International mechanisms to revalue women's work: research

Appendix 1 – Case Study 6 – Iceland: Equal Wage Management Standard

Iceland has been ranked number one on the World Economic Forum’s Global Gender Gap Index for 12 years (2009–20). The GPG fell from 20.5% in 2008 to 13.8% in 2019^[101], however, this is adjusted for working hours. Collective bargaining covers 90% of workers^[102]. In 2017 the Icelandic Parliament introduced the Equal Wage Management Standard (EWMS), based on a job evaluation tool. It is a certified mandated standard and the result of tripartite working between employer associations, the Government and trade unions. From 2018 Iceland became the first country to require companies to prove they pay employees in the same roles equally, regardless of their gender, sexuality, or ethnicity. From 2020 certification became a requirement with daily fines for organisations without certification.

Initiative

In 2017 the Icelandic Government mandated organisations with 25 or more employees in both the private and public sectors to prove that they pay men and women the same for work of equal value. This law was driven by the commitment of the social partners to develop a bottom-up tool for companies to use to help close the GPG, based on equal pay certification under the Standard ÍST (Icelandic) 85 standards. Certification involves a two-step job evaluation system to disassociate work tasks from skills and values the task itself rather than the incumbent. The standard highlights four main criteria – expertise, responsibility, effort, and work environment – that the company is required to consider. An external certification process performed by accredited auditors checks compliance, with a daily fine of around 400 euros a day for non-compliance. Employers are required to renew their certification every three years and an Equal Pay symbol is conferred by the Centre for Gender Equality, confirming the organisation has established procedures ensuring its handling of, and decisions on, pay do not include gender-based discrimination.

Outcome

The Equal Wage Management Standard (EWMS) places the onus on employers to prove equal pay and reportedly has been well received and addresses enforcement, lacking in other international equal pay certification schemes. Third-party enforcement promotes compliance. The positive benefits of the EWMS include giving transparency to employees and employers about how wages are designed and tasks valued, but it has also stimulated wider discussion on how jobs are valued and criteria for valuation. However, it is also reported that implementation of the EWMS is time-consuming and resource intensive, especially for smaller organisations who have less experience of implementing standards. Additionally, there was a lack of infrastructure to support the standard, including a sufficient number of certification bodies. It is recognised the Standard can only promote equal pay within an organisation, but cannot ensure equal pay for work of equal value at societal level or the wider undervaluation of women’s work. It has been suggested that there is a failure to agree on how value is attached to gendered jobs that undermines job evaluation at the organisational level^[103].

Applicability

The applicability of the EWMS to Scotland is limited by Westminster retaining power over employment and equal opportunities law. There is scope, however, to introduce some form of Equal Pay Certification strengthening the GPG reporting duties by revising the Scottish Specific Duties Regulations 2012. In particular, there could be an external body responsible for monitoring GPG reporting with certification and the possibility of punitive measures for non-compliance.