Iceland has passed a new legislation prohibiting companies from paying its male staff more than its female staff.

The new law enforcing equal pay between genders came into effect on January 1, according to Al Jazeera.

Under the new legislation, companies that employ more than 25 people will have to obtain a government certificate to demonstrate they adhere to pay equality. If they do not comply, the company risks facing a hefty fine.

The law was announced on March 8 last year to mark International Women’s Day as part of Iceland’s drive to eradicate the gender pay gap by 2022.

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Dagny Osk Aradottir Pind, of the Icelandic Women’s Rights Association, told Al Jazeera: “The legislation is basically a mechanism for companies and organisations to evaluate every job that’s being done, and then they get a certification after they confirm the process if they are paying men and women equally.

“It’s a mechanism to ensure women and men are being paid equally. We have had legislation saying that pay should be equal for men and women for decades now but we still have a pay gap.”

Iceland is home to more than 323,000 people and has been ranked the best in the world for gender equality by the World Economic Forum for the last nine years.