EU Directive 2023/970: gender pay gap and disclosure on employees’ remuneration

Edited by Francesca Tironi, Giulia Spalazzi, Lorenzo Vassalli

This past May 10th, 2023, the European Parliament and Council approved the final version of the EU Directive no. 2023/970, which aims at strengthening the application of the principle of equal pay for men and women for equal work, or work of equal value, through pay transparency and related enforcement mechanisms. This Directive, which was published in the EU Official Gazette on May 17th, 2023 and entered into force 20 days after that date, is not directly applicable, as it is addressed to the EU Member States (Italy included), which will have to comply with it by June 7th, 2026.

The Directive under examination lays down minimum prescriptions aimed at strengthening the principle of equal pay – to be intended as equal pay for equal work, or work of equal value, between men and women – especially through pay transparency and the strengthening of the related enforcement mechanisms. In essence, it implies that:

  • all employees, under the same conditions and subject to proven individual reasons (e.g. greater experience and/or qualifications, etc.), must earn the same wages; and
  • information must be provided that demonstrates the above-mentioned equal pay in these situations.

Therefore, the Directive is not limited to equal pay, but rather goes so far as to impose pay transparency even prior to the recruitment of new staff, who will be entitled to receive, at the pre-employment negotiation stage, information on the starting salary or on the relevant salary range for the position in question, on the basis of objective and gender-neutral criteria and, where appropriate, on the provisions of the collective agreement applied by the employer in relation to the position. The Directive also prohibits the employer from asking candidates for information on the salaries received at the time of the interview or in previous employment relationships and, at the same time, prohibits employers from drafting contractual clauses limiting the employees’ ability to disclose information on their salary.

Remuneration of employees during the employment relationship

The Directive also takes a position with regard to the remuneration of employees already on the payroll by providing that the criteria used to determine the remuneration, pay levels and economic progression of employees must be made accessible to employees. With regard to economic progression, it should be specified that the Italian legislator will be free to exempt employers with fewer than 50 employees when transposing the Directive.

In addition to that, existing employees will be entitled to request and receive in writing information on their individual wage level and on the average wage levels, broken down by gender, of categories of employees performing the same job or a job of equal value: in the event of inaccurate or incomplete information being provided to them, employees will have the right to request, personally or through their representatives, clarifications and further details regarding the data provided and to receive, within two months, a motivated reply. Of course, the privacy of individual employees remains protected, since such earnings data cannot be requested or communicated by the company on a personal basis.

Information notice obligations on equal pay for men and women

National laws transposing the Directive will have to include an obligation for employers to provide notices to employees and their representatives, as well as to mandated bodies of the State, on (i) gender pay gap; (ii) gender pay gap in complementary or variable components; (iii) average gender pay gap; (iv) average gender pay gap in complementary or variable components; (v) percentage of female and male employees receiving complementary or variable components; (vi) percentage of female and male employees in each pay quartile; (vii) gender pay gap by categories of employees, broken down by normal basic pay or salary and complementary or variable components.

The Directive also imposes deadlines for employers to provide the above information, differentiated according to the size of the workforce employed:

  • employers with at least 250 employees will have to fulfil these notice obligations by 7 June 2027, and every year thereafter;
  • employers having between 150 and 249 employees will have to fulfil said notice obligations by 7 June 2027, and every 3 years thereafter;
  • – employers having between 100 and 149 employees will have to fulfil said notice obligations by 7 June 2031, and every 3 years thereafter.

It is specified that the Directive does not take a position on employers with a company population of less than 100 employees, who will therefore be able to either send this information on a voluntary basis or be included in those obliged by national laws.

Final remarks in the field of damages compensation and public procurements

To conclude, we would like to point out two further novelties provided for in this Directive:

  • employees who have suffered damages as a result of the violation of one of their rights or an obligation related to the principle of equal pay will be entitled to claim and obtain full compensation, and there will be a full-fledged reversal of the burden of proof in such cases, as it will be the employer who is called upon to defend himself by proving evidence of the absence of discrimination, instead of the employee having to prove his position;
  • with regard to public procurements and concessions, the Directive provides for an obligation to verify that the companies involved in the same effectively do respect the equal pay principle.

For a more in-depth discussion please get in touch with:

Francesca Tironi

PwC TLS Avvocati e Commercialisti


Giulia Spalazzi

PwC TLS Avvocati e Commercialisti