The Directorate of Labour's Equal Pay Policy

The Directorate of Labour’s policy is that all employees shall receive equal pay and enjoy equal terms of employment for jobs that are the same or of equal value with no unsubstantiated pay gap. 

Equal pay means that wages are determined in the same manner for women and men. The criteria which wage decisions are based on shall not involve gender discrimination.  Wages are defined in Article 2, Item 9 of the Equality Act,  nb umber. 150/2020 as normal remuneration for work and commission of any kind, direct or indirect, whether it is fringe benefits or other payments that the employer pays to the employees for their work.

In order to follow the equal pay policy, the directorate is obliged to document, implement, maintain and continuously improve the administration of the equal pay system based on the ÍST 85 standard and decide how its demands will be met. The directorate has implemented a procedure and defined a criteria on which wage decisions are based where each and everyone is paid for their work considering its value, regardless of gender, gender identity or other unsubstantiated claims. 

The Directorate of Labour’s goal is that unexplained pay gap shall not be more than 2%.

To reach that goal the directorate will:


  • Implement a certified equal pay system based on the equal pay standard ÍST 85, document it and ensure its consistency.
  • Conduct a wage analysis at least once a year where jobs of equal value are compared, and examine whether there is a gender pay gap and publish the results for the employees.
  • React to unexplained pay gap with consistent improvements and monitoring. If there is an unexplained pay gap between individuals, there will be an immediate reaction, but if there is an unexplained pay gap between groups, that will be corrected at the beginning of next year.
  • Make an internal inspection and hold an annual supervisor’s review meeting. 
  • Follow the relevant laws, regulations and collective agreements existing at any given time, and confirm in the meeting compliance with the law.
  • Introduce the policy annually to the directorate’s employees. The policy shall also be accessible to the public on the directorate’s external website.


The Equal Pay Policy is an inextricable part of the directorate’s wage policy.

Approved in a supervisory board meeting on the 11th November 2021.

 Unnur Sverrisdóttir, Director General.

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