In both the public and private sectors, all workers should have access to information on individual wage levels and average wage levels broken down by gender.
By 7 June 2026 EU states must implement European Directive 2023/970 which came into force on 6 June 2023. The directive introduces new obligations for employers on transparency and equal pay.
The goal of the European legislature is to reduce the wage gap through the introduction of specific pay transparency requirements.
According to the directive’s “recitals”, within the EU women earn on average 13 % less than men for the same work, and this gap stems from “a lack of transparency in pay systems”.
Scope and employers’ obligations
Going into the details of the EU provisions, the scope of the directive encompasses all employers, both public and private, and imposes obligations of wage transparency right from the selection stage.
Specifically, regarding the pre-employment stage, there is a requirement for employers to provide male and female job applicants with detailed information regarding job-specific wage levels. In addition, employers will be prevented from requesting information on current or past salaries of male and female job applicants.
On the other hand, employers are required to provide all male and female workers with access to information on individual wage levels and average wage levels broken down by gender during the employment relationship.
Additional disclosure and transparency requirements are then provided with respect to information on the gender pay gap identified by categories of workers and broken down by fixed and variable components of pay. In fact, such information should be addressed to all male and female workers, their representatives and, upon request, to the Italian Labour Inspectorate and equality bodies.
Under the directive this parties are entitled to seek clarification with respect to the information provided. Where pay differences found are not justified by objective criteria, it will be the employers’ obligation to remedy them.
Reporting on pay gap
The timing and frequency of these reports depends on the number of employees. In particular:
1) for employers with at least 250 employees, the obligation will take effect on 7 June 2027, and annually thereafter;
2) for employers with a workforce of between 150 and 249 employees, the obligation will take effect on 7 June 2027, and every three years thereafter;
3) for employers with a workforce of between 100 and 149 employees, the obligation will take effect on 7 June 2031, and every three years thereafter.
Continue reading the full version published in Norme & Tributi Plus Lavoro of Il Sole 24 Ore.
On 23 November 2023, Stefania Raviele participated in the third edition of WomenX Impact, an event born from an idea by Eleonora Rocca to give voice to women who have distinguished themselves in their career paths, and to companies which have committed themselves to important projects in the Diversity & Inclusion area.
During the event, together with Alice Farella Monti, Stefania gave a keynote speech entitled: “Killing It softly: how to kill the gender bias that impacts your career” and addressed the importance of recognising and understanding prejudices to learn not only to fight them, but also to avoid normalising them.
Directive (EU) 2023/970 introduces new employee protection and new employer obligations on equal pay and transparency. The Directive requires Member States to adapt their local legislation, promoting (and even imposing) wage transparency including in relation to private employment relationships.
The same obligations will apply to employers with between 150 and 249 workers, who will be required to provide the information by 7 June 2027 and every three years thereafter. Employers with between 100 and 149 workers will have until 7 June 2031 and every three years thereafter.
In our country, as pointed out, implementing the provisions of the Directive will certainly impact employment law: firstly, it will be necessary to amend existing regulations, such as, for example, those relating to the timing and manner of notifying the National Labour Inspectorate (Ispettorato Nazionale del Lavoro) and other supervisory bodies.
Collective agreements are also likely to be affected by the implementation of the directive, with the probable introduction of some specific mechanisms for consultation and communication with trade union stakeholders, through a mechanism that is already tried and tested, as it already exists for employment and company performance data.
It is also highly likely that implementation of the Directive will require a mechanism to be established through national legislation for monitoring and, where appropriate, sanctioning breaches of the new obligations. In line with the Directive’s preamble, moreover, equality bodies will play a major role in both supervision and the application of sanctions. With regard to the latter, the possibility for equality bodies to act as employee representatives would contribute to improving the effectiveness and economic sustainability of the protection of the rights of stakeholders.
The introduction of the new legislation will add to and expand the scope of existing protections. An example of this is Italian Legislative Decree no. 198/2006 (the so-called Equal Opportunities Code), which already contains rules on equal pay, which will be expanded and supplemented by the new legislation on the employer’s burden in the event of reporting of wage discrimination.
In this regard, the current wording of the Equal Opportunities Code currently includes a special mechanism for the allocation of the burden of proof in cases of alleged wage discrimination. This mechanism provides that the complainant bears a reduced burden of proof compared to the general rules for civil proceedings, while the employer is responsible for proving the absence of discrimination. The Directive would further extend this protection by explicitly introducing a concept of “reversal of the burden of proof”. Consequently, the employer will have to prove not only the absence of discrimination, but also that it has fulfilled all relevant regulatory obligations properly and timely. This would mean greater protection and guarantees for people who consider themselves victims of wage discrimination.
