Iceland’s parliament on Tuesday presented a bill that would require public and private businesses to prove they offer equal pay to employees, in what would be the first such requirement in the world.
“The bill entails that companies and institutions of a certain size, 25 or more employees, undertake a certification of their equal-pay programmes,” Thorsteinn Viglundsson, Minister of Social Affairs and Equality, told AFP.
The legislation would also apply to discrimination based on race, national origin, religion, disability, age, sexual orientation and gender identity.
Viglundsson said the new law aims to close a seven per cent wage gap between men and women in the island nation of more than 323,000 people.
The Australian Workplace Gender Equality Agency reports that the pay gap in Australia is more than double that – at 16 per cent.
The agency reports that the wage gap is influenced by gender dominance in certain industries, a lack of women in senior positions, women playing a role as family care-givers and both direct and indirect discrimination.
Iceland ranks first on the World Economic Forum’s 2015 Global Gender Gap Index, followed by fellow Nordic nations Norway, Finland and Sweden.
Australia comes in at 36th place.
The Icelandic legislation has the support of both the country’s centre-right coalition government as well as the opposition – and nearly 50 percent of the lawmakers in Parliament are women.
The law would take effect from January.
“The gender pay gap is unfortunately a fact in the Icelandic labour market and it’s time take radical measures; we have the knowledge and the processes to eliminate it,” Viglundsson said.
The law would require private companies and government agencies to go through audits and receive certification that equal pay is provided, or they could face fines.
“In regard to annual financial statements there are fines if documents are not delivered, and I can see the same apply if an equal-pay certification has not been implemented, since it will be an obligation,” Viglundsson said.
He said that the law was “burdensome”, setting new obligations on the Scandinavian country’s economy and businesses, but that “the benefits are at the same time obvious.”
Managers and companies that have undertaken the procedure have been “positive”, as they have found it “beneficial to go systematically through pay decisions in their sections,” he said.
Iceland’s economy is basking in the glow of soaring tourism and a thriving fisheries sector, with growth reaching 11 percent in the first quarter of this year, after full-year growth of 7.2 per cent in 2016.