Iceland has become the first country in the world to enforce equal pay between men and women.

The legislation, which took effect on January 1 2018, means larger firms will have to prove their male staff are not paid more than their female employees of face fines.

Companies with 25 members of staff and over are obliged to obtain government certification of their equal-pay policies or face being slapped with financial penalties.

Iceland has become the first country in the world to enforce equal pay between men and women. The legislation, which came into force on the first day of 2018 and currently affects larger firms only (pictured: The Cabinet of Iceland and the Prime Minister's Office in Reykjavík)

'They get a certification after they confirm the process if they are paying men and women equally,' said Dagny Osk Aradottir Pind, a board member of the Icelandic Women's Rights Association.

'It's a mechanism to ensure women and men are being paid equally,' she told Al Jazeera.

'We have had legislation saying that pay should be equal for men and women for decades now but we still have a pay gap.'

The legislation, which took effect on January 1 2018, means larger firms will have to prove their male staff are not paid more than their female employees of face fines

Iceland is home to approximately 323,000 people and has a strong economy based on tourism and fisheries.

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.

The bill was supported by Iceland's centre-right administration, as well as its opposition, in a parliament consisting of nearly 50 per cent female MPs.

Companies with 25 members of staff and over are obliged to obtain government certification of their equal-pay policies or face being slapped with financial penalties

According to the Global Gender Gap Report, which uses markers such as economic opportunity, political empowerment, and health to measure gender equality in the country, Iceland has been one of the fastest-improving countries in the world over a ten year period.

'I think that now people are starting to realise that this is a systematic problem that we have to tackle with new methods,' Aradottir Pind said.

The Icelandic government have laid out plans to completely eradicate the wage gap by 2020.