Following the publication of a new legislative decree, employers in Italy are approaching a significant shift in how compensation structures, transparency obligations and pay-governance processes are designed and managed. Legislative Decree No. 96 of 7 May 2026, which transposes European Union (EU) Directive 2023/970, was published in the Official Gazette on 1 June 2026. The legislative decree introduces substantial requirements in terms of transparency and reporting for both Italian employers and foreign employers with staff in Italy, effective 7 June 2026.

Context: Italy's transposition path

The EU Directive, approved in May 2023, aims to reduce the gender pay gap across the EU — still approximately 12%. According to Italian National Institute of Statistics (ISTAT) data published in January 2025, the gender pay gap in Italy stands at 5.6% on average (5.2% in the public sector) with a 15.9% differential in the private-controlled sector.

The scope of application is broad and includes:

• Public and private sectors
• All categories of employees, including executives and apprentices
• All types of employment contracts, excluding domestic workers and intermittent workers
• Job candidates during recruitment stages

Main obligations introduced by Legislative Decree No. 96/2026

Preemployment transparency

Employers will be required to:

• Provide pay information to job applicants
• Include pay information in job postings and vacancy notices
• Refrain from requesting or collecting current or past salary data
• Ensure gender-neutral recruitment and selection procedures

Transparency during employment

Employers must:

• Make pay-setting criteria accessible
• Disclose criteria for economic progression (for employers with 50+ employees)
• Grant employees the right to obtain average pay levels by gender for comparable roles
• Eliminate salary-confidentiality clauses

Definitions relating to pay

At EU level, the Directive adopts a broad and all-inclusive definition of pay, covering all components — annual, hourly, direct, indirect, monetary or in-kind — without exceptions. The objective is to provide a complete and transparent picture of the employee's actual overall compensation, capturing disparities that may arise from supplementary or variable components.

In contrast, the Italian legislative decree introduces a more selective definition, explicitly excluding from comparison "non-structural individual economic treatments" — components that are not systematic or collectively regulated and instead negotiated individually.

This narrowing of the comparison perimeter reflects the traditional Italian reliance on collectively regulated "structural pay" under the applicable National Collective Bargaining Agreements (NCBAs). However, this divergence may have significant consequences: while the EU framework strengthens full transparency by including all pay elements, the Italian approach may limit the ability to detect disparities embedded in individual, discretionary components — often the most prone to gender bias.

For these reasons, relying exclusively on NCBAs will not be sufficient to ensure compliance and avoid disputes. Employers will increasingly need robust job-evaluation and job-architecture systems

The role of NCBAs

A central element of the legislative decree is the requirement to ensure equal pay not only for the same work but also for work of equal value, to be assessed on the basis of common, objective and gender-neutral criteria.

In this framework, NCBAs are identified as the primary tool for comparison, with two key objectives:

1. Reducing administrative burdens through a presumption of compliance, although at the risk of diverging from the Directive's broader intent
2. Using NCBAs as a safeguard against "pirate" bargaining agreements (i.e., collective bargaining agreements negotiated outside the formal, legally mandated process), which disproportionately affect women

Although essential for establishing pay-classification systems, NCBAs alone are insufficient to address the more complex relationship between job classification and gender. Job-evaluation and job-architecture processes are more effective in this regard and will be increasingly necessary.

Gender pay-gap reporting (100+ employees)

Employers will be required to report annually on:

• Mean and median gender pay gaps
• Differences in variable remuneration
• Gender distribution across pay quartiles
• Pay gaps by categories of employees

Reporting is intended to capture evidence of direct, indirect and intersectional discrimination, including situations in which gender intersects with factors such as race, ethnicity and religion.

Joint pay assessment

A joint pay assessment may be triggered if:

• The pay gap reaches at least 5%
• Differences are not justified by objective and gender-neutral criteria
• No corrective measures are adopted within six months

Employers must conduct joint-pay assessments with worker representatives, identifying the causes of gaps and corrective measures to be implemented within six months of the conclusion of the assessment process (i.e., six months from the moment gaps are formally ascertained under Legislative Decree No. 96/2026).

Remedies, enforcement and sanctions

The legislative decree provides for:

• Full standing for workers, trade unions and equality bodies to bring claims
• Protection against retaliation
• Reference to the sanctioning framework under Legislative Decree 198/2006.

National monitoring body

A new body at the Ministry of Labour will be responsible for:

• Raising awareness
• Collecting, publishing and analyzing data
• Supporting employers
• Communicating with the European Commission

Timelines and reporting cadence

Implications for employers

Depending on their particular circumstances, employers may need to:

• Review job architecture and pay structures
• Increase transparency in recruitment and internal mobility processes
• Strengthen governance among Human Resources (HR), Legal, Reward and Payroll functions
• Consider whether they could have greater exposure to information requests and litigation risk
• Ensure they have complete, reliable and auditable HR and payroll data

Employers should begin work now to update job architecture, pay policies, internal governance and data systems to help ensure compliance with the requirements of Legislative Decree No. 96/2026 and, at the same time, to properly prepare and structure 2026 data for reporting obligations and future deadlines. Early alignment helps reduce compliance risks, strengthen internal equity and improve competitiveness.

Critical considerations

Although the publication of Legislative Decree No. 96/2026 in the Official Gazette represents the final step in the transposition and implementation of EU Directive 2023/970, the text — as approved — leaves several structural and cultural critical issues unresolved, which could limit its scope and effectiveness.

Narrower definition of "pay": The legislative decree's narrower definition of "pay" could exclude discretionary-pay components, where disparities often arise.

Inability to fully address cultural and structural biases: The legislative decree regulates formal criteria — classifications, levels, objective factors — but is not a forum for addressing societal and cultural influences on pay decisions.

Examples include:

• Purported gender preferences in corporate benefits
• Longer average career tenure among men (as many more women than men step away from their careers for periods when children arrive), which benefits men under tenure-based pay systems

No provisions addressing gender-dominated occupations: The legislative decree does not address disparity inherent in occupational roles that historically have been filled by women rather than men. For example, care, support, administrative and other roles predominantly held by women remain structurally undervalued and often underpaid, with limited career progression.

The EU Directive and the legislative decree compare equal or equivalent work, without addressing the economic undervaluation of female-dominated sectors. This issue inevitably links to the debate on Italy's minimum wage, historically tied to NCBAs.