Italy has officially integrated the European Union’s Pay Transparency Directive into its national legal framework through the enactment of Legislative Decree 96/2026, which came into full force on June 7, 2026. This legislative milestone positions Italy as one of the first EU member states to meet the stringent deadlines set by the European Parliament and Council, signaling a transformative shift in how remuneration is disclosed, negotiated, and reported across the Italian economy. The decree applies broadly to both the public and private sectors, introducing a suite of obligations designed to bridge the gender pay gap and ensure that "work of equal value" receives "equal pay." While the Italian government has largely adhered to the original wording of the EU Directive, the new rules are deeply intertwined with Italy’s established system of National Collective Bargaining Agreements (NCBAs), which will serve as the primary benchmarks for assessing pay equity.
The Evolution of Pay Equity: A Chronological Context
The journey toward Legislative Decree 96/2026 began with the adoption of EU Directive 2023/970 in May 2023. The directive was established to address the persistent gender pay gap across Europe, which had stagnated despite decades of equal pay legislation. For Italy, the transposition of this directive represents an evolution of its existing "Codice delle pari opportunità " (Equal Opportunities Code).
The timeline for implementation is structured to allow businesses to adapt to the new administrative burdens. Following the decree’s entry into force in June 2026, the first wave of reporting obligations for large employers (those with 250 or more employees) will commence in June 2027. Mid-sized employers with 150 to 249 employees share this 2027 deadline, while smaller firms with 100 to 149 employees have been granted a longer transition period, with their first reports due by June 7, 2031. This staggered approach reflects the complexity of data collection and the need for the Italian Labor Ministry to finalize electronic reporting templates and technical guidelines.
New Mandates in the Recruitment Process
One of the most immediate changes for Italian employers concerns the recruitment phase. Legislative Decree 96/2026 mandates that all job advertisements or vacancy announcements must clearly state the initial salary or a specific pay band for the role. This requirement aims to eliminate the "information asymmetry" that often favors employers during wage negotiations.
Furthermore, the decree strictly prohibits employers and third-party recruiters from inquiring about a candidate’s current or previous remuneration history. This "salary history ban" is a critical component of the legislation, intended to prevent the perpetuation of pay discrimination from one job to the next. By forcing employers to set pay based on the objective value of the role rather than a candidate’s past earnings, the law seeks to reset the baseline for marginalized groups who may have been historically underpaid.
Transparency in Remuneration and Economic Progression
Under the new decree, transparency is not limited to the hiring phase; it must be maintained throughout the employment relationship. Employers are now required to make the criteria used to determine pay, pay levels, and economic progression easily accessible to all employees. For companies with more than 50 employees, this includes detailed disclosures on how an employee can move up the pay scale.
The definition of "pay" under the decree is expansive. It encompasses the basic wage or salary and all additional components, including payments in kind, bonuses, commissions, and other variable incentives. However, the decree introduces a more specific concept known as "pay level." This refers to the gross annual salary and the corresponding gross hourly rate but excludes "non-structural" individual benefits.
A notable nuance in the Italian implementation is the treatment of the "superminimo"—discretionary amounts paid above the minimums set by collective bargaining agreements. Because these are often viewed as personal and discretionary rather than structural, they may fall outside the strictest definitions of "pay level" for certain reporting purposes. Legal analysts suggest this distinction will be a point of significant scrutiny, as discretionary bonuses are frequently where gender-based pay disparities are most pronounced.
The Central Role of National Collective Bargaining Agreements (NCBAs)
Unlike some other EU nations, Italy’s pay transparency framework is heavily reliant on its robust system of collective bargaining. The decree stipulates that for employers who apply an NCBA signed by nationally representative unions, the obligation to disclose pay criteria is considered fulfilled if they refer to the classification levels and remuneration structures defined within those agreements.
The concepts of "same work" and "work of equal value" are also tethered to these agreements. "Same work" is defined as tasks that are identical or fall under the same classification level in the NCBA. "Work of equal value" refers to different tasks that are nevertheless comparable based on the classification criteria established by the bargaining agreements. By leveraging the NCBA framework, the Italian government aims to minimize the administrative burden on employers while ensuring that pay structures remain rooted in established social dialogue.
