Iceland Becomes First Country to Punish Companies for Paying Women Less Than Men

Iceland began the new year by becoming the first country in the world to mandate that all its companies must pay men and women equally. Following years of passing legislation promoting equal pay, employers that fail to ensure pay parity will now be subject to fines, thanks to a law passed last spring that went into effect Monday.

"We have had legislation saying that pay should be equal for men and women for decades now but we still have a pay gap," Dagny Osk Aradottir Pind of the Icelandic Women's Rights Association told Al Jazeera. "We have managed to raise awareness, and we have managed to get to the point that people realize that the legislation we have had in place is not working, and we need to do something more."

Under the new law, companies that employ more than 25 people will have to prove to the government that they're paying men and women equally. Officials hope the move will help Iceland to completely close its gender wage gap by 2020.

Iceland has long been admired by progressives as a model of gender equality, filling nearly 50 percent of its parliament seats with women. Supporters of the new law say it couldn't have been put into action without the strong presence of female lawmakers.

For the past nine years, the small island country has been the world's highest-ranking nation in terms of gender equality according to the World Economic Forum's (WEF) Global Gender Gap Report. Iceland has managed to close its gender gap by about 10 percent since the report was first compiled in 2006, according to the WEF's markers which include political empowerment, economic opportunity, and education access as well as compensation.

As Iceland makes strides in its gender equality goals, the United States' gender wage gap has been narrowing slowly, with women earning 83 percent of men's salaries. The U.S. ranks at number 49 on the WEF's list; less than 20 percent of members of Congress are women.

According to the American Association of University Women, at the wage gap's current rate of narrowing, American women would have to wait until 2119 to be paid equally to their male counterparts. The Trump administration has shown little interest in improving the gap, with the president suspending an Obama-era rule which required employers to provide the government with pay equity data.

Supporters congratulated Iceland on its new system while lamenting the United States' failure to take similar steps.

"We must follow the example of our brothers and sisters in Iceland and demand equal pay for equal work now, regardless of gender, ethnicity, sexuality or nationality," said Sen. Bernie Sanders (I-Vt.) on his Facebook page.