Iceland’s Equal Pay Law Requires Employer Payroll Certification

Payroll on Bloomberg Tax is built to get you to the right answer faster and more efficiently. Get all the payroll intelligence you need with Bloomberg Tax expert analysis, perspectives and...

By Anna Massoglia

Employers in Iceland are to be required to obtain certification of their payroll systems to demonstrate that women and men receive equal pay for equal work, under an amendment to the Act on Equal Status and Equal Rights of Women and Men that came into force Jan. 1, 2018.

The changes are to take place in four phases.

Employers with at least 250 employees are required to have completed the certification process prior to Dec. 31, 2018; employers with at least 150 employees but fewer than 250 employees need to have completed certification by Dec. 31, 2019; employers with at least 90 employees but fewer than 150 employees need to have completed certification by Dec. 31, 2020, and employers with at least 25 employees but fewer than 90 employees need to have completed certification prior to Dec. 31, 2021.

Employers are to be required to renew equal pay certification every three years.

The certification is based on the equal pay standard, which provides requirements and guidance for employers to establish a payroll management system that meet standards for job classification and salary analysis. The full text of the equal pay standard is only available from the Icelandic Standards Council at a cost of 10,730 Icelandic krónur ($103.33).

To receive certification, employers are required to demonstrate to accredited certification bodies that all of the requirements of the standard have been met. Certification documentation is to be kept on file with Iceland’s Center for Gender Equality.

Employers in Iceland are required to give employees equal pay for the same or equal work, but are not to be required to give the same exact amount of wages to each employee under the new law. Instead, employers are to continue to be allowed to consider individual factors, group factors, and special skills of an employee for determining wage decisions as long as there also are substantive considerations that do not involve direct or indirect gender discrimination as outlined in the standards.

Employers are to be subject to per diem fines of up to 50,000 Icelandic krónur ($481.50) per day for failure to sufficiently report on compensation.

To contact the reporter on this story: Anna Massoglia in Washington at amassoglia@bloombergtax.com

To contact the editor on this story: Michael Baer in Washington at mbaer@bloombergtax.com

For More Information

The amendment to the Act on Equal Status and Equal Rights of Women and Men is available from the Ministry of Welfare.

Full text of the requirements and guidance for employers to establish a payroll management system in compliance with the equal pay standard is only available, in Icelandic, at a cost of 10,730 Icelandic krónur ($103.33) from the Icelandic Standards Council, an independent association whose legally proscribed role is the publication of Icelandic standards and the representation of Iceland in international standards bodies.

More information regarding payroll for Iceland is available in Bloomberg Tax's Iceland payroll primer.

Copyright © 2018 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Payroll