The Right to Information and Privacy Safeguards
Employees now hold a statutory right to request information regarding the average pay levels of their peers, broken down by gender. This applies to colleagues performing the same work or work of equal value. Upon receiving a written request—which can be submitted directly or through trade union representatives (RSU or RSA)—the employer has a maximum of two months to provide the data.
To facilitate this, employers must inform their workforce annually of their right to access this information. This can be done via internal intranets or company websites. For smaller companies (50 or fewer employees), the decree provides protections to ensure that individual salaries cannot be reverse-engineered from the data provided, thereby maintaining compliance with the General Data Protection Regulation (GDPR). The Labor Ministry is expected to release standardized templates to help small businesses navigate these privacy concerns.
Gender Pay Gap Reporting and Joint Assessments
The most rigorous aspect of the decree is the requirement for formal "Gender Pay Gap Reports." These must be submitted to a designated Monitoring Body. The frequency and timing of these reports depend on the size of the workforce:
- 250+ employees: Annual reporting starting June 2027.
- 150–249 employees: Reporting every three years starting June 2027.
- 100–149 employees: Reporting every three years starting June 2031.
If a report reveals a gender pay gap of 5% or more that cannot be justified by objective, gender-neutral criteria, the employer must conduct a "joint assessment" in collaboration with employee representatives. If the gap is not corrected within six months, the employer is required to adopt a formal remedial plan. This process involves the RSU (elected by the workforce) or the RSA (appointed by unions), ensuring that workers have a seat at the table when addressing systemic inequality.
Supporting Data and Labor Market Implications
The implementation of Legislative Decree 96/2026 comes at a time when Italy’s gender pay gap remains a complex issue. According to Eurostat data from the period preceding the decree, Italy’s "unadjusted" gender pay gap appeared lower than the EU average (approximately 5% compared to the EU’s 13%). However, economists often point to Italy’s lower female labor participation rate as a distorting factor. When looking at the "adjusted" gap—which accounts for education, experience, and sector—the disparity is often more significant.
The new reporting requirements are expected to bring much-needed clarity to the private sector, where pay secrecy has historically been the norm. Industry analysts predict that the increased transparency will lead to a rise in "equal pay" litigation, as employees gain the data necessary to challenge perceived discrimination. Furthermore, the ban on asking for salary history is expected to empower female job seekers, who statistically start their careers at lower pay points than their male counterparts.
Official Responses and Stakeholder Reactions
While the Italian government has framed the decree as a necessary step toward social justice and modernization, business associations have expressed concerns regarding the "bureaucratic weight" of the new rules. Confindustria, Italy’s main employers’ federation, has emphasized the need for clear guidelines on what constitutes "objective criteria" for pay differences to avoid a flood of frivolous lawsuits.
Conversely, major trade unions such as the CGIL, CISL, and UIL have welcomed the decree, particularly the role granted to the RSU and RSA in joint assessments. Union leaders have argued that transparency is the only way to expose the "invisible" disparities found in discretionary bonuses and performance-linked pay.
Practical Steps for Employers
With the decree now in force, Italian legal experts recommend that companies take immediate proactive steps:
- Conduct Internal Audits: Employers should perform preliminary pay audits to identify any gaps exceeding the 5% threshold before official reporting begins.
- Review Recruitment Policies: Job templates and interview protocols must be updated to remove salary history questions and include pay ranges.
- Refine Pay Criteria: Companies must document the objective criteria used for bonuses and career progression to ensure they are gender-neutral.
- Engage with Unions: Early dialogue with employee representatives can help smooth the transition to the new transparency requirements and prepare for potential joint assessments.
Legislative Decree 96/2026 represents a paradigm shift in the Italian labor market. By moving away from pay secrecy and toward a culture of openness, Italy is not only complying with EU law but is also attempting to foster a more equitable and competitive economic environment. As the Labor Ministry continues to release interpretative guidance, the true impact of these rules will become clearer, but the message to employers is certain: the era of confidential compensation has come to an end.
