How to comply with the Pay Transparency Directive: a checklist for businesses

In summary

• Key actions: scope, comparable roles, neutral criteria, gap measurement, information for candidates and employees.
• Legislative Decree 96/2026, which came into force on 7 June 2026, transposes Directive (EU) 2023/970.
• Organisations with at least 100 employees must also report their gender pay gap; those with at least 150 employees must do so for the first time by 7 June 2027.

To understand how comply with the Pay Transparency Directive, it is advisable to proceed methodically: scope, roles, criteria, gap analysis, information and reports. This guide, intended for HR Compensation & Benefits managers, HR administrators and employment consultants, summarises obligations, differences by company size, checklist An 8-step guide and transition plan for compliance with pay transparency requirements.

Pay transparency: what companies must do under the directive and decree

Under pay transparency regulations, companies must ensure that pay is justifiable: this involves objective and neutral criteria, providing information to candidates and employees, and, above a certain size threshold, data on the gender pay gap. There is much talk of pay transparency, but the concept refers specifically to the legislation on pay transparency.

Directive (EU) 2023/970, the “Pay Transparency Directive“, lays down common rules for Member States; Legislative Decree 96/2026 transposes it into Italian law and constitutes the “Wage Transparency Act”, with reference to the National Collective Labour Agreement (CCNL). The main obligations are:

Obligation	What does it involve?	Reference: Legislative Decree 96/2026
Objective and neutral criteria	Gender-neutral classification and pay	Article 4
Pre-recruitment transparency	Starting salary or pay band; prohibition on enquiring about previous salary history	Article 5
Transparent remuneration criteria	Remuneration and career progression criteria known to employees	Article 6
Right to information	A response within two months, broken down by individual and average figures by gender	Article 7
Disclosure of the gap	Gender pay gap indicators, for organisations with 100 or more employees	Article 9
Joint assessment	In the case of representatives, if the gap ≥5% is neither justified nor correct	Article 10

The deadline for the first report on the gender pay gap is 7 June 2027 for organisations with at least 150 employees (Article 9). In the case of established discrimination, Article 13 refers to Article 41 of the Equal Opportunities Code (Legislative Decree 198/2006).

To generate this data on an ongoing basis, you can use a pay transparency software.

Pay transparency and SMEs: how the rules vary depending on the size of the company

Pay transparency also applies to SMEs: some requirements apply to all, whilst others apply only once a certain number of employees is reached.

Obligation	Who is involved
Neutral criteria, pre-recruitment transparency, right to information	All employers (Articles 4, 5 and 7)
Transparent remuneration criteria	All; non-mandatory criteria for pay progression for organisations with fewer than 50 employees (Article 6)
Report on the pay gap	At least 100 employees (Article 9)

On pay transparency in small and medium-sized enterprises The main difference lies in reporting; in an SME with a small workforce, HR and poorly structured data, it may be advisable to start with steps 1, 4 and 7 of the checklist.

Pay transparency checklist: 8 steps to compliance

This checklist The guide on pay transparency summarises how to comply with the Pay Transparency Directive in eight steps, in the recommended order.

Step 1: scope, staff and pay components

The first step is to determine who and what are included in the comparison:

• This covers fixed-term and permanent employment, including part-time and managerial roles, excluding domestic and casual work (Article 2).
• Remuneration comprises basic pay and all sums paid, including those in kind (Article 3).
•  This is handled by HR, HR and IT.

Step 2: Classifying and weighting the positions

To compare salaries, the positions must be comparable.

• Job evaluation is the method of weighting each role against predefined criteria;
• The job architecture organises them into families and levels.
• This is handled by HR and Compensation & Benefits.

Step 3: categories of equal value

• Equal value forms the basis of any comparison: work of equal value refers to a different role involving comparable duties in accordance with the pay grades set out in the National Collective Labour Agreement (Legislative Decree 96/2026, Article 4);
• The Directive takes into account skills, commitment, responsibilities and working conditions (Directive 2023/970, Article 4). The contractual level alone may not be sufficient for tasks of a different nature.
• This is handled by HR and a labour consultant.

