Pay Equity Legislation: Iceland Leads the Way

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Iceland commemorated International Women's Day by enacting pay equity legislation. The move follows an October 2015 protest when thousands of women left their workplace at 2:38 PM, a time that symbolized the size of the pay gap, reports The Atlantic. While private sector wages are notoriously hard to mandate, Fortune reports that Icelandic organizations with at least 25 employees are now required to certify their compliance with wage equity, regardless of employee "gender, ethnicity, sexuality, or nationality."

Iceland's unprecedented move revitalized excitement and even propelled the global wage equity movement spearheaded by UN Women. Are other governments around the world working to equalize the playing field? More importantly, is there change ahead that will impose requirements on employers to provide equal pay for equal work and publicly report their efforts?

Global Trends in Wage Equity

According to the World Economic Forum, the top five countries worldwide have gaps of 80 percent or less, with the U.S. ranked 45th out of 144 countries. While there's been equal pay legislation in many countries for decades, there's still work to be done.

In New Zealand, a joint working group (union) brokered a government deal allowing professionals in social work, education, behavioral and communication-based professions to approach their employers about a pay equity raise. Workers who are able to demonstrate an equity claim are entitled to an increase, according to the New Zealand Herald.

Despite a "gender-balanced" cabinet, the Winnipeg Free Press notes Canadian Prime Minister Justin Trudeau is working to reverse Canada's widening gap by commissioning gender-based analysis of existing policies. Australia has given female professional cricket teams a serious raise and removed outdated policies that discriminated against pregnancy, according to Employee Benefits.

Is There Pay Equity Legislation That Works?

While today's female talent is more qualified than ever before, they're fighting against cultural biases, family responsibilities and a host of other issues to reach the C-suite. While there's responsibility on the organization and the government to equalize the playing field, there's hope for legislation that could make a real impact.

Here are three things HR leaders can do:

1. Institute Pay Transparency

Some public firms are required to treat salary data as public. When employees aren't forbidden to discuss salaries, organizations are held accountable.

2. Prohibit Wage Disclosure

Philadelphia has become the first U.S. city to prohibit employers from asking for a candidate's pay history. Massachusetts will soon follow suit, along with state agencies in New York. The Society for Human Resource Management (SHRM) notes that large-scale legislation is "in the works" in California and other places. By prohibiting disclosure of past salary data, talented female candidates could break a pattern of being underpaid.

3. Require Accountability

Seyfarth Shaw notes that HR is now required to keep data on wages and job classifications for three years. HR departments should work toward a system where transparency and accountability is the norm.

According to the American Association of University Women, women earn 80 cents on the dollar. While there's hope that other legislative bodies will be stirred after Iceland and demand wage transparency, HR leaders would be wise to get ahead of the curve and create a workplace that's committed to equal pay.

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