In a world first, Iceland has made it illegal to pay men more than women.

Under new legislation, which came into force on Monday, agencies of government and companies employing more than 25 people will have to prove they offer pay parity to employees regardless of gender, nationality, race or sexuality.

Companies that fail to provide equal pay will be forced to pay fines under the law, with individual employees having the right to demand compensation.

Speaking to the i, Iceland’s Minister of Social Affairs and Equality Asmundur Einar Dadason described the move as a ‘landmark tool’ to tackle the gender pay gap.

Statistics Iceland estimates the pay gap in the country to be roughly 16%. The Icelandic Government intends to close the gap completely within the next four years, with ministers introducing a number of measures including quotas of at least 40% women on company boards.

Iceland ranked first in the 2017 Gender Pay Index by the World Economic Forum, whilst the UK placed 15th and the United States lagged behind in 49th.