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05. Pay Equity Laws
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05. Pay Equity Laws

Extent of Protection

The pay equity legislation consists of provisions in the abovementioned Discrimination Act, which set forth that employers are required to work with active measures to prevent discrimination and to promote equal rights and opportunities regardless of employees’ gender, gender identity or expression, ethnic origin, religion or belief, disability, sexual orientation and age. The employer’s active procedures shall include measures to promote pay equity, and to prevent non-objective differences in pay and benefits between women and men.


The employer can incur liability under the Discrimination Act, to compensate the employee for discrimination due to non-objective differences in pay and benefits based upon gender. Furthermore, if someone is discriminated against by a provision in an individual contract or in a collective bargaining agreement in a manner that is prohibited under the Discrimination Act, the provision shall be modified or declared invalid upon the request of the discriminated person.

In addition, the Equality Ombudsman supervises compliance with the Discrimination Act and may order an employer, inter alia, to provide information or to take measures deemed necessary for supervision and compliance with the pay equity legislation in the Discrimination Act. If such order is not complied with, the Equality Ombudsman can issue an order to fulfil the obligation subject to a financial penalty.


Significant enforcement or litigation has not yet occurred, however, several cases regarding individual employees have been brought before the Labour Court. Discrimination due to pay inequity has been concluded in few of these cases, since the employer has often been able to provide proof in respect of differences in pay being based on the work performed and, as such, that objective non-discriminatory reasons for the pay difference exists.

Other Requirements

In order to identify measures necessary to promote pay equity, an employer’s active policies shall include an annual review of provisions and practices applied in respect of pay and benefits. The annual review shall include an analysis of pay differences, inter alia, between women and men performing work that may be deemed comparable. An employer with ten or more employees shall document the employer’s review and analysis in writing and such documentation shall include measures deemed necessary by the employer, to correct non-objective differences and to promote pay equity.

Furthermore, the employer shall cooperate with employees, as well as with trade unions to which the employer is bound to by a collective bargaining agreement, regarding active measures to promote pay equity. The employer shall also provide relevant trade unions with information that is necessary for cooperation on active measures, but there are no requirements to keep the work with active measures on pay equity publicly available.

Any questions

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