Bridging the Gender Pay Gap in Iceland: Pay Equality Certification

In Iceland equal pay for both men and women is now law: the Parliament (Alþingi, where nearly 50 percent of members are women) approved an amendment to the legislation on the equal position and equal rights of females and males in the workplace. The new regulation came into effect on the first day of 2018, following the commitment of the Icelandic government to eradicate the gender pay gap by 2022.
According to the law, it is now mandatory for all companies and institutions with more than 25 employees to obtain a “Pay Equality Certification” (Jafnlaunavottun). The required certification is based on the ISO “Equal pay management system – Requirements and Guidance”, which stipulates that professional certifiers shall decide which organisations and bodies shall be subject to these requirements, and upon reaching their decision, report their verdict to the public Centre for Gender Equality (Jafnréttisstofa). The certifiers are requested to give information about firms and institutions who fail to adhere to bridging the gender pay gap and therefore have to face fines.

This groundbreaking step is the result of a journey that the country is taking in the direction of greater respect for gender equality: for several decades, legislation has attempted to regulate equal pay between men and women, but the gap persisted. Therefore, the Government decided to introduce a new measure that would strip the differences and thus allow sanctioning any discrimination.

Iceland has long committed itself to taking measures which promote gender equality: the country has been at the forefront of the Global Gender Gap Report for the last nine years. The UN report underlines how Iceland is the top performer in terms of the political and economic participation of women; pivotally, however, with respect to the gender pay gap, Iceland ranked in fifth place in 2017.

Discrimination is not easy to evidence from a legal and econometric point of view, unless we pay attention to the values of payrolls mathematically. In order to make the calculation of inequality in salaries, the European Parliament approved the Directive 2006/54 / EC on the principle of equal opportunities and equal treatment of men and women in matters of employment. This Directive, together with national regulations, represents a welcomed step towards achieving gender equality on the continent, but more proactive measures may need to be considered in order to tackle workplace harassment and discrimination. Globally, women earn an average of 23 percent less than men and the phenomenon – known as the gender pay gap – is “the biggest theft in history” according to the UN. The data collected by the UN indicates how there are no distinctions of areas, sectors, ages or qualifications and that the wage difference is given by an accumulation of numerous factors that include underestimation of women’s work, non-remuneration of domestic work, lower female participation in the labour market and lower levels of qualifications achieved.

Despite the increasing inclusion of women in the labour market in recent decades, the number of actively-participating women remains much lower than that of men. According to official statistics, women generally earn less not only because they work less hours, but also because they usually operate in low-income sectors or are less represented in the highest levels of companies. In addition, collected data shows that women around the world receive, on average, lower salaries than their male counterparts even when in the same job. In the specific case of Iceland, even if the certification requirement could help root-out the gender pay gap calculated on hourly wages, it is unlikely to reduce the general trend of differing working hours in paid work.

In conclusion, it can be assumed that the new regulation will add further energy to the spirit of gender equality issues in Icelandic society, both directly and indirectly, but the deeply-rooted issues will remain. Pivotally, even in such a progressive country as Iceland, additional reform will be required in order to fully secure greater equality for women in the workplace.


Sources:

Alþingi (2017), Amendment to the 2008 legislation on equal position and equal rights of women and men, with equal pay certification, http://www.althingi.is/altext/146/s/1054.html  

Alþingi (2000), Act on the Equal Status and Equal Rights of Women and Men, http://www.humanrights.is/en/moya/page/act-on-the-equal-status-and-equal-rights-of-women-and-men  

Jafnlaunastaðall (2012), ÍST 85:2012, http://www.stadlar.is/verslun/p-45590-st-852012.aspx  

World Economic Forum (2017), Global Gender Gap Report 2017, http://www3.weforum.org/docs/WEF_GGGR_2017.pdf  

European Parliament and Council (2006), Directive 2006/54/EC of the of 5 July 2006 on the implementation of the principle of equal opportunities and equal treatment of men and women in matters of employment and occupation, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=celex%3A32006L0054  

United Nations Population Fund (2017), The State of World Population 2017, https://www.unfpa.org/sites/default/files/sowp/downloads/UNFPA_PUB_2017_EN_SWOP.pdf  

Photo credit: Magnus Fröderberg/norden.org [CC BY 2.5 dk], via Wikimedia Commons

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