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Iceland Announces Plan to Enforce Equal Pay Across All Companies

Mar 10 2017 8:38 PM
Iceland Announces Plan to Enforce Equal Pay Across All Companies

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"The fact that the Icelandic government is taking this action represents an endorsement of the importance of gender equity. The government is leading by example, showing that it recognizes that what's good for women is good for men, business, communities and good for the world."

Iceland is hoping to become the first country in the world to require employers offer equal pay, regardless of gender, ethnicity, nationality, or sexuality. The government announced Wednesday—International Women's Day—that it will introduce to parliament this month the Equal Pay Standard, a set of rules and regulations that will help companies determine if there is a discrepancy between how much male and female employees are paid.

If this legislation is passed, companies with 25 employees or more will have to show proof that they offer equal pay for work of equal value. The move aims to eliminate the gender wage gap within five years.

The Equal Pay Standard was first introduced in 2012 by then Icelandic Prime Minister Jóhanna Sigurðardóttir as a voluntary measure. "The equal pay standard was developed in cooperation between the labor unions, the employers' confederation and the government," explains Brynhildur Heiðar- og Ómarsdóttir, the executive manager of the Icelandic Women's Rights Association, "and it was written because the labor unions demanded that employers and the governments sit down with them to develop a tool to measure and guarantee that men and women are paid equal wages."

Heiðar- og Ómarsdóttir says they're very excited about the measure and hopeful that it will pass the parliament. "This legislation would be a logical next step in our efforts in Iceland to combat gender inequality and the gender pay gap," she tells Broadly. "In current Icelandic law, companies with 25 or more employees are already required to have an equality plan and boards of companies with 50 or more employees are required to have gender parity of at least 60/40."

Read more: The Wage Gap Is Real, and It's Costing Women $500,000

"Of course," she continues, "it is not enough to simply legislate equality." The country will also need to make sure it provides enough funding to the entities, such as the Gender Equality Centre, whose job it is to enforce these standards, she says.

Since 2009, Iceland has topped the World Economic Forum's gender gap index, making it the most female-friendly country out of the 144 countries included in the report. Yet, despite the fact that the first Icelandic law mandating equal pay for men and women passed in 1961, according to Heiðar- og Ómarsdóttir, the gender wage gap has persisted. On average, women in Iceland earn about 14 to 18 percent less than men.

That's why last year, and in previous years, women all over the country went on strike—thousands walked out of their jobs early to show the difference in how many more hours they'd have to put in to earn the same amount of money as men.

The Icelandic government's attention to this issue by considering the Equal Pay Standard "shows the importance of the labor movement as a force for justice and equality," Heiðar- og Ómarsdóttir says.

Serena Fong is the vice president of government affairs at Catalyst, a nonprofit advocating for women in the workplace. She tells Broadly that while it's unclear if Iceland's Equal Pay Standard will help bring about equal economic power on other fronts, "we do know through our research that the economic empowerment of women can improve a country's growth and stability, combat shrinking labor forces in countries with aging workforces, and contribute to wider economic development in developing countries, especially if employment leads to women's lower fertility rates, longer tenures in the workforce, and increased investment in the education of children."

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"This legislation can serve as a good example of how other countries can close the gender wage gap," Fong continues. "The fact that the Icelandic government is taking this action represents an endorsement of the importance of gender equity. The government is leading by example, showing that it recognizes that what's good for women is good for men, business, communities and good for the world. Hopefully other countries will use the actions by the Icelandic government as a role model and take similar action to close the gender gaps in their own country."

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