New Law In Iceland Aims At Reducing Country's Gender Pay Gap The law, which went into effect on Monday, requires employers with 25 workers or more to prove that they pay men and women equally for equal work.

New Law In Iceland Aims At Reducing Country's Gender Pay Gap

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Women in the U.S. are paid on average about 80 cents for every dollar a man earns for the same job. And despite American efforts to close that gap, it persists. Other countries are moving more aggressively to fix this problem. Iceland has just started enforcing a new law that requires employers with 25 workers or more to prove that they pay men and women equally for equal work. That applies to the private sector and to the government. To talk more about this measure, we're joined by Brynhildur Heidar- og Omarsdottir. She's the managing director of the Icelandic Women's Rights Association. Thanks for joining us.


SHAPIRO: Many countries, including the U.S., have some version of an equal pay law. Explain what makes Iceland's law different.

OMARSDOTTIR: Well, we in Iceland have had an equal pay law in effect since 1961. That was the first time the Althing, the Iceland Parliament, banned pay discrimination in the workplace. But just like in the U.S. and frankly every country in the world, these laws have not worked. But what happened in 2017, the then government of Iceland decided that they wanted to make this standard not a voluntary one. The law says that every company with 25 or more employees needs to undergo audit to - with using the standard to prove that they are actually not discriminating in the workplace against men and women.

SHAPIRO: Who conducts the audit? And what are companies required to do if it turns out there is a pay gap?

OMARSDOTTIR: Well, the companies are required to correct it. So as soon as a company figures out that there is something wrong, they basically raise the wages of those that have not been paid fairly. And in many of those cases, it is women who are being - who are getting pay raises, but in some cases, it's also men who get pay raises when the standard shows that they are not being paid fairly for their work.

SHAPIRO: In the U.S., employers often find loopholes. They either give people different titles or maybe they argue that people come to jobs with different prior experience. Do you expect employers in Iceland to do the same?

OMARSDOTTIR: The standard actually allows for that. It basically sort of like - you know, it's a set of equations that basically show like, No. 1, you need to quantify what the value of the job that the worker does is to the company. Of course, in Iceland, about 80 percent of the country is unionized. So we already have a market that is heavily regulated. It's something that, you know, I know that is not the case in the United States, but what I find most exciting about the standard is that the standard can be used even in the United States even if it's not on a mandatory basis because the equal pay standard is a standard that's written up to, well, international code. It's an ISO standard, so companies in the U.S. could perceivably use it and then basically use it as a part of the marketing.

SHAPIRO: So you're saying a company could say our products are made by a workforce that pays women and men equally, the audit proves it and use that as an advertising point.

OMARSDOTTIR: Absolutely. So basically what is - so as - I, as a consumer, that I go into a store and I make a choice that I'm only going to buy products that are fair trade or products that are organic and I can make a choice that I'm only going to buy products from a company that, you know, has a certification saying that, you know, I'm an equal pay company.

SHAPIRO: It sounds like these audits could be expensive. Are any employers expressing concern about the cost to businesses?

OMARSDOTTIR: Yeah, the audits will conceivably be expensive, and that's why in Iceland we are starting with the biggest companies that have the most resources. But it's a question of what kind of society do we want to live in. If you want to run a business in Iceland, you have to be willing to pay men and women equally. So this is a cost that, you know, we decided that, you know, it would be of benefit to society and that was of more benefit than, you know, saving companies money.

SHAPIRO: Brynhildur Heidar- og Omarsdottir, thanks so much for joining us.

OMARSDOTTIR: Thank you so much for having me.

SHAPIRO: She's with the Icelandic Women's Rights Association.

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