Italy has formally established itself as a leading European Union member state in the pursuit of wage equity by implementing the comprehensive Pay Transparency Directive. Through the enactment of Legislative Decree 96/2026, which officially entered into force on June 7, 2026, the Italian government has introduced a rigorous new framework designed to eliminate gender-based pay disparities and foster a culture of openness regarding remuneration. This legislative move aligns with the broader European Union timetable and represents a significant shift in the Italian labor market, affecting both public and private sector employers.
The decree is a direct transposition of Directive (EU) 2023/970, which was adopted by the European Parliament and the Council in May 2023. While Italy has historically utilized a robust system of National Collective Bargaining Agreements (NCBAs), the new decree adds a layer of individual and corporate accountability that previously existed only in fragmented forms. By adhering closely to the EU’s requirements without significantly "gold-plating" the provisions—adding extra national requirements beyond the EU mandate—Italy aims to balance the need for social progress with the practicalities of business administration.
The Foundations of Legislative Decree 96/2026
The primary objective of the new law is to enforce the principle of "equal pay for equal work or work of equal value." Under the new rules, the definition of work value is no longer subjective but is anchored in the established classifications of Italy’s national collective bargaining framework. This integration ensures that the new transparency requirements work in tandem with existing labor relations rather than overriding them.
The decree applies to all employers, regardless of size, though certain administrative burdens are scaled based on the number of employees. For example, while transparency in recruitment applies to every business, the frequency and depth of pay gap reporting are determined by the size of the workforce. This tiered approach is intended to protect small and medium-sized enterprises (SMEs) from excessive bureaucratic strain while ensuring that large corporations, which employ the bulk of the Italian workforce, lead the way in transparency.
New Standards for Recruitment and Candidate Protection
One of the most immediate changes brought about by Legislative Decree 96/2026 is the transformation of the hiring process. Effective immediately, job advertisements and vacancy announcements must provide clear information regarding the initial pay or the applicable pay band for the role. This information must be provided in a way that ensures an informed and transparent negotiation on pay, typically by including it in the job posting or disclosing it to the candidate prior to the interview.
Furthermore, the decree introduces a strict "salary history ban." Employers and third-party recruiters are now prohibited from asking candidates about their current or previous remuneration. This measure is specifically designed to prevent past pay discrimination from following a worker into a new role. By forcing employers to base their offers on the objective value of the position rather than the candidate’s previous earnings, the law seeks to break the cycle of the gender pay gap that often compounds over a professional’s career.
Internal Transparency and the Right to Information
For existing employees, the decree introduces unprecedented access to salary data. All employers are now required to make the criteria used to determine pay, pay levels, and economic progression accessible to their staff. These criteria must be objective and gender-neutral.
A critical distinction is made within the decree between "pay" and "pay level." "Pay" is defined broadly to include the basic wage and any other consideration, whether in cash or in kind, which the worker receives directly or indirectly from the employer. This includes bonuses, commissions, and allowances. However, "pay level" is a more focused concept, referring to the gross annual salary and corresponding hourly rate, excluding non-structural or discretionary payments.
The "superminimo"—a common Italian practice where discretionary amounts are paid above the minimum levels set by collective agreements—occupies a complex position under the new law. While individual discretionary bonuses might fall outside the "pay level" definition for reporting purposes, they remain subject to the broader "pay" definition when assessing discrimination. This distinction is expected to be a focal point for future legal interpretations and labor disputes.
Employees now hold the right to request, in writing, information on the average pay levels of their colleagues, broken down by gender, for categories of workers performing the same work or work of equal value. Employers are mandated to respond to such requests within two months. To ease the administrative burden, companies can satisfy the annual notification of this right by posting details on internal intranets or secure employee portals.
Reporting Requirements and Chronology of Compliance
The decree establishes a clear timeline for "Gender Pay Gap Reports," with the first major milestones occurring in 2027. The reporting obligations are structured as follows:
- Companies with 250+ Employees: These organizations face the most stringent requirements. They must collect and report data by June 7, 2027, and continue to do so on an annual basis.
