Over time, many organisations have structured their remuneration systems around established practices, individual negotiations and managerial discretion. That approach is no longer sustainable.
EU Directive 2023/970 on equal pay introduces an individual right enabling employees to request comparative pay information. Every remuneration decision must therefore be consistent, documented and defensible. This is not a formal compliance exercise. It is a structural shift in the governance of compensation policies and human capital management.
From equality principle to enforceable individual right
The draft implementing decree of EU Directive 2023/970, approved in preliminary review on 5 February 2026, transforms the principle of equal pay into a right that can be exercised by each employee.
Any employee may request information on the average remuneration of men and women performing the same work or work of equal value. The employer must provide aggregated data and demonstrate that any pay differentials are based on objective and gender-neutral criteria.
The focus moves from policy declarations to evidentiary substantiation.
Impact on corporate organisation and HR processes
The reform affects internal governance, recruitment procedures, pay-setting mechanisms and documentation standards.
Transparency in job postings and recruitment
- Job advertisements must indicate the salary or salary range applicable to the role.
- Employers are prohibited from requesting or relying on a candidate’s salary history.
- Recruitment practices must not generate unjustified pay discrepancies between comparable roles.
- Compensation benchmarking and offer-setting processes must therefore be structured and traceable.
Right of access and internal data governance
- Employees are entitled to access average remuneration data, broken down by gender, for comparable roles.
- Employers must implement procedures to collect, analyse and communicate this information accurately and within defined timeframes.
- The absence of a structured data framework increases exposure to disputes and inspections.
Objective and neutral remuneration criteria
- Remuneration policies must rely on objective, verifiable and gender-neutral criteria.
- Skills, responsibilities, role complexity, working conditions and performance indicators must be formally defined and consistently applied.
- Undocumented managerial discretion constitutes a legal and organisational vulnerability.
Reporting obligations based on company size
The Directive introduces differentiated reporting requirements:
- Companies with at least 250 employees – annual gender pay report.
- Companies with 150 to 249 employees – report every three years.
- Companies with 100 to 149 employees – triennial report following a transitional period.
- Companies with fewer than 100 employees – no automatic reporting obligation, but full application of the employee’s individual right of access.
Smaller organisations are not insulated from risk. An employee may exercise the right of access even where the company is not required to issue a formal gender pay report.
The 5% threshold and operational consequences
A key indicator to monitor is a gender pay gap exceeding 5% for comparable work, where such a gap cannot be objectively justified.
In such cases, the employer must provide detailed explanations and engage with trade unions, the National Labour Inspectorate and equality bodies. The company must also define and implement concrete corrective measures.
The issue is not merely statistical. The company must be able to demonstrate, through documented criteria and decision-making records, why two individuals performing comparable work receive different remuneration.
Where a pay gap emerges, the burden shifts to the employer. In the absence of formalised criteria and traceability of decisions, the differential becomes difficult to defend.
Remuneration governance: role mapping and internal consistency
Pay transparency is the outcome of a coherent organisational framework.
A defensible remuneration structure requires:
- a clear and updated mapping of roles and responsibilities;
- classification aligned with applicable collective agreements;
- formalised evaluation and grading criteria;
- consistency between internal policies and actual HR practices;
- documented justification of individual decisions concerning salary adjustments, bonuses and promotions.
Without a robust organisational architecture and structured remuneration governance, responding to an individual request may escalate into structured litigation or regulatory scrutiny.
When the request is filed, the room for adjustment narrows
An individual request may trigger inspections and formal engagement with social partners. At that stage, structural corrections become significantly more complex and costly.
The distinction between preventive alignment and reactive defence directly affects legal exposure, financial impact, corporate reputation and internal stability. A proactive review of remuneration systems reduces sanction risk and strengthens overall HR governance.
For further information
The integrated team of Bacciardi Partners and Macrelli e Bartolini Associati supports companies in this transition by combining organisational design, labour advisory and legal oversight. The objective is to transform a regulatory obligation into a structured and sustainable governance model.
For an assessment of your current remuneration framework and the related compliance path, please contact us.
Avv. Lorenzo Bacciardi – CEO, Bacciardi Partners
Dott.ssa Antonella Lanzani – Head of Organization & People, Bacciardi Partners
Dott.ssa Romina Macrelli – Founding Partner, Macrelli e Bartolini Associati
Dott. Paolo Bartolini – Partner, Macrelli e Bartolini Associati