3 April 2017
According to the World Economic Forum’s rankings, an organisation that lists the best and worst countries at providing equal pay, Iceland has the smallest pay gap in the world. Typically, the countries that must publish their pay gaps by law are closer to the top of the list, and Iceland has become the first country to make companies with over 25 employees prove equal pay by law. Companies that must publish their pay gaps in the public domain are much more likely to reduce their pay gap.
However, it is also important that both genders are paid correctly and on time. The companies that frequently underpay their staff, pay them late – or not at all – will struggle to retain talent in the short and long term. So, what can companies around the world do to ensure that they are complying to local and global legislations?
By using a payroll provider that understands local legislations, companies can ensure that they are complying to local requirements. This is particularly important for multinational organisations that have offices in various countries. If a company is only complying with the payroll legislations in their headquartered country, and are not focussing on the requirements in other countries, they are at risk of breaking regulations and incurring heavy fines.
Legislations across the world are diverse, but there are some regulations that should be adhered to across multiple countries. For example, the United States has payroll requirements that apply to every state (including the Fair Labour Standards Act), similarly to the European Union that has regulations like the Working Time Directive. The regulations that apply to more than one country also need to be taken into consideration when multinational companies are paying their employees, rather than local ones only.
It is important to ensure that employees are paid correctly all year round, regardless of gender, as well as working to close the pay gap between genders. By investing in a global payroll provider that can provide payroll with local expertise and global knowledge, companies will stay ahead of the game in the race to retain talent.