- Companies with 150–249 Employees: These employers must also provide their first set of data by June 7, 2027, but their reporting cycle is triennial (every three years).
- Companies with 100–149 Employees: Recognizing the need for a longer transition period for mid-sized firms, the decree sets their first reporting deadline for June 7, 2031, with subsequent reports required every three years.
These reports must be submitted to a designated Monitoring Body. If a report reveals a gender pay gap of 5% or higher in any category of workers, and the employer cannot justify this gap through objective, gender-neutral factors, the company must conduct a "joint pay assessment" in cooperation with employee representatives (such as the RSU or RSA).
Joint Assessments and Remedial Action
The joint assessment is a corrective mechanism intended to move beyond mere reporting and into active resolution. If the 5% threshold is triggered and the gap is not corrected within six months of disclosure, the employer must work with unions to identify the root causes of the disparity.
The assessment must include a review of the criteria for pay and career progression and an evaluation of whether the gap is based on legitimate factors. If the gap is found to be unjustified, the employer is legally required to adopt a remedial plan. This plan must include specific measures to close the gap within a reasonable timeframe and must be developed in consultation with the workforce’s representatives.
The role of the RSU (Rappresentanze Sindacali Unitarie) and RSA (Rappresentanze Sindacali Aziendali) is central here. In companies where no such bodies exist, the decree allows for the involvement of local trade union representatives. This ensures that the process remains collaborative and that employees have a voice in the remediation of pay inequities.
Analysis of Implications for the Italian Labor Market
The implementation of Legislative Decree 96/2026 is expected to have profound structural implications for Italian businesses. Legal analysts suggest that the shift in the "burden of proof" is perhaps the most significant change for litigation. Under the directive’s principles, if an employer has not complied with the transparency obligations, the burden of proof in a pay discrimination case shifts to the employer, who must then prove that no discrimination occurred.
From an administrative perspective, HR departments will need to undergo a comprehensive audit of their current pay structures. The reliance on the "superminimo" and other discretionary "ad personam" increases will likely come under greater scrutiny. While these payments are not prohibited, they must be justifiable by objective criteria such as specific skills, responsibilities, or performance metrics that are applied consistently across genders.
There are also significant data privacy considerations. For smaller companies (fewer than 50 employees), the decree includes safeguards to prevent the indirect identification of an individual’s salary when sharing average pay data. The Ministry of Labor is expected to release further technical templates and electronic channels to ensure that transparency does not violate the General Data Protection Regulation (GDPR).
Reactions from Stakeholders
While the official government stance emphasizes modernization and social justice, reactions from the business community have been cautious. Employer associations, such as Confindustria, have expressed support for the principle of equality but have raised concerns regarding the "bureaucratic weight" of the reporting requirements, particularly for mid-sized firms.
Conversely, major labor unions including the CGIL, CISL, and UIL have welcomed the decree as a long-overdue tool for collective bargaining. Union leaders have noted that the right to information will provide them with the empirical data needed to negotiate better "second-level" (company-specific) agreements. They argue that transparency will not only benefit women but will improve the overall fairness and morale of the Italian workforce.
Looking Ahead
As Italy navigates the early stages of this new regulatory environment, several questions remain. The practical application of the rules to agency workers and the exact format of the Ministry of Labor’s implementing decrees are still pending. Furthermore, the distinction between "structural" and "non-structural" pay components will likely be tested in the courts.
Despite these uncertainties, the message of Legislative Decree 96/2026 is clear: the era of "salary secrecy" in Italy is coming to an end. Businesses that proactively embrace transparency, audit their pay scales, and modernize their recruitment processes will be best positioned to thrive under the new law. For the Italian workforce, the decree represents a landmark step toward ensuring that the value of work is determined by merit and objective contribution, rather than gender.
