For eight years in a row, this tiny Nordic nation has topped the World Economic Forum’s ranking of nations with the smallest gender gap.

Image: The Global Gender Gap Report 2016

Yet, even in the country considered by the experts to be the best for gender equality, a gap still persists: Icelandic women, on average, earn 14 to 18% less than men.

As part of a plan to close Iceland’s gender pay gap by 2022, the government announced a new law that will require public and private companies to pay employees equally “regardless of gender, ethnicity, sexuality or nationality”, The Associated Press (AP) reported.

Under the proposed legislation – announced on International Women’s Day – companies with 25 or more employees would have to get certification to prove that they offer equal pay for work of equal value.

Prime Minister of Iceland Bjarni Benediktsson speaks during an observance of the International Women's Day 2017 at the United Nations in New York, U.S., March 8, 2017.
Image: REUTERS/Shannon Stapleton - RTS11ZOI

Though other countries (and the US state of Minnesota) have “equal-salary certificate policies”, Iceland is thought to be the first to make equal pay compulsory for both private and public firms, the AP report said.

Providing the new legislation passes through the Icelandic parliament as expected, the government hopes its Equal Pay Standard will be in force by 2020.

Equality and Social Affairs Minister Thorsteinn Viglundsson said that "the time is right to do something radical about this issue".

"Equal rights are human rights," he said. "We need to make sure that men and women enjoy equal opportunity in the workplace. It is our responsibility to take every measure to achieve that."

Iceland and gender equality

Iceland has brought in measures to improve equality for women, such as quotas on corporate boards and government committees. And in 2016, female representation in the Icelandic parliament reached 48%.

However, the country’s gender pay gap has not been shrinking fast enough.

In October, thousands of women across Iceland walked out of their workplaces at 2.38pm. The pay discrepancy means that Icelandic women effectively work without pay after this time, according to unions and women’s organizations.

Iceland’s commitment to closing its gender pay gap by 2022 comes as other countries across the world are stalling on economic gender parity.

Progress has been slowing down for women at work, notably in North America, according to the Forum’s Global Gender Gap Report, which looks at progress towards equality between men and women in four key areas: health, education, economy and politics.

The four nations that lead the 2016 ranking are all Scandinavian countries, led by Iceland.

Image: Global Gender Gap Report 2016, World Economic Forum