Iceland becomes first nation to make equal pay law

The Icelandic equal pay law came into effect in the new year.

A tiny Scandinavian nation has become the first in the world to make pay equality a legal requirement.

The new law came into effect in Iceland on January 1 after first being announced on International Women's Day on March 8 last year.

Under the legislation, businesses with more than 25 employees will now have to receive official government certification to prove their equal-pay policies.

Any companies or government agencies which cannot demonstrate equal pay between staff will risk fines.

Dagny Osk Aradottir Pind, a board member of the Icelandic Women's Rights Association, told Al Jazeera the law would help to end the gender pay gap, which the Icelandic government hopes to eradicate entirely by 2020.

"It's a mechanism to ensure women and men are being paid equally," she said.

"We have had legislation saying that pay should be equal for men and women for decades now but we still have a pay gap.

"I think that now people are starting to realise that this is a systematic problem that we have to tackle with new methods.

"I really feel that we have managed to raise awareness, and we have managed to get to the point that people realise that the legislation we have had in place is not working, and we need to do something more."

Despite its small population of only 330,000 people, Iceland has a long and proud record of championing women's rights.

In 1975, one fifth of the country's female population took to the streets of capital Reykjavik to protest women's rights, while 90 per cent of women took part in professional and domestic strikes on the same day to prove the worth of women.

The unprecedented day of protest brought the nation to a standstill and paved the way for future gender equality wins.

An all-female political party was founded soon after and by 1999, over one-third of Icelandic MPs were women.

Following last year's national election, Iceland became the "most equal parliament in the world" after female candidates won 48 per cent of the country's 63 seats — without any quota system in place. In Australia, by contrast, female MPs make up 32 per cent of parliament.

In 2000, the island nation introduced a groundbreaking parental leave policy and it has been ranked the best country in the world for gender equality by the World Economic Forum for nine years running.

According to the 2017 World Economic Forum report, the top five countries for gender equality are Iceland, Norway, Finland, Rwanda and Sweden.

Yemen is last, and Australia is 35th — up from 46th place in 2016.