The EU mutual learning seminar, held in Reykjavik, examined Iceland’s ground-breaking Law on Equal Pay Certification, which came into effect in January 2018. The seminar was a good opportunity to learn more about the development of the equal pay certification legislation and how it is working in practice. As well as the host country, government representatives and independent experts from 14 EU Member States participated in the meeting.
The Law was developed as a response to the persistent gender pay gap in Iceland. Like many other countries, lack of pay transparency and difficulties for an employee to take legal action meant slow progress in closing the gap. The new law places a duty on employers to ensure that wage-setting does not discriminate against gender by requiring they seek certification by external auditors in accordance with the requirements of an Equal Pay Standard. The Law requires all public and private companies with 25 employees and over, which is approximately 80% of the Icelandic workforce, to have their salary system certified every three years with penalties for non-compliance. The standard does not require an employer to use a particular job classification system only that it meets the criteria of a uniform system across all jobs and all earnings and additional payments.
During the EU mutual learning seminar, there was a focused and in-depth discussion on how other countries are addressing the gender pay gap from a structural perspective and the extent to which the example of the Icelandic equal pay standard and legislation could be transferable. Many participants noted that their countries had taken measures to strengthen pay transparency, such as requirements to publish company income or equality reports. It was agreed that pay transparency is a prerequisite for equal pay enforcement but monitoring and compliance were challenges. There was a need to strengthen awareness of the business case for equal pay through training, guidance materials and toolkits. Participants also discussed applying sanctions for non-compliance on reporting obligations versus using positive motivation through company awards and other schemes. The role of the social partners was highlighted and it was noted that capacity building for trade unions to develop strategies to address the gender pay gap could be instrumental. Measures to link eligibility for public procurement contracts to the fulfilment of pay reporting obligations or other gender equality measures were also reviewed. Finally, it was noted that the gender pay gap is a consequence of inter-related factors and successful strategies must also include measures to address vertical and horizontal job segregation, including women’s lower participation rates in science and information technology sectors, and the gendered division of family and household responsibilities.