Gender equal pay

Iceland introduces new law requiring employers to prove their men and women are getting same wages for doing the same work, or face fines.

Reykjavik: In a world first, Iceland has introduced a new law requiring employers to prove they are paying men and women the same wage for doing the same work, or face fines.

As of next January, companies in Iceland must prove, with proper documentation carried out regularly, that they are paying gender equal wages.

The country’s biggest bank Landsbankinn, nationalised in 2008 during the country’s financial collapse, has already begun complying with the law.

Elisabet Bjornsdottir, 34, who works in the bank’s treasury department, says she’s never experienced any discrimination vis-a-vis her male counterparts, in a country that is already among the world’s best performers in terms of gender equality.

But “that’s one of the fundamental reasons why we need this law, because it’s not something that you can easily feel or see. You can maybe have a feeling ... but it’s really hard to prove,” she said.

While Iceland has had a law mandating equal pay for men and women since 1961, the new law puts the onus on the employer.

It’s no longer up to an employee to prove that they are being discriminated against, but rather, the employer must prove – in the event of a wage gap – that gender has nothing to do with it.

Concretely, employers will have to evaluate, at regular intervals, the requirements for a job position and each employee’s ability to fulfil them. The process must be documented, taking into account objective criteria, and carried out transparently.

The employee’s seniority, education or training, experience, and the added value he or she brings to the job are among the factors assessed.

If the company is in line with the law, a professional certifier (such as private consultancies) will issue the company a certificate valid for three years.

Landsbankinn will spend 

120,000 (RM579,448) to bring itself into compliance. The bank’s human resources chief is in favour of the new legislation.

“If it were not written in the law, I think that in 10 years’ time we would still be doing the same things we are doing today, and the gap would not be closed. So I think it’s a good step towards closing the gap,” said Baldur Jonsson.

For the past nine years, Iceland has led the World Economic Forum’s ranking of the most egalitarian countries.

And yet, even here, the overall wage gap between men and women remains significant, at 16.1%, according to national statistics. That puts Iceland in line with the European average, according to Eurostat’s figures.

Around 1,180 companies and 147,000 employees are affected by the reform in Iceland, a country of 347,000 people. — AFP