Iceland was named the top country for gender equality in 2009, but they had a bit of ways to go: Women in Iceland were still earning 14 to 20 percent less than their male counterparts until very recently. However, Iceland just made a huge stride in closing the pay gap: They basically made it illegal to pay women less than men.
NPR reports that companies in Iceland are now required to demonstrate that they pay male and female employees without gender discrimination, and failing or neglecting to do so can result in fines.
Some reports have suggested that it’s now illegal to pay women less than men in Iceland, which isn’t necessarily accurate: Icelandic laws have required equal pay for women and men since 1961, much like the United States makes it illegal to pay an employee less for reasons of gender, race, sexual orientation, etc.
“What is remarkable about the new law in Iceland is how it enforces equal pay standards. It does not rely on an employee to prove she was discriminated against,” NPR notes. “Instead, the burden is on companies to prove that their pay practices are fair.”
Nordic Information On Gender explains, “[T]he employer must determine which work tasks each position entails and then assign a value. The salary must be decided based on the position and not the person carrying out the work. The idea is that this will eliminate salary discrimination … ‘The standard makes employers pay a fixed salary for a certain type of work. However, there is some room for an upward adjustment for example if a worker adds extra value to the work, but such exceptions must be decided in accordance with the standard and justified in writing,’ says Maríanna Traustadóttir [from the Icelandic Confederation of Labour]. She points out that the standard makes the setting of salaries more clear and transparent, which benefits both the employers and the employee.”