It is more difficult, on the other hand, to imagine that new heads of damage could emerge from the breach of the provisions implementing the legislation in question, since only the damage actually suffered by the injured party is compensable, in its various forms, and other heads of damage (such as the so-called punitive damages of Anglo-Saxon origin) have no place in our civil law system.
Finally, the implementing legislation will have the difficult task of answering a number of questions that have significant practical impact: what will happen in situations where there are no actual reference points for comparison, such as in the case of tasks assigned to a single employee? Will it be possible to rely on statistical data or will it be necessary to assess the situation in real time? What implications will the implementation of highly diversified remuneration policies have? How can employers protect the confidentiality of their remuneration policies while avoiding making this information known to competitors?
The legislator will have to take these issues into account in advance in order to effectively and safely manage the impact of the Directive and regulatory changes promoting gender equality, as they seem to represent a real regulatory revolution in this field.
Continue reading the full version published in Il Sole 24 Ore’s Guida al Lavoro.
Last May, Directive 2023/970 of the European Parliament and of the Council was published in the Official Journal of the European Union.
The Directive entered into force on 6 June 2023 and Member States will have to implement the provisions contained therein by 7 June 2026, failing which the infringement procedure may be started against them.
Each Member State (including Italy) is required to adopt all the legislative measures necessary to guarantee pay transparency including in the private sector.
In particular, national legislation shall introduce legal obligations requiring employers to provide adequate information on wages and salary levels both to applicants for a job position and to existing workers.
In this regard, the Directive establishes that applicants for a job position must be guaranteed the right to receive all information on pay levels relating to a specific job, while all workers shall be able to access information on individual and the average pay levels broken down by sex, by personnel categories or by categories of workers performing the same work as them. The employer shall also be prevented from asking candidates for information on pay received in current or previous employment relationships.
To guarantee the functioning of the transparency mechanisms introduced, there shall also be an obligation for employers to inform all workers on an annual basis of their right to receive the information in question. In addition employers employing more than 100 employees shall mandatorily provide this information also to the designated authority.
This information should also be provided to workers’ representatives, labour inspectorates and equality bodies, who will also have the right to ask for further details of any data provided, including explanations of any gender pay differences.
National legislative instruments – to be adopted in compliance with the Directive – shall guarantee all workers access to information on individual and average wage levels broken down by gender, placing a burden on the employer to adopt appropriate and functional mechanisms for this purpose.
Employers will also have to prepare a description of the gender-neutral criteria for determining pay and career progression and will have to provide workers who request it with all the information on the pay level.
Member States will have to ensure that employers provide information relating to their organisation, in particular on the gender pay gap (in its complementary or variable components) both in the allocation and in the quantification, describing the number of female workers and male workers in each quartile pay band.
Employers with at least 250 workers shall, by 7 June 2027 and every year thereafter, provide the aforementioned data with reference to the previous calendar year. The same obligations apply to employers who have between 150 and 249 workers, who shall, by 7 June 2027 and every three years thereafter, provide the information, while employers who have between 100 and 149 workers have until 7 June 2031 to provide the information and it is to be provided every three years thereafter.
Other related insights:
In its message no. 1269 of 3 April 2023, the INPS [Italy’s National Social Security Institute] extended the deadline for submitting the request for social security contribution exemption for private employers who are in possession, as of 31 December 2022, of the gender equality certification referred to in Article 46-bis of Legislative Decree of 11 April 2006, no. 198
In particular, the application deadline for the 1% social security contribution exemption (initially set for 15 February 2023) was postponed to 30 April 2023.
In the same message, INPS also announced that special indications will be provided, in agreement with the Ministry of Labour, to allow – also in light of the results of the first phase of the application for the exemption – access to the social security contribution relief to employers who have obtained the gender equality certification after 31 December 2022.
Lastly, it should be noted that the Ministry of Labour, in its press release of 28 November, announced the ministerial decree of 20 October 2022, which defines the criteria and procedures for granting the social security contribution exemption for private employers who achieve the gender equality certification introduced into our system by Law No. 162/2021.
This is a voluntary certification that the most virtuous companies can apply for, and obtaining it brings with it a series of benefits, including: relief from social security contributions of no more than 1% and up to a maximum of €50,000.00/year for each company; advantageous criteria in the case of tenders; possibility of access to a bonus score for the evaluation, by national and regional European funds authorities, of project proposals for the granting of State aid to co-finance the investments made.
