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ALERT / JUNE 9, 2026
Italy approves final legislation implementing the EU Pay Transparency Directive
9 MIN READ
The Italian Council of Ministers approved the final legislative decree implementing the European Union (EU) Pay Transparency Directive on 30 April 2026. While the legislation closely incorporates the EU minimum requirements, it includes key adaptations that consider job classification systems set out in National Collective Bargaining Agreements (NCBAs), which are a prominent feature of the Italian labor system. The Decree was published in the Official Gazette on 1 June 2026 and enters into force on 7 June 2026.
Background
The European Union Pay Transparency Directive (Directive (EU) 2023/970, the “EU Directive”) entered into force on 6 June 2023 and requires each EU member state to transpose its provisions into their national law by 7 June 2026. The EU Directive sets minimum standards to strengthen pay transparency, promote equal pay for equal work, and impose gender pay gap reporting obligations on employers. While Member States must meet these minimum standards, they are also free to go beyond them, meaning national approaches to pay transparency may vary across the EU. (See Lockton article here (opens a new window) for further details on the EU Directive and roadmap for compliance).
The legislative decree (the “Decree”) was approved by the Council of Ministers on 30 April 2026, published in the Official Gazette on 1 June 2026, and enters into force on 7 June 2026.
Key details
Key details for employers to note include the following:
Types of employment contracts within scope
The Decree applies to all employment contracts, whether fixed-term, indefinite employment, or part-time, including managerial positions. Domestic employment contracts and intermittent employment contracts are excluded.
Definition of “pay”
The Decree adopts the EU Directive’s broad definition of “pay,” encompassing the basic salary and all amounts and values paid by the employer, directly or indirectly, including in kind, including any supplementary or variable components. As a result, employers will need to identify and measure all benefits provided to employees.
Definitions of “same work” and “work of equal value”
While NCBAs are not statutorily required, most employers in Italy apply them to employment relationships. Due to their key role in the Italian labor system, the Decree presumes that NCBAs ensure objective and gender-neutral wage classification systems.
The Decree provides that NCBAs shall set out the systems for determining and classifying pay based on objective and gender-neutral criteria. These systems will function as the “pay structures” referenced in the EU Directive to determine the categories of employees that carry out the same work or work of equal value as required by the EU Directive.
In line with this, “same work” and “work of equal value” are defined as follows:
“Same work” means work falling within the same classification and legal category of employment under the NCBA applied by the employer.
“Work of equal value” means different but comparable work as determined by the salary classification levels established by the NCBA applied by the employer.
If the employer has not applied an NCBA, the NCBA signed by trade union representatives at a national level that is comparatively most representative for that relevant sector will apply. Employers will also be permitted to use other job classification systems for determining wages, in addition to the applicable NCBA, if they are based on objective and gender-neutral criteria.
In all cases, in line with the EU Directive, objective and gender-neutral criteria shall include skills, responsibilities, and working conditions and any other factors relevant to the specific job or position.
Regulatory guidelines on these provisions are expected to be adopted by 31 December 2026 and will provide further clarity on how they will apply in practice.
Pre-employment
The Decree establishes the following pre-employment obligations for all employers, regardless of size, which are in line with the minimum standards under the EU Directive:
Employers will be required to provide information in job advertisements on the starting pay or pay range, based on objective and gender-neutral criteria, and the relevant provisions of the collective agreement applicable for the position.
Employers will be prohibited from asking applicants about their current or previous salaries. An additional requirement above the EU Directive’s minimum standard is that employers will also be prohibited from obtaining such information by other means, directly or indirectly, through third parties to whom they have entrusted the recruitment process.
Selection and recruitment procedures must be conducted in a non-discriminatory manner. Job advertisements must be drawn up on a gender-neutral basis, including in relation to the professional qualifications required.
Employee rights
Under the Decree, employees are entitled to the following rights, which are in line with the minimum standards under the EU Directive:
All employers are required to make available to employees the criteria used to determine their pay and pay levels. This obligation can be fulfilled by reference to relevant provisions of the applicable NCBA.
Employers with at least 50 employees must also make available to employees the criteria used to determine pay progression. As the EU Directive permits Member States to exempt employers with fewer than 50 employees from this obligation, Italy has chosen to make this obligation optional for employers with fewer than 50 employees.
