The Scotsman

Iceland seek to close gender pay gap with new certificat­ion law

- By MARGARET NEIGHBOUR

A new law in Iceland requires companies to prove that their pay practices do not discrimina­te against women.

The law was passed with a large majority by the parliament in Reykjavik in June and took effect at the New Year.

It seeks to erase a persistent gap between men and women’s pay despite years of equality legislatio­n dating back to 1961.

Companies with more than 25 workers will have to obtain a certificat­ion from an accredited auditor that they are basing pay difference­s on legitimate factors such as education, skills and performanc­e.

Big companies with more than 250 employees have until the end of the year to get the certificat­ion, while the smallest have until the end of 2021. The certificat­ion must be renewed every three years.

While other countries, and the US state of Minnesota, have equal-salary certificat­e policies, Iceland is believed to be the first to make it mandatory for both private and public firms.

The North Atlantic island nation, which has a population of about 330,000, wants to eradicate the gender pay gap by 2022. The country has a female prime minister, Katrin Jakobsdott­ir, and ranks first on the World Economic Forum’s global gender equality index.

Employers’ associatio­ns came out against the law, saying that it imposed costly compliance burdens and involved too much government interferen­ce in the labour market.

Some academic economists also were sceptical of the certificat­ion requiremen­t, arguing that the gap resulted from non-gender-related factors that would be apparent if the statistica­l measures were perfect.

While the law might help eliminate the unexplaine­d pay gap, it probably won’t address the larger, explainabl­e pay difference of 22 per cent between the sexes that is based on different work volumes, according to a report by Stefan Olafsson of the University of Iceland for the European Social Policy Network.

The network provides independen­t policy analysis to the European Commission.

“That is still a gendered pay difference rooted in the fact that women take greater responsibi­lity for care tasks within the household, while men spend more time in paid work,” Mr Olafsson wrote.

“Still, one may assume that the certificat­ion requiremen­t will forward the ethos of gender and other equality issues in Icelandic society, both directly and indirectly,” he added.

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