The United States, for its part, only has two states (Alabama and Mississippi) without any laws at all protecting pay equity-however, as the American Association of University Women reports, only 8 states have strong ones.
"The new law by Iceland can help change attitudes to women in business as well as in politics, and inspire other countries to do the same", said Virginie Le Masson, a research fellow at the London-based Overseas Development Institute. Anyone who can't justify their salary compensation for employees will be met with fines.
For the past nine years, the island country in the North Atlantic Ocean, has been ranked by the World Economic Forum (WEF) as the world's most gender-equal country.
Senator Bernie Sanders praised Iceland for establishing equal pay Tuesday, demanding that the U.S.do the same.
By 2020, the Icelandic government, which supported the legislation on a bipartisan basis, seeks to eliminate its wage gap. But Icelandic women still earn, on average, 14% to 18% less than men.
More broadly, the USA lags other developed countries in closing the gender wage gap.
Motherhood leads many women to cut back on their hours working outside the home and to gravitate toward lower-paying jobs with less demanding work schedules, according to an October 2017 story in The Economist.
But here's what gives the ruling some weight: Companies with over 25 employees that don't follow through will be fined.
Despite improvements in some countries, women around the world are still struggling for equal pay, even as income levels increase.