Iceland is no longer just awesome for its volcanic hot springs and warm wooly sweaters. Businesses in the Nordic island country are now required by law to not only pay women and men equally, but to prove that they are doing so. This apparently makes Iceland the world’s first country to make equal pay a legal requirement. The law was passed by parliament in June and has just taken effect with the start of the new year.
The Associated Press reports that the legislation applies to employers with 25 or more employees, and requires businesses to obtain “equal pay certification” from accredited auditors demonstrating that any pay differences are based on legitimate factors such as education, skills and performance. There are other places with certification policies but Iceland is the first to make it mandatory for both private and public firms, says the AP.
The deadline to obtain the certification is the end of 2021, after which they will be required to renew every three years.
Businesses that do not meet the requirements may be fined or, according to the Washington Post, “exposed in the media or on social media.”
Iceland currently has an “unexplained” pay gap of about 5.7%. This means the gap can’t be explained by the aforementioned factors and others — disparities in work hours, experience, etc. The plan is to erase it by 2022.
If you’re like me, you’re thinking “Amazing. The rest of the world should do the same thing right now!” But it seems that not everyone is thrilled. Employers’ associations reportedly complained that it would impose “costly compliance burdens and involved too much government interference in the labour market,” while academics argued that not all non gender-related factors were accounted for.
Iceland also still has an “explainable” pay gap, of 22% according to a report for the European Social Policy Network . For comparison purposes, the U.S.A. has a total pay gap of about 24% and an “unexplained” gap of 5.4%, while Canada has a total gap of around 20% (depending on where you read about it) and an “unexplained” gap of around 7%.
Meanwhile, this Bloomberg writer argues that Iceland’s plan is far from perfect:
“Reasons why employers try to pay women less for equal work range from patriarchal prejudice to women’s tendency to negotiate less aggressively than men do. But the most persistent of these reasons has to do with the perception that once a women has children, her priorities shift away from work. The only way to completely eliminate that perception is to get men to accept an equal share of child-rearing responsibilities. It’s doubtful that any government or civic-minded employer can do that, but they can at least try, mostly by adjusting parental leave policies.”
Even if it is a good plan, Iceland is a tiny country with a population of about 330,000 people – or, you know, only slightly larger than the city of Toronto. And, it’s probably easier to enforce this type of legislation in a place that size than it is in countries the size of Canada or the U.S.A.
Still, most (women, at least) would probably call this a step in the right direction.
Iceland, which has a female Prime Minister, ranks first on the World Economic Forum’s global gender equality index. Canada ranks far, far behind on this list, in 35th place.
And it appears that here in North America, people are getting increasingly fed up. E! News anchor Catt Sadler recently quit her job after learning that her male co-host Jason Kennedy was making significantly more money that she was. Sadler wrote on her website that she felt compelled to leave her “dream job” in order to “stand for what is right.”
According to Us Magazine, Sadler was making about $600,000 while Kennedy was making between $1 million and $1.2 million. Other parties close to the situation, however, argue that Kennedy’s larger salary was due to his senior rank as First Anchor, while Sadler was Second Anchor, and that it had nothing to do with gender.