Gender pay gap: EU directive gives rise to new employer obligations (Norme & Tributi Plus Lavoro – Il Sole 24 Ore – 18 December 2023 – Enrico De Luca, Stefania Raviele)

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.