With the transposition of Directive (EU) 2023/970 through Legislative Decree No. 96 of May 7, 2026, which entered into force on June 7, 2026, pay transparency has become part of Italy’s legal framework.
The legislation introduces new rights for employees, strengthens employers’ transparency obligations, and establishes more robust monitoring mechanisms to address the gender pay gap. Yet its real impact goes beyond compliance. It challenges organizations to rethink how they define, recognize, and reward work.
Pay transparency is not simply about sharing more information. It requires organizations to demonstrate that compensation decisions are based on objective criteria and applied consistently.
The Guiding Principle: Equal Pay for Work of Equal Value
At the core of the legislation is the principle of equal pay for the same work or for work of equal value.
The distinction matters. The objective is not to standardize compensation, but to ensure that any differences are justified by objective, gender-neutral criteria.
For many organizations, this requires a significant shift in perspective. Compensation policies often evolve over time through individual negotiations, changing business needs, and market dynamics. They must now be supported by clear, documented criteria.
In practical terms, every organization should be able to answer one fundamental question: Why is one role worth more than another?
What Will Change for Organizations?
The decree introduces new requirements that affect the entire employee lifecycle.
Key measures include:
- Requiring employers to disclose the starting salary or salary range in job advertisements or, at the latest, before the interview
- Prohibiting employers from asking candidates about compensation received in previous employment
- Giving employees the right to access average pay levels, broken down by gender, for the same or equivalent roles
- Requiring transparent criteria for determining compensation and salary progression
- Introducing periodic pay reporting obligations for organizations that exceed the thresholds established by the legislation
Where reporting identifies an average gender pay gap of 5% or more within a specific employee category that cannot be justified by objective, gender-neutral criteria, employers must also carry out a joint pay assessment with employee representatives.
Transparency does not create new responsibilities. It makes existing responsibilities measurable and accountable.
Job Architecture Becomes a Governance Priority
Pay transparency cannot be addressed simply by updating policies and documentation.
Before reviewing compensation structures, many organizations will first need to revisit how roles are designed and evaluated.
Organizations should be able to answer questions such as:
- How are responsibilities defined?
- Which competencies distinguish one role from another?
- What criteria determine salary progression?
- Why are similar roles assigned to different pay grades?
Answering these questions consistently requires a robust Job Architecture, where Job Evaluation, Job Grading, and Compensation become strategic governance tools, not simply HR processes.
Once the value of each role has been established through structured methodologies and shared criteria, pay transparency becomes the natural outcome of a well-designed organization.
An Organizational Transformation
Successfully implementing pay transparency requires organizations to rethink their entire approach to people management.
An effective transformation typically includes:
- Assessing the existing compensation framework and identifying potential gaps
- Building or updating the Job Architecture through structured Job Evaluation methodologies
- Establishing coherent Job Grading structures and salary ranges
- Aligning recruiting, performance management, career development, and compensation policies
- Implementing monitoring and reporting processes that meet regulatory requirements
- Supporting managers and HR leaders in applying the new criteria consistently
Pay transparency is not solely an HR responsibility. It also involves leadership, corporate governance, and, more broadly, the way decisions about people are made across the organization.
Compliance Is Only the Beginning
Every regulatory change initially requires organizations to adapt. Over time, however, the most successful organizations turn compliance into an opportunity to strengthen the business.
Pay transparency can enhance employer attractiveness, strengthen employer reputation, and increase the credibility of career development opportunities. Its value, however, extends well beyond meeting regulatory requirements.
When compensation criteria, career pathways, and decision-making processes are transparent and consistently applied, trust grows, perceptions of fairness improve, and employee engagement increases. Communication also becomes a strategic tool, strengthening the relationship between organizations and their people while fostering the mutual trust that underpins engagement and supports one of HR’s core objectives.
Compliance is only the beginning. Organizations that embrace pay transparency as an opportunity to strengthen governance, accountability, and trust will be better positioned not only to meet regulatory requirements, but also to build fairer, more resilient, and more sustainable people management systems over the long term.
