More companies are talking about whether they pay men and women equally. In Iceland, they may soon have to prove it.
The country where strikes by women 40 years ago propelled it to the forefront of gender equality said on Wednesday — International Women's Day — that it would attempt to make employers prove they offer equal pay, regardless of gender, ethnicity, sexuality or nationality, according to a report by the Associated Press.
Citing Iceland's equality and social affairs minister, Thorsteinn Viglundsson, the report said the government will introduce legislation that requires all employers with more than 25 employees to get certified to prove that they pay people equally if they are doing equal work. “The time is right to do something radical about this issue,” Viglundsson told the AP, which said the legislation is expected to be approved because it has support from lawmakers sided with the government and opposition parties.
The bold move is not all that surprising coming from a country that the World Economic Forum has ranked best in the world for gender equality. Iceland comes in first on a “glass-ceiling index” created by the Economist to compare factors that affect women at work, placing above the United States, which comes in at 20, just below the Organization for Economic Cooperation and Development’s average. The gender pay gap in Iceland is about 14 percent, according to data cited by the Economist, compared with about 21 percent in the United States.
Meanwhile, mothers and fathers are mandated to receive months of paid parental leave, with 90 percent of fathers taking paternity leave, according to the Guardian. Women in the tiny country of 330,000 people won a record 30 seats in Parliament during last fall's election, nearly half of its 63 seats.
And with a quota system in place, women held 44 percent of corporate board seats in 2015, more than in any other European country. In such an environment, a mandate on proving pay data appears to be a natural extension.
The gender pay gap is a complex topic, one that can be primarily explained by differences in industry and occupation choice, hours worked and gaps for taking time off to have children. But researchers have also repeatedly found that part of the gap that remains is “unexplained” or unaccounted for by any of these factors. A report released Tuesday by the consulting firm Accenture finds that the gender pay gap in the developed market is on trend to close in 2080, but it could be shortened to 2044 if women, their employers, and government and academic institutions focus on digital skills and improved career management.
Other countries have taken stabs at getting companies to disclose more about how they pay men and women, though mandating proof appears to be new. In 2015, then-Prime Minister David Cameron announced his intent to force every company in Britain with more than 250 employees to publish the gap between what male and female employees earn. The measure was first tried as part of Britain's 2010 Equality Act, but it was voluntary, and only five companies offered the data.
British companies with more than 250 employees will be required by law to publish four figures each year on their web sites and on a government site, but they will provide the information on their own, without providing certification. Each company will have to share its gender pay gap, gender bonus gap, the proportion of men and women receiving bonuses, and how men and women rank in terms of pay within the organization.
In Switzerland, companies can apply to have their equal pay “certified” by an outside party without disclosing confidential information, but it is not mandatory. In Minnesota, after a law was signed in 2014, certain state contractors must obtain an “Equal Pay Certificate” from the state before executing a contract.
While a growing number of states have strengthened their protections for employees with new equal-pay laws, with California even requiring companies to prove they pay men and women equally for similar jobs, companies don't have to disclose the information publicly. Companies that want to become federal contractors have to share summaries of their pay data with the government, but again, the data isn't published.
Shareholders, meanwhile, have pushed companies including Facebook, Microsoft and Amazon to disclose their pay gap, and some have responded, whether propelled by investors or of their own accord. (Amazon.com founder Jeffrey P. Bezos owns The Washington Post.) Consultants have said overall figures that companies cite, which typically show no gap or virtually no difference, may be accurate at the aggregate level but can mask pockets in the organization where bigger gaps remain. In Iceland, at least, that may be about to change.