The legislator has adopted a measured transposition approach to transposition, entrusting a central role to collective bargaining and introducing a set of definitions that does not faithfully reproduce that of the Directive, with possible significant interpretative implications. Companies are called upon to take immediate action to adapt their remuneration systems, selection processes and internal procedures to the new compliance requirements.
Introduction and scope
The Decree implements Directive (EU) 2023/970 in Italy, aimed at strengthening the principle of equal pay between men and women for equal work or work of equal value through pay transparency. The Decree applies to all employers, in relation to fixed-term and permanent employment relationships, also with executives, with the exception of intermittent employment contracts. With regard to the obligations of transparency prior to employment, the discipline also extends to candidates.
The Italian approach: the definitional framework and the role of collective bargaining
The Decree contains key notions that condition its entire application. “Pay”, in line with the Directive, includes any compensation—fixed, variable or in kind—paid in relation to the employment relationship, and is the benchmark for the principle of equal pay and for the disclosure obligations towards candidates.
The “pay level” is instead a more restrictive notion, introduced by the Italian legislator without direct correspondence in the Directive: it includes only continuous and fixed pay elements, excluding non-structural individual components, recognised on a personal, discretionary or temporary basis. It is on this parameter that the information rights of workers during employment are based and, for companies employing more than 100 employees, the calculation of the gender pay gap and the obligation of joint pay assessment. The practical effect is that a share, even a significant one, of the actual pay gap could remain undetected.
A second distinctive element of the Italian transposition is the central role of collective bargaining. The application of a National Collective Bargaining Agreement (NCBA) stipulated by the comparatively more representative trade unions generates a simple presumption of compliance with the principles of equality and transparency—an important safeguard, but one that does not prevent the individual employee from demonstrating discriminatory treatment. Collective bargaining also becomes the main reference for defining the notions of “same work” and “work of equal value”, anchoring the identification of comparable groups of employees to the NCBA’s personnel classification’s system.
The five pillars of transparency obligations
1. Transparency in the pre-employment phase (Art. 5)
The obligation of pre-employment transparency applies to all employers, without any company’s size threshold. In particular, job advertisements must indicate the initial pay (or its range) and the provisions of the applicable collective agreement and be drafted according to gender-neutral criteria, including with reference to professional titles. From now on, a practice that is still quite common today will also be prohibited, that of asking candidates, even through intermediaries, for information on salaries received in current or previous employment relationships.
2. Transparency during the employment relationship (Art. 6)
The employer is required to make the criteria used for determining pay and pay levels accessible to employees, as well as—for employers with more than 50 employees—those relating to pay progression.
The Italian legislator introduces a simplified mechanism: the obligation is deemed to have been fulfilled with the information pursuant to Article 1, paragraph 1, of Legislative Decree 152/1997 and, for employers who apply an NCBA stipulated by comparatively more representative trade unions, reference can be made to the criteria, classification levels and economic treatments provided for therein.
3. Individual right to information (Art. 7)
Each employee will have the right to request and receive in writing—no more than once a year and with the obligation to respond within two months from the request—information on the average pay levels, broken down by sex, relating to their category. Also in this case, simplified mechanisms are provided for the fulfilment of the obligation. The request can also be made through trade union representatives, or equality bodies.
The restrictive definition of “pay level” given by the Italian legislator could determine—depending on the interpretation that will be given in practice—a compression of the exercise of the right to information, as meant by the European Union legislator.
4. Reporting obligations (Art. 9)
This is the obligation with the highest implementation complexity. It is incumbent on employers with a workforce of at least one hundred employees and is substantiated in the communication of seven indicators, suitable for representing both the gap in the fixed pay component and that in the complementary or variable components, in average, median and quartile form. The data must be communicated to a monitoring body and, limited to some, made accessible to employees and their representatives.
Data aggregation mechanisms are provided for employers who adopt a unitary group salary policy.
The deadlines are differentiated according to the size of the company: (see the summary table below).
5. Joint pay assessment (Art. 10)
The obligation to carry out a joint assessment with employees' representatives arises if the reports show a difference in the average gender pay level of at least 5% in any category, not justified on the basis of objective and gender-neutral criteria, and not corrected within six months of the date of the communication.
The evaluation includes the analysis of the reasons of the gap, the percentages of pay improvement after leave and the identification of corrective measures. The Labour Inspectorate and the territorially competent equality bodies may be invited to take part in the procedure in the event of failure to reach agreement at company level.
Legal protection and sanctions (Articles 12-13)
The Decree refers to the anti-discrimination system of the Equal Opportunities Code (Legislative Decree 198/2006), guaranteeing access to the special procedure (Art. 38) to obtain injunctions and compensation for damages, including non-pecuniary damages. The right to take legal action is extended, by proxy, to employees' representatives, trade unions and associations committed to gender equality.
Any unfavourable treatment of those who have exercised the rights provided for by the Decree (protection against victimisation) is also prohibited. On the evidentiary level, the burden of proof is reversed: in the event of failure to comply with transparency obligations, it is up to the employer to prove the absence of discrimination.
On the sanctioning front, violations involve the application of Art. 41 of the aforementioned code, which provides for administrative penalties from EUR5,000 to EUR10,000, the revocation of benefits and, in the most serious cases or recidivism, exclusion for up to two years from financial and credit facilities and public procurement.
Concluding remarks
The Decree presents some areas of interpretative uncertainty relevant to corporate compliance.
The first concerns the notion of “pay level”: the wording used by the Italian legislator does not clarify the status of items widespread in practice such as, for example, ad personam superminimums.
In a context of interpretation that is still uncertain and already the subject of heated debate, companies wishing to define an internal compliance policy will have to consider the real risk that, in court, the principle of interpretation in conformity with the European Directive may be invoked, with the potential effect of extending the scope of the notion beyond the boundaries drawn by the transposition decree. In this scenario, the internal decision-making phase relating to the identification of the items to be included in the pay level and the gender gap will be particularly sensitive.
The second uncertainty relates to “work of equal value”: the Decree anchors it mainly to the collective bargaining system, while the Directive imposes a substantial assessment based on skills, effort, responsibilities, and working conditions—with the risk that the Italian approach, at present, may be considered excessively formalistic.
In this regard, some clarity in resolving these interpretative uncertainties may come from the implementing ministerial decrees expressly contemplated by the Decree, which are expected to be issued by the end of the current year. These measures will be required to provide definitional and operational guidance, thereby enabling companies to establish their compliance frameworks with greater certainty.
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