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Starting this week, companies in Iceland are required to demonstrate that they pay male and female employees fairly — without gender discrimination. Failing to do so can result in daily fines. 

The law, which was passed last year and went into effect on Monday, is believed to be the first of its kind in the world and covers both the private and public sectors. 


Some headlines have claimed that the new law makes it illegal to pay men more than women. That is not exactly what happened. In Iceland — as in many countries, 

 — it was already illegal to pay men and women differently on the basis of their gender. (And, to be clear, it was and is legal to pay a man more than a woman, or vice versa, provided there is a valid reason.) 

As the Icelandic Women's Rights Association 

, equal pay for equal work has been mandated by Icelandic laws since 1961.
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. Instead, the burden is on companies to prove that their pay practices are fair. 



The policy change comes after years of discussion and pilot testing, based on frustration with the fact that several gender-equity laws were not budging the actual pay gap. 


Iceland has the best track record on gender equality in the world, 

. But the country still had a persistent pay gap 

as of last year. The gap exists across all occupational groups. According to 

, figures from 2010 showed about 8 percent of that year's gap remained "unexplained" after factoring in possible justifications. 



Iceland's new law applies to companies with 25 employees or more. Every three years, the companies will need to confirm that they are paying men and women equally for jobs of equal value. If they aren't certified, a daily fine will stack up. 

Those equal-pay standards have been suggested to companies since 2012, but this is the first time they will be mandatory. 


The focus of the law is specifically on gender equity. However, as Iceland's welfare office 

, the standard "can be used to prevent and eradicate all sorts of discrimination." Functionally, the law will also block pay discrimination on "race, religion, disability, occupational disability, age and sexual orientation grounds," the BBC noted last 

.

The new law was passed — perhaps not coincidentally — a year after female candidates 

 in Iceland's parliament.
As NPR's Bill Chappell 

, the country is a leader on gender issues:


A previous version of this story said Iceland has had a law against pay discrimination since 1963; in fact, the law passed in 1961. 

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Pay discrimination was already illegal. But the country's new law, the first of its kind in the world, requires companies with 25 employees or more to certify that they pay employees without bias.

Companies in Iceland now required to demonstrate they pay men, women fairly

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