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Will Iceland’s New Law Close the Gender Pay Gap?

On January 1, 2018, Iceland put into effect the world’s first law making it illegal to pay men more than women. The Icelandic government hopes that the new legislation will allow them to completely eradicate the gender pay gap by the year 2022.
iceland
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Iceland’s pay gap currently stands at 19 percent; however, the nation has been ranked by the World Economic Forum (WEF) as the world most gender-equal country for the past nine years.

But, the fact that they’re the global leader when it comes to pay equity doesn’t mean that they’re satisfied.

“Women have been talking about this for decades and I really feel that we have managed to raise awareness, and we have managed to get to the point that people realise that the legislation we have had in place is not working, and we need to do something more,” Dagny Osk Aradottir Pind, a board member of the Icelandic Women’s Rights Association, tells Al Jazeera.

This law was supported by a parliament that is nearly 50 percent women.

Employers Must Prove Pay Equity

The new law makes it illegal to pay women less than men in Iceland, placing the onus on employers to pay equally. Companies and government agencies that employ 25 people or more now have to prove their equal pay policies are fair and obtain government certification, as well as publish their pay data. Those who fail to prove that they’re paying women and men equally will face fines.

“We have had legislation saying that pay should be equal for men and women for decades now but we still have a pay gap,” Aradottir Pind explains.

Previous laws aimed to close the gap had moved things a little, but the decrease of two percentage points since 2008 wasn’t enough progress for lawmakers.

Now, potential applicants will be able to check on a company’s certification before being hired. Not only will failing companies be fined, but they’ll be exposed publicly for that failure. In this day and age, word is likely to travel quickly on social media, especially in a country that has demonstrated that they value gender pay equity.

The Persistent Gender Pay Gap

In the U.S., women earn 76 cents for every dollar earned by men, according to PayScale data. Men are 85 percent more likely to be VPs or c-level executives by mid-career, and tend to dominate high-paying professions.

In the U.S., men are 85 percent more likely to be VPs or c-level executives by mid-career.Click To Tweet

However, awareness of pay inequity is growing. For example, last week, news of the $1.5 million pay gap between Michelle Williams and Mark Wahlberg for the reshoots on All the Money in the World dominated the media. In the response to the incident, Wahlberg pledged to donate the money to the Time’s Up Legal Defense Fund.

No matter what comes next for Iceland, the country has sent a bold message with this legislation. They value gender pay equality enough to pass laws that requires it. Perhaps other countries will follow suit.

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Wouldn’t be surprised if this was a global trend, especially with the #MeToo movement. In the US, more women than men graduate from college. But without representation at the highest levels of companies, unfortunately, it may take legislation to make pay equality a reality here.

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