Iceland makes companies prove they’re not paying women less

New law forces companies to analyse salary structures every three years

Iceland ranks fifth in the world for wage equality, according to a World Economic Forum report. Photograph: Getty

Iceland ranks fifth in the world for wage equality, according to a World Economic Forum report. Photograph: Getty


Iceland this week began putting in place a new law that requires companies and government agencies to prove they are paying men and women equally.

The Equal Pay Standard took effect Monday. It says that companies with 25 full-time employees or more must analyse their salary structures every three years to ensure that men and women are being paid the same amount for doing the same jobs. Then they must report back to the government for certification or face penalties that include fines.

While Iceland has had equal pay laws in place since 1961, the new standard is seen as the first time the nation of about 340,000 has put in place specific steps to force companies to eliminate pay gaps.

“Of course it has always been illegal to unequally pay men and women,” Frida Ros Valdimarsdottir, the chairwoman of the Icelandic Women’s Rights Association, said in an interview Wednesday. “But this is a legally binding tool kit.”

In 2017, for the ninth year in a row, Iceland had the best overall score on the World Economic Forum’s Global Gender Gap Report, which measures the size of the differences between men and women in health, economics, politics and education in 144 countries.

Average pay

For wage equality, Iceland ranked fifth in the report, which said that globally, the average pay for women in 2017 was €10,000, compared with €17,500 for men. In Iceland, women earned 14 to 20 per cent less than men, according to government figures for 2015.

Men are offered parental leave equal to women. Icelandic law since 2013 requires private companies with more than 50 employees to have at least 40 percent women, or men, on their executive board.

But gender pay gap issues have stubbornly persisted, breaking into full view with public protests in October 2016, when women left their jobs at 2.38 pm, before the official end of the workday, but at the time that many calculated they stopped being paid for equal work.

“We have come a long way and we are in the forefront of gender equality in the world,” said Ms Valdimarsdottir. “But we are so far from having equality in Iceland.” While Icelanders have generally celebrated the new law, one survey shows a difference between income brackets and professions. Forty-two percent of executives and senior officials oppose the law, while overall just 21 percent of Icelanders are against it, according to a survey conducted by Market and Media Research, an Icelandic company.

Thorgerdur Einarsdottir, a professor of gender studies at the University of Iceland, said the equal pay law was useful but was “no magic wand.” “A law implementing a standardized job evaluation is not a solid fix to a problem this ambiguous,” she said. “The deeply rooted stereotypes that favor men and women for certain jobs and professions are the fundamental problem.”