicity or orientation.

The World Economic Forum has for nine years ranked Iceland top of the list for gender equality. The next four countries on the list from the Global Gender Gap Report are Norway, Finland, Rwanda, and Sweden. The list contains the names of 144 countries.

Despite that ranking, women still typically earn about 16 percent less than men overall and 8 percent less for doing equivalent jobs, concluded Statistics Iceland in a recent report. The government has set a target of eliminating the gender pay gap entirely by 2022.

The country has a history of activism in the area of gender-equal pay and for women's participation in politics:

  • On an October day in 1975, 90 percent of the women in the country refused to show up for work, including those who worked at home.
  • In 1980, Vigdís Finnbogadóttir became the world's first democratically elected female president. She served for 16 years.
  • And Iceland currently tops the group of OECD countries with 47.6 percent of the seats in the government held by women.

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