Employees will have the right, on an annual basis and in writing, to request information on average pay levels by gender for comparable roles.
This information must be provided by the employer in writing within two months of the request. Employers may also fulfill this obligation by publishing this information on their intranet or on the restricted area of the employer’s website.
Employers must also notify employees annually of this right and the steps to exercise it.
To avoid the direct or indirect identification of individual workers in small enterprises, a subsequent regulatory decree will define how employers with fewer than 50 employees may collect and present this data.
Employees cannot be prevented from disclosing their wages.
These employee rights would apply to all employers, regardless of size. The only exception is the right to access criteria for pay progression, which only applies to employers with at least 50 employees.
Pay gap reporting obligations
Italy currently requires employers with more than 50 employees to produce a report on gender pay gaps and workplace conditions at least once every two years, under Article 46 of the Code of Equal Opportunities Between Men and Women (opens a new window) (Legislative Decree No. 198 of 11 April 2006) (the “Code”).
The Decree does not abolish this existing obligation but introduces additional provisions to meet the EU Directive’s minimum standards on pay gap reporting obligations. The new obligations would depend on the number of employees as follows:
Number of employees | Reporting frequency | First report due date |
250 and above | Every year | 7 June 2027 (for 2026 data) |
150 – 249 | Every three years | 7 June 2027 (for 2026 data) |
100 – 149 | Every three years | 7 June 2031 (for 2030 data) |
Italy has chosen not to impose reporting obligations on employers with fewer than 100 employees. However, these employers may report at their own discretion.
Employers would be required to report the following information for the previous calendar year:
The gender pay gap
The gender pay gap in supplementary or variable components
The median gender pay gap
The median gender pay gap in supplementary or variable components
The percentage of female and male employees receiving supplementary or variable components
The proportion of female and male employees in each wage quartile (i.e., the scale in which employees are divided into four equal groups according to their wage level, from the lowest to the highest)
The gender pay gap between employees, broken down by categories of employees and by basic pay and by supplementary or variable components
This information would be reported by employers to a monitoring body at the Ministry of Labor and Social Policies, which will publish the data. Employers are not required to make the information publicly available, such as through their websites, although they may choose to do so voluntarily.
The arrangements for the collection and processing of data by the monitoring body, as well as technical assistance and potential training to support employers on pay gap reporting obligations, are expected to be set out in subsequent regulatory decrees which have yet to be published.
Additionally, employers must make accessible to employees, information on the gender pay gap between employees, broken down by categories of employees and by basic pay and by supplementary or variable components. If requested by an employee:
The employer must provide this information, if available, for the previous four years.
The employer must, within a reasonable time, provide a reasoned reply and remedy any unjustified discrimination.
Joint pay assessments
Employers would be required to conduct a joint pay assessment with employees’ representatives where all the following apply:
The report shows a gap in the average pay level between female and male employees of at least 5% in a category of employees.
The employer has not justified this difference based on objective and gender-neutral criteria.
The employer has not corrected this unjustified difference within six months of the date of disclosure of the information.
The joint pay assessment would aim to identify, correct and prevent unjustified pay differences between employees. The employer must, within a reasonable time, take necessary measures to remove the unjustified pay differences.
These provisions are in line with the minimum standards under the EU Directive.
Enforcement
The existing remedies, administrative obligations, and penalties set out in the Code would apply in the event of violations of rights or findings of discrimination under the Decree.
Notably, the Decree creates a presumption of compliance with the principles of equal pay and transparency for employers who apply an NCBA signed by trade union representatives at a national level. In these cases, the employee must provide evidence of discriminatory individual pay treatment to rebut the presumption.
Employer action: ACT
With the final legislation now in force, employers should take steps to ensure compliance with the new pay transparency requirements. Key priorities include reviewing NCBA classifications and pay structures, identifying fixed and variable pay components, updating recruitment processes and job advertisements, establishing procedures for responding to employee pay information requests within the required two-month timeframe, and assessing readiness for future pay gap reporting obligations.
The Decree provides for additional implementing guidance, including regulatory guidelines expected by 31 December 2026 concerning objective and gender-neutral job classification systems and related pay transparency requirements. Employers should continue to monitor guidance issued by the Ministry of Labour and Social Policies and other competent authorities.
The Lockton Global People Solutions Compliance Practice will continue to monitor developments and will update this article as further guidance or implementing regulations become available.
Further Information
