Iceland sets the bar when it comes to equal pay

Iceland sets the bar when it comes to equal pay


New equal pay legislation in Iceland has been passed as a result of six decades of lobbying which has been headed by Fríða Rós Valdimarsdóttir, chair of the Icelandic Women’s Rights Association.

From the beginning of 2018, every company with 25 or more staff must gain certification from an accredited regulator to show they pay their women and men employees equally. Businesses with between 25 and 90 employees have until the end of 2021 to prove their equal pay structure. The penalty if they don’t comply? A daily fine of £350 and, let’s face it, public shame. By 2022, it’s hoped that the country’s gender pay gap will be closed.

Good work Iceland. It proves to the world that such measures are possible (albeit arguably a little more complex to introduce in other countries).

So, what about the UK? Let’s have a recap. Back in April 2018, companies over 250 employees were legally required to publish their gender pay gap data. Here we learnt that of the 10,016 companies surveyed, 78% of companies paid men more than women. As a top line, it’s shocking. What it didn’t go into was what percentage of this related to a disparity in equal pay for equal work. That’s not to say it should be disregarded. More that it needs to be substantiated.

More recently, the Equality and Human Rights Commission commissioned a survey of 2,515 employees in organisations with over 250 members of staff to understand the impact of the gender pay gap on staff motivation and behaviour. Their headline result shows that 61% of women take an organisation's gender pay gap into consideration when applying for jobs.

What’s more 58% of women would be less likely to recommend their present employer as a place to work if they had a gender pay gap, and half of women say that a gender pay gap would reduce their motivation in their role and their commitment to their employer.

As a whole, the survey suggests that businesses with larger pay gaps than their competitors are at risk of losing out on the best talent and suffering reputational damage. What is the male take? Whilst 56% of women said that their organisation having a gender pay gap would reduce their motivation, only 25% of men agreed with this. 39% of men said that they would feel less proud to work for an employer with a gender pay gap, compared to 60% of women.

Unsurprisingly, men are a lot more apathetic, given the gender pay gap swings in their favour. Yet it’s quite nice to see that there’s only 11% difference between men and women (80% of women and 69% of men) who would be willing to take part in actions and activities to help their employers tackle the gender pay gap.

But what does this mean in terms of change? Of action? Where’s our legislation? Currently the onus is on employers to produce action plans with specific targets and deadlines alongside their pay gap figures, which clearly set out what their data has told them and what action they will be taking to close their pay gaps.

The Equality and Human Rights Commission’s Chair David Isaac, speaking at the ACAS Future of Work conference, said "The message to all employers from your existing and prospective female staff is very clear from these results. They want action, and if they don’t see change there is a very real risk that they won’t join you or, most importantly, stay with you. It will also affect their commitment to you.

"It’s crucial that all employers think seriously about this issue and demonstrate to their workforce that they are committed to closing the gender pay gap. A working environment which allows everyone to achieve their full potential is vital. If you don’t deliver on this you will fail to access a huge talent pool and will put your business at real competitive disadvantage."

The question is will it happen? Women might not like that a company is listed as having a disparate gender pay gap when researching an employer. Yet, when push comes to shove, will it actually result in them not joining?

Or will it take, like Iceland, new legislation to finally bring about parity in pay amongst men and women in the workplace?

Carolyn Fairbairn, CBI Director-General said, "This data shows just how important real action on closing the gender pay gap is.  Of course women must have equal opportunity in the workplace and expect potential employers to deliver.

"Gender pay gap reporting has shone a light on this important issue. Transparency is a potent tool for progress: what gets measured, gets changed. The litmus test of success is now what firms do to improve their scores and create more diverse and inclusive workplaces.

"But the gender pay gap will not be closed by company action alone.  Businesses want to work in partnership with the Government to provide better careers advice in our schools, improve technical education and offer affordable childcare for working parents."

Wednesday, 14 November 2018

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