Interventions

Pay transparency: ever closer obligations for companies

The goal of equal pay for male and female workers in the European Union is unquestionably far away, but ever closer is the regime of obligations and protections that all member states will have to introduce to further approach this goal

3' min read

3' min read

The goal of equal pay for male and female workers in the European Union is unquestionably far away, but ever closer is the regime of obligations and protections that all member states will have to introduce in order to further approach this goal.

EU Directive No. 2023/970 of 10 May 2023, in fact, provides for the establishment of precise obligations to ensure greater pay transparency, on the assumption that the availability of clear information will enable workers and trade unions to take the necessary action to correct any unequal situations.

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To date, Italy has not yet transposed the content of this directive and has time to do so until 7 June 2026, as it is also expected that certain precise obligations will be introduced with a longer timeframe and differentiated according to company size.

Although seemingly distant, the appointment with the new regulations is in fact close and disruptive: in a time span of no more than two years from now, companies will have to be ready to adopt new ways of managing not only the pre-employment phase (e.g., having to disclose salary levels as early as job posting), but also and above all the salary and career mechanisms. The challenge to be overcome will be to clearly explain what the objective criteria are that justify different pay levels in the company.

Easy to say, sophisticated to do. Firstly, the directive moves the ambition of equality up a notch by defining the concept of 'pay' in such a way that the measure companies will be asked to weigh themselves against will be that of the total reward system and certainly not the easier one of the RAL.

The remuneration systems adopted in companies must then ensure the equality of this articulated remuneration for the same work or for work of equal value, i.e. comparable according to non-discriminatory, objective and gender-neutral criteria. Companies, therefore, have the arduous task of introducing clear comparison mechanisms that take into account - among other things - skills, commitment, responsibilities and working conditions.

Of all this comparative effort, the first recipients will be the workers themselves, who will have to be informed annually about their right to access information on pay.

Trade unions will then be entrusted with the role of leading players in the joint assessment of pay in companies, in the event that a gender-pay gap of at least 5 per cent is identified that is not adequately justified by objective and neutral criteria. This joint assessment, which will require employers to go into the merits of their pay choices and the measures taken and to be taken to ensure fairness, will guide the company's subsequent actions and will be communicated to the competent authorities, including the labour inspectorate.

Obviously, it is naive not to expect that a gender pay gap thus photographed will make it easier for employees who feel they have suffered unfair discrimination to take individual action for compensation for the damage suffered.

Precisely around the issue of compensation and the protection of rights in general, then, revolves a set of innovations that will in all likelihood give claims on equal pay for gender, which are currently sparse, a central and indispensable role. It is worth mentioning that actions will be able to be brought not only by individual workers, but also by trade unions, associations and equality bodies, which, in the event of violations, will be able to obtain a measure to put an end to and remedy the violations, as well as to compensate the damage suffered by each employee. It is important in this regard to mention how the burden of proof, typically borne by those claiming the existence of discrimination, will be with the new rules mostly on employers.

So however far away 2026 may seem and public attention does not do justice to the complexity that companies will have to navigate, it is necessary to be clear: the coming months and years are crucial for employers to prepare for the appointment with transparency in a way that reduces not only the risk of major litigation, but also that of the inevitable media and reputational repercussions.

In order not to fall behind schedule, the starting point is now and resides in the rigorous identification of criteria for determining salary levels and career paths according to the outline provided by the directive, which can well be understood with the lenses provided by the precedents of the international courts - and in particular the British courts - that have already well exemplified the concept of 'equal value' over the years.

*Lawyers, Baker McKenzie

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