How Iceland made the gender pay gap illegal

01 November 2018 -

Gender equalityIceland’s new legislation enforces equal pay at work

Jermaine Haughton

As organisations come under pressure to reduce the gender pay gap, attention has focused on global efforts to boost workplace equality. The approach of the Icelandic government is championed by many campaigners.


On International Women’s Day last year, Iceland passed a law requiring companies to prove they pay employees of both genders the same. The initiative came after six decades of lobbying, which was spearheaded by Fríða Rós Valdimarsdóttir, chair of the Icelandic Women’s Rights Association.

Since the start of 2018, every company with 25 or more staff must gain certification from an accredited regulator proving they pay their women and men employees equally. Firms with between 25 and 90 employees have until the end of 2021 to prove their equal pay structure. Those who fall below standards will face a daily fine of £350 and public shame. By 2022, it’s hoped that the country’s gender pay gap will be closed.

Following collaboration between the Icelandic Ministries of Welfare and Finance, the Icelandic Confederation of Labour (ASÍ), SA – Business Iceland and the Action Group on Equal Pay, the law was based on international ISO environmental management standards already used by most companies to comply with eco-friendly regulations.


Initially published as a voluntary measure in 2012, the Equal Pay Standard is designed to value each occupation, analyse salary structures and ensure adherence to existing employee laws.

A pilot of 11 governmental agencies, two councils and eight private companies in 2013 laid the pathway for the equality law. It identified the problems stopping women from higher-paying jobs, such as long unsociable working hours.


In April 2018, UK organisations with over 250 employees were legally required to publish their gender pay gap data, with shocking results. Of the 10,016 companies surveyed, a staggering 78% of companies paid men more than women.

Across these organisations, the proportion of women in leadership positions was found to be significantly less than the proportion of men. The data revealed that men held 61% of senior roles compared to just 39% of women. CMI’s Mind the Gender Pay Gap research, released last year in collaboration with XpertHR, supported these findings.

CMI has repeatedly called on organisations to push for gender equality in the workplace by using transparency measures.

CMI’s Blueprint for Balance and its CMI Women network offers advice to businesses to boost equality and support the rise of female leaders. Commenting on the gender pay gap findings from 2018, Ann Francke, chief executive of the CMI said that this showed: “the scale of the challenge we continue to face, and the painfully slow progress being made.”

Read more: information on the Blueprint for Balance and CMI Women.

Image: Shutterstock

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