Step 4: criteria for determining remuneration

Any pay gap must be able to be explained:

• Starting pay, pay rises and career progression are based on objective, gender-neutral criteria that are documented and can be communicated. Where a national collective agreement has been signed by the organisations with the highest level of representation, reference to the agreement may make these criteria accessible (Article 6);
• Business processes must be documented.
• This is handled by Compensation & Benefits and the HR department.

Step 5: the gender pay gap and required metrics

HR and Payroll calculate the indicators referred to in Article 9:

• Average gap: the percentage difference between the average pay levels of women and men.
• Median gap: the same comparison of the central values.
• Variable components: the same disparities in terms of premiums and supplementary benefits, and the proportion of recipients by gender.
• Quartiles: the proportion of women and men in each of the four pay bands.

Step 6: Causes of the gap and corrective measures

A figure does not indicate where the gap comes from:

• Oaxaca-Blinder is a statistical method that breaks down the pay gap into explained and unexplained components: the latter is an area requiring further investigation, not evidence of discrimination. The compa ratio is the ratio of an individual’s pay to the position benchmark.
• An average category gap of at least 5%, which is neither justified nor rectified within six months, requires corrective measures to be taken as part of the joint assessment (Article 10).
• This is handled by the Compensation & Benefits team and senior management.

Step 7: Processes relating to candidates and employees

Transparency also applies to day-to-day processes:

• Job advertisements state the starting salary or salary range, and candidates are not asked about their previous salary during interviews (Article 5).
• Employees’ requests must be responded to within two months, and they must be informed of this right each year (Article 7).
•  This is handled by talent acquisition, HR and line managers.

Step 8: Data protection and reporting

The final step brings everything together privacy and reporting:

• The information set out in Articles 7, 9 and 10 complies with the GDPR (Article 11) and, in categories with few employees, is aggregated so that individuals cannot be identified.
• The indicators set out in Article 9, which have been confirmed following consultation with the representatives, are submitted to the monitoring body.
• This is handled by HR, the DPO and IT.

Transition plan for pay transparency: the stages of the adjustment

A transition plan for pay transparency sets out the eight steps in phases: it is an internal plan, not a legal requirement. It serves as a multi-year roadmap for compliance with pay transparency requirements, as the pay gap must be disclosed annually for organisations with 250 or more employees and every three years for those with between 100 and 249 employees (Legislative Decree 96/2026, Article 9): the timetable for compliance is based on these deadlines.

Stage	Steps in the checklist	Functions involved
Diagnosis	1–3	HR, HR management, IT, employment consultant
Analysis	4–6	Compensation & Benefits, Management
Processes and reports	7–8	HR, talent acquisition, data protection officer, employee representatives (Articles 9 and 10)
Monitoring	All	HR and direction

When you need software to comply with pay transparency requirements

In cases where you have information and data from multiple systems, scenarios to simulate and calculations that need to be reproducible, a a specific tool for pay transparency which measures and explains the gap, simulates the corrective actions and estimates the cost. The decisions and compliance remain the responsibility of the company.

Frequently Asked Questions

Does pay transparency also apply to fixed-term, part-time and agency contracts?

Yes, for fixed-term and part-time contracts: Legislative Decree 96/2026 applies to fixed-term and permanent employment, including managerial roles (Article 2). Domestic and casual work are excluded. Temporary agency work is not specifically mentioned: it is advisable to check the relevant provisions with an employment adviser.

Is simply applying the National Collective Labour Agreement enough to ensure compliance with pay transparency requirements?

No, not for all obligations. Referring to the National Collective Labour Agreement (CCNL) may fulfil the obligation to make remuneration criteria accessible (Article 6). The right to information (Article 7), the pay gap report (Article 9) and the components decided at company level still need to be addressed.

Should employee representatives be involved in the process of implementing pay transparency?

Yes, in two cases. The employer confirms the accuracy of the pay gap data after reviewing it (Article 9). If a pay gap of at least 5% is neither justified nor rectified within six months, the employer carries out a joint pay review with the employees (Art. 10).

From the checklist to the analysis

We can show you how Alveria Pay Transparency supports the measurement, analysis and documentation of the pay gap in your data.

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