Enormous interest for Icelandic equal pay standard

The new equal pay standard law came into force on 1 January 2018. It has created so much interest that the Icelandic Ministry of Welfare has set up a website in English to answer questions about the law, provide information about the equal pay standard and how it is being introduced. The Centre for Gender Equality in Iceland also plans to set up a website soon. Icelandic Standards (IST), the national standards body of Iceland, allows companies to purchase the certification in English.

The Director of the Centre for Gender Equality, Katrín Björg Ríkarðsdóttir, says authorities and media from abroad have been in touch with Icelandic authorities to ask about the law and the Icelandic state’s plans for the equal pay standard which should be fully in place by 2021.

Questions include how the standard actually works, which companies must adhere to it, whether the standard means that everyone will know what people are paid etc.

Biggest companies first to join

The timescale looks like this: 

• By the end of 2018, all companies employing more than 250 people must have introduced the equal pay standard.
• During 2019, companies employing 150 to 249 people must introduce the standard.
• By 2020, all companies employing 90 to 149 people must introduce the standard.
• Companies employing 25 to 89 people must introduce the standard by the end of 2021 at the latest.

 Companies will be assessed every three years.

The equal pay standard has been the great aim of member of parliament Þorsteinn Víglundsson, both during his time as leader for the Confederation of Icelandic Enterprise (SA) and as Iceland’s Minister of Social Affairs in 2017.

Þorsteinn points out that an equal pay standard experiment finished in 2016. It was originally meant to be voluntary, but it was later decided to introduce a legally binding system.

“Experience shows us the best results are reached when such a standard is enshrined in law,” says Þorsteinn Víglundsson.

Most of Iceland’s labour market is made up by companies employing between 25 and 100 people. Þorsteinn does not think it would be possible to achieve the same results if smaller companies were not legally bound by the equal pay standard.

“I understand the labour market’s criticism that the equal pay standard can feel inconvenient. But it is also expensive for the state when women are paid less than men,” he says.

One result is that women who are always paid less than men because of the gender pay gap, end up with lower pensions,

“Society as a whole is completely opposed to gender pay gaps. That is why we have to use any tools available to us to eradicate wage differences between the sexes, and that is why the equal pay standard has been made obligatory,” says Þorsteinn Víglundsson.