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Under Iceland’s new equal pay law employers must prove compliance or face fines

Gender-based wage discrimination has long been illegal in Iceland, as it is in many countries around the world. But the gender pay gap persists. Under the Equal Pay Standard law which came into effect on January 1, employers now must prove that they are paying equal wages for the same work or work of equal value, and can be fined for non-compliance.

The law requires all companies with 25 or more full-time employees to obtain an equal pay certificate every three years based on guidelines jointly elaborated by the union confederation, employers and the labor and finance ministries. Companies must not only demonstrate that they have analyzed their pay structures, but that they have formalized in practice the process of ensuring non-discrimination. Employers who fail to comply face accumulating daily fines.

Experts from the UN Working Group on Business and Human Rights and the Working Group on the Issue of Discrimination against Women in Law and in Practice welcomed the legislation as an example of “The critical role that States can and must play in employing innovative tools to ensure that businesses respect the human rights of women”, adding that “Iceland’s action is in line with its international human rights obligations.”

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