Iceland Becomes First Nation to Require Employers To Prove Equal Pay

By 2020, Icelandic companies will have to prove that they pay women (and visible minorities) as well as men for work of equal value.

You may remember the fanfare when President Barack Obama signed the Lilly Ledbetter Fair Pay Act as one of his first acts in office. And no doubt you recall all the think-pieces about Canadian Prime Minister Justin Trudeau’s 50/50 gender split cabinet when he took office in 2015. But Prime Minister Bjarni Benediktsson of Iceland has bested them both.

Iceland has just become the first country to require that employers prove that they pay their female employees the same rate as their male employees. The rule will apply to all companies with 25 or more employees, and companies subject to it will undergo inspections every three years to ensure that they continue to adhere to it, or face a daily fine.

Dozens of countries have equal pay legislation on the books — Australia, Taiwan, and most EU member states, for example — but the enforcement mechanisms have not been effective. In Australia, legislation prohibiting wage discrimination based on sex was passed in 1984, but 30 years later, the average difference in salary between the genders was 18.8%, the highest that had ever been recorded in the country. And in Hollywood, the reality was brought home again earlier this month, when actress Michelle Williams and actor Mark Wahlberg were paid $1,000 and $1.5 million, respectively, for the same 11-day reshoot of All the Money in the World.

The law will go into effect in 2020, but its origins date back to 2014, when it was introduced as a voluntary standard, developed in partnership with the private sector. “The new standard can become a powerful tool to achieve equal pay for equal work,” Thorsteinn Víglundsson, Director General for the Confederation of Icelandic Employers, said at the time. “And I hope and expect that a large proportion of our 2,000 member businesses will want to get the certification.”

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