New Requirements for Reporting on the Gender Pay Gap

The Icelandic Parliament (Alþingi) has adopted amendments to the Act on Equal Status and Equal Rights Irrespective of Gender, introducing a new framework for how employers demonstrate pay equality. Under the new legislation, equal pay certification and equal pay confirmation will be removed. In their place, employers will be required to submit regular reports on gender pay disparities.

Scope of the new requirements
The new reporting obligations apply to companies and public institutions with 50 or more employees on average over the year.
Companies and public institutions with 25 or more employees will continue to be required to prepare and submit an equality plan.

Employers’ obligations
Employers falling within the scope of the law must, every three years, submit data to the Directorate of Equality demonstrating that their pay systems:

• Ensure equal pay for the same or equally valuable work

• Are based on gender-neutral criteria

Reporting requirements
The reporting must include, among other elements:

• Job classification based on objective criteria

• Gender-disaggregated pay analysis

• A corrective action plan where an unexplained gender pay gap is identified

Entry into force

• The legislation will take effect on 1 September 2026.

• Employers that currently hold a valid equal pay certification or confirmation will not be required to report under the new system until the certification or confirmation expires.

• Employers subject to the obligation that do not hold such certification must submit the required data to the Directorate of Equality within six months from the entry into force of the law.

Reporting process
A dedicated application and information portal is currently under development and will be ready by 1 September 2026. The system will be accessible via the Directorate of Equality’s website and through island.is, where further guidance and educational materials will also be made available.

Role of the Directorate of Equality
The Directorate of Equality will be responsible for:

• Monitoring compliance with reporting requirements

• Maintaining public registers of reporting entities

• Publishing a list of employers that have fulfilled their legal obligations

Objectives of the amendments
The new framework places increased emphasis on transparency. Employers will be required to present the results of pay analyses to their employees and ensure access to this information, subject to data protection considerations.
The key objectives of the amendments are to:

• Increase transparency in pay practices

• Strengthen genuine pay equality

• Shift focus towards measurement, analysis, and corrective action rather than formal certification

• Reduce and ultimately eliminate the gender pay gap