Iceland Becomes the First Country in the World to Enforce Equal Pay

iceland gender pay gap women law equal pay

The gender pay gap hit the New Year headlines with the news that Iceland has become the first country in the world to bring in a revolutionary equal pay law.


The bill, which came into force on New Year’s Day, requires every firm with 25 or more staff, around 120,000 companies in Iceland, to be able to prove it is paying everyone in the same roles equally - no matter what their gender, sexuality or ethnicity. Failure to do so will incur significant fines.

Discrimination based on gender is already illegal in many countries, but current legislation is far from effective – according to research by the World Economic Forum (WEF), women are paid less than men in every country in the world.

And even though Iceland has the best track record on gender equality globally (ranked number one out of 144 countries in the WEF Global Gender Gap 2017 report – the UK sitting at number 15), its gender pay gap still stands at 16 percent. By comparison, in the US the pay gap is at 20 percent and in the UK it is 18 percent.

The new measure intends to close the gender pay gap in Iceland by 2020, making the small Atlantic island a global pioneer in its strides toward salary parity. It’s a bold move for an already progressive country, a drive to equality that began back on 24th October 1975 when the women of Iceland went on strike, refusing to cook, clean or look after their children, as a demand for respect for their work and equal pay.

As such, the new bill is strongly supported by both political parties in Iceland's parliament, where nearly 50 per cent of the lawmakers are women, including the new Prime Minister, Katrin Jakobsdottir.

“This is a systematic problem that we have to tackle with new methods,” said Dagney Osk Aradottir Pind of the Icelandic Women’s Rights Association. “Women have been talking about this for decades, and I really feel that we have managed to raise awareness, and we have managed to get to the point that people realise that the legislation we have had in place is not working, and we need to do something more."

Thorsteinn Viglundsson, Icelandic minister of social affairs and equality underlined the country’s commitment to change, saying, “The gender pay gap is, unfortunately, a fact in the Icelandic labour market and it’s time to take radical measures; we have the knowledge and the processes to eliminate it.”

With WEF figures showing that the average pay for women in 2017 was £8,844 compared with £15,478 for men, there are calls for more countries to follow Iceland's lead now - something echoed by everywoman co-founder Maxine Benson, “At everywoman we were thrilled to hear that Iceland has introduced this revolutionary new law. This is a great move - it celebrates equality, is great for business and is a fundamental step towards fully closing the gender gap.”