According to a law passed by the parliament in June, all companies, both private and public, need to prove that their wage practices don’t discriminate against women. The only difference in wages that may exist, should be on the basis of education, output, and skills.
In case any firm fails to prove itself, it can result in imposition of daily fines. The law seeks to eliminate the current pay gap of around 5.7 per cent between men and women. In fact, the country aims to eradicate gender pay inequality by the year 2022 . In many other countries, it is illegal to pay men and women differently. But Iceland, became the first nation to make it mandatory for both private and public firms to have equal pay.
Companies with more than 25 employees will be required to get an ‘equal pay certification’ which must be renewed every three years. Large scale companies with more than 250 employees need to get the certificate by the year end, whereas small scale firms have time till the end of year 2021. According to World Economic Forum, Iceland already ranks first in terms of global gender equality index. In 2017, it bagged the first place for the ninth consecutive year.