Italy has become one of the first EU Member States to formally implement the EU Pay Transparency Directive, introducing significant new obligations for employers around salary transparency, gender pay gap reporting, employee rights, and compensation governance.
On 7 June 2026, Italy's Legislative Decree No. 96/2026 entered into force, transposing Directive (EU) 2023/970 into Italian law. The new framework affects both public and private employers and introduces requirements spanning recruitment, pay structures, reporting, and employee access to compensation information.
Organizations operating in Italy should act now to ensure compliance, reduce legal risk, and strengthen pay equity practices.
1. EU Pay Transparency Directive Italy: Implementation Timeline
Italian implementation date: 7 June 2026
Italy formally transposed the Directive through Legislative Decree No. 96 of 7 May 2026, published in the Official Gazette on 1 June 2026 and effective from 7 June 2026.
Employers should begin reviewing:
- Payroll data quality
- Compensation frameworks
- Recruitment processes
- Job classification structures
- Gender pay gap reporting readiness
- Internal governance controls
Successful compliance will require collaboration between:
- Payroll
- HR
- Compensation & Benefits
- Legal
- Finance
- Executive Leadership
2. Current Pay Transparency Laws in Italy
Italy already has several pay equity and gender equality measures in place, including:
- The Italian Constitution
- Legislative Decree No. 198/2006 (Equal Opportunities Code)
- Law No. 162/2021 on gender equality certification
- Existing equal pay requirements
- Gender workforce reporting requirements for larger employers
The EU Pay Transparency Directive builds on these foundations by introducing:
- Mandatory salary transparency in recruitment
- Employee rights to compensation information
- Expanded gender pay gap reporting
- Joint pay assessments in certain circumstances
- Stronger enforcement mechanisms
- Increased employer accountability
The Directive moves organizations beyond traditional compliance toward more structured and transparent pay governance.
3. Salary Transparency in Recruitment in Italy
One of the most immediate changes affects recruitment practices.
Under Italy's new legislation, employers must provide information about the initial salary or salary range before employment begins. Salary information must be based on objective and gender-neutral criteria.
Employers should prepare to:
- Include salary ranges in recruitment processes
- Align compensation offers with defined pay structures
- Use objective and gender-neutral hiring criteria
- Standardize recruitment practices across the organization
Importantly, employers may not ask candidates about their current or previous salary history. This prohibition also applies to recruitment agencies acting on behalf of employers.
4. Pay Structures and Employee Rights
The Directive strengthens employee rights around compensation transparency.
Employees will gain access to information regarding:
- How pay is determined
- Salary progression criteria
- Pay levels within the organization
- Average compensation levels for comparable work
- Gender pay differences across worker categories
Employees can request information about their own pay level and average pay levels by gender for employees performing the same work or work of equal value. Employers must respond within prescribed timeframes.
To comply, organizations should ensure compensation systems are:
- Transparent
- Consistent
- Auditable
- Well documented
- Based on objective criteria
Many employers may need to strengthen:
- Job architecture frameworks
- Compensation governance
- Salary band structures
- Pay review processes
- Internal equity controls
5. Gender Pay Gap Reporting in Italy
The Directive introduces reporting obligations based on employer size.
Employers with 250+ employees
Annual gender pay gap reporting.
Employers with 150-249 employees
Reporting every three years.
Employers with 100-149 employees
Reporting every three years under phased implementation requirements.
Organizations must report on gender pay differences across worker categories and compensation metrics.
Where a gender pay gap of 5% or more cannot be justified by objective and gender-neutral factors, employers may be required to conduct a joint pay assessment with employee representatives.
Preparation should focus on:
- Payroll data quality
- Employee classification consistency
- Compensation data governance
- Reporting infrastructure
- HR and payroll system alignment
6. A Unique Feature of Italy's Implementation
Italy's implementation places particular emphasis on the country's National Collective Bargaining Agreements (CCNLs).
The assessment of "equal work" and "work of equal value" is closely linked to the classification structures established within applicable collective bargaining agreements. Employers may supplement these frameworks with internal job evaluation methodologies, provided they remain objective and gender-neutral.
This means organizations operating in Italy should review:
- Applicable CCNL classifications
- Internal grading frameworks
- Pay structures across comparable roles
- Documentation supporting compensation decisions
7. Enforcement and Compliance Risks
The Directive introduces stronger enforcement mechanisms across the European Union.
Potential risks include:
- Financial penalties
- Pay discrimination claims
- Reputational damage
- Increased regulatory scrutiny
- Compensation awards
- Higher documentation requirements
A key change is the shift in the burden of proof. Employers may need to demonstrate that pay differences are objectively justified and based on gender-neutral factors.
Maintaining accurate and auditable payroll records will be critical.
8. Impact on Payroll and HR Teams in Italy
Payroll and HR teams will play a central role in compliance.
Organizations will need:
- Reliable payroll data
- Consistent employee classifications
- Strong audit trails
- Gender pay gap reporting capabilities
- Compensation governance controls
- Alignment between payroll, HR, and reward systems
For multinational employers, standardized payroll reporting across countries will become increasingly important as transparency requirements expand.
9. How to Prepare for the EU Pay Transparency Directive in Italy
Organizations should begin preparing now by:
- Reviewing compensation structures
- Defining salary bands and job levels
- Conducting gender pay gap analysis
- Improving payroll data quality
- Reviewing CCNL classifications
- Standardizing job architecture
- Aligning HR and payroll systems
- Updating recruitment practices
- Training recruiters and hiring managers
- Documenting compensation decisions
- Building formal pay governance frameworks
Early preparation can help reduce compliance risk while improving workforce trust and organizational transparency.
How Payslip Supports Pay Transparency Compliance in Italy
Preparing for the EU Pay Transparency Directive requires accurate, standardized, and audit-ready payroll data.
Payslip enables organizations to:
- Standardize payroll data across countries
- Improve payroll reporting visibility
- Support centralized gender pay gap reporting
- Maintain audit-ready payroll records
- Strengthen cross-border payroll governance
- Create consistent global payroll reporting frameworks
With a Global Payroll System of Record and standardized reporting capabilities, organizations can establish a strong foundation for pay transparency compliance in Italy and across the European Union.
Final Thoughts
Italy has moved quickly to implement the EU Pay Transparency Directive, introducing one of the most significant changes to compensation governance in recent years.
For employers, compliance will require more than legal updates. It will require improvements in payroll data, reporting processes, compensation structures, recruitment practices, and organizational transparency.
Organizations that start preparing now will be better positioned to manage compliance obligations, reduce risk, and build greater trust with employees.
The challenge is no longer whether organizations should prepare.
The challenge is whether they are ready.
