Reykjavík Grapevine - 02.02.2018, Page 12

Iceland’s Equal
Pay Law Sets New
World Standard
Will it close the gender pay gap by 2022?
Iceland has always been praised as a
country with great equality between
men and women. It also recently be-
came the world’s first nation to make
it mandatory for companies and in-
stitutions with more than 25 employ-
ees to prove that they pay men
and women equally for the
same job.
The new Equal Pay
Certification law took
effect in Iceland at
the beginning of this
year. Although Ice-
land first passed leg-
islation on equal pay as
early as 1961, the gender
pay gap persisted. In 2015,
women earned 1 4-20%
less than men, according
to Statistics Iceland. With
the new law in ef-
fect, the Icelan-
dic government
hopes to close the
gap entirely by
2022.
Eliminating
gender bias
The bill was ini-
tially introduced
by Þorsteinn Ví-
glundsson, who
s e r v e d a s t h e
Minister of So-
cial Affairs and
Equality in 2017.
He was also the
Managing Direc-
tor of SA–Busi-
ness Iceland from 2013 to 2016.
“The Equal Pay Law will help com-
panies and institutions eliminate
whatever gender-based bias there
may be in pay, and it also helps them
identify indirect work selection,
like why women are not taking on
certain jobs rather than others,” he
says. “There's increase in employee
satisfaction after implementing the
standard because people have more
confidence in how the company re-
wards or decides on pay. ”
Implementation
The new law requires com-
panies and institutions
with 25 or more em-
ployees annually to
obtain an Equal Pay
Certif ication from
the Centre for Gen-
der Equality. In order
to obtain certification,
companies and institu-
tions need to implement
an equal pay management
system following guide-
lines in the Equal Pay
Standard. An accredited auditor will
conduct an audit, and if the compa-
ny or institution fulfils the require-
ments, it will receive a certification
that must be renewed every three years.
Companies and institutions with
more than 250 employees are re-
quired to obtain certification by the
end of this year, because they have
more resources and infrastructure to
implement the standard. Depending
on the size, smaller companies have
more time. If a workplace does not
obtain certification by the deadline,
it will receive a fine of up to 50,000
ISK (around €397) per day.
Years in the making
Before Þorsteinn introduced the
Equal Pay Standard to the parlia-
ment, it was a voluntary measure that
primarily large companies used as
part of their marketing strategy. “The
overall concept had been in prepara-
tion for a long time,” says Þorsteinn.
“It started back in 2008 as a volun-
tary initiative initiated by the social
partners. The trade unions proposed
that we should develop some kind of
equal pay mechanism, which quickly
developed into the methodology of an
international management standard.
And that was in development
between 2008 and 2012.”
Hannes G. Sigurðs-
son, Deputy Director
General at SA–Busi-
ness Iceland, was
one of the people
w h o h e l p e d d r a f t
the Equal Pay Stand-
ard. “We looked at the
model of other interna-
tional standards like en-
vironmental standards,
management standards
and quality standards,”
Hannes explains. “We used that
framework to develop the Equal Pay
Standard.”
After the standard was completed
in 2012, the first pilot project began
a year later. “Companies and institu-
tions were trying out the methodol-
ogy of the standard, and how simple
or complicated it would be to imple-
ment,” Þorsteinn comments. “That
was an ongoing project between 2013
and 2016.”
Work of equal value
The new Equal Pay Law addresses pay
discrepancies between women and
men who are doing work of equal
value. One of the main tasks Icelan-
dic companies and institutions face
is to define which jobs are of equal
value. “You can imagine how difficult
it is for the largest corpora-
tions or institutions, like
the National Hospital,
which is the biggest
employer in Ice -
land,” says Hannes.
In other words,
the law doesn’t tar-
get pay differences
b e t w e e n m e n a n d
women who have jobs
of different value. Þor-
steinn says that during
the pilot phase, the Di-
rectorate of Customs
found that 80% of the office workers
were women, while 80% of the cus-
toms officials were men. If a customs
official’s work value is higher than an
office worker’s value, it means that
customs officials are paid more. In
this case, women are still paid less
than men, because most of them are
office workers at the Directorate of
Customs.
Even though the law doesn’t tack-
le this problem directly, it will help
companies and institutions focus on
gender and change their approaches.
“We have to look at the reason why
women aren't applying for customs
official jobs,” Þorsteinn says. “They
identified that shifts were long—12-
hour shifts for customs officials—
and that is something that women,
more so than men, do not like. For
example, due to family. So, they have
been looking at the possibility of
changing the shift system to 8-hour
shifts, or offer more flexible shifts to
attract more women.”
Critique of the new law
Halldóra Mogensen is an MP from
the Pirate Party and the chair of the
Welfare Committee. She had a few
concerns when the law was being
discussed in the Parliament. “One of
the main worries we had was that the
Equal Pay Standard is copyrighted,”
says Halldóra. “We didn't even know
what rules companies have to follow
when we were passing this law.”
The Equal Pay Standard is owned
by Staðlaráð Íslands, an independent
association that publishes Icelandic
standards. “This company charges
10.000 ISK to look at the rules. You're
not allowed to copy it or post it any-
where. It's not a transparent docu-
ment,” Halldóra continues. “They
should have negotiated with the com-
pany and had this as a public
d o c u m en t b efore p u t -
ting through this law.”
H a n n e s f r o m
S A – B u s i n e s s I c e -
land thinks that the
standard is an ex-
tra burden for com-
panies and it should
be kept voluntary. “If
you impose such a way
of working and think-
ing upon thousands of
companies, you're chang-
ing the way they behave
o n a d a i l y b a s i s ,” h e s a y s .
Þorsteinn, however, has a differ-
ent perspective. “If you want to bring
about change, sometimes you just
have to force it,” he argues. “It doesn't
happen entirely just on a voluntary
basis.”
The road ahead
Iceland has set a new standard for
the world in gender equality at the
workplace. “It is a matter of justice,
and a matter of basic human rights,”
Þorsteinn says.
The government hopes to close the
gender pay gap by 2022, but Halldóra
thinks that there’s still more that
needs to be done. “It's a step in the
right direction, but the battle isn’t
over,” she says. “You're still gonna
have a lot of women in society who
get paid a lot less than men, not
because they're working the
same jobs, but because
women choose different
jobs than men do, and
the jobs they choose
are undervalued.” For
example, some of these
jobs are nurses, teach-
ers, cleaners, etc.
“Why is raising our chil-
dren to become healthy,
happy and informed indi-
viduals not the most im-
portant job in our society?”
Halldóra questions. As for how to
tackle the root of the problem, the
answer is still unknown. “That's not
a problem that can be solved with
one policy, which is why no one's do-
ing it,” Halldóra finishes. “Part of the
solution is rethinking our economic
system, how we value these differ-
ent jobs and why we value them in
this way.”
Halldóra Mogensen
Hannes G. Sigurðsson
Þorsteinn Víglundsson
Words:
Jessica Peng
Photos:
Art Bicnick
LIFE
“The Equal Pay
Law will help
companies and
institutions
eliminate
whatever
gender-based
bias there may
be in pay.”
12 The Reykjavík Grapevine
Issue 02 — 2018
Icelandic women and men came out to protest the gender wage gap
First