Pay Transparency: what changes for companies with the transposition of EU Directive 2023/970 through Legislative Decree 96/2026

Two hands holding two stacks of coins of different heights—a symbolic image of the gender pay gap that EU Directive 2023/970 on pay transparency requires companies to measure and overcome.

Pay transparency is no longer a topic that concerns only Diversity & Inclusion policies or organizations that are particularly mature in terms of ESG. Today it represents a concrete challenge for all companies called upon to demonstrate that their pay systems are based on fair, objective, and non-discriminatory criteria.

With the transposition of EU Directive 2023/970, the principle of equal pay enters a new phase. It is no longer just about guaranteeing equal opportunities, but about being able to demonstrate them through transparent data, processes, policies, and evaluation criteria.

For many organizations, the question is no longer whether to comply, but how truly ready they are to face this change. Because the real challenge does not concern the reporting or communication of pay data, but the ability to build an organizational model that is coherent and defensible over time.

What Pay Transparency requires today

The European Pay Transparency Directive was created with the aim of strengthening the principle of equal pay between men and women for the same work or work of equal value.

To achieve this objective, it introduces tools that directly affect HR processes, pay policies, and corporate governance. The main pillars of the regulation concern:

• greater transparency in hiring;

• workers’ access to pay information;

• role evaluation and classification systems based on objective criteria;

• monitoring and reporting of pay differences;

• the obligation to take action in the presence of unjustified pay gaps exceeding 5%.

Many companies tend to focus exclusively on reporting obligations. In reality, the most significant change concerns the way salaries, raises, promotions, and career development paths are defined.

The regulation imposes a very simple but revolutionary principle: every pay difference must be explainable through objective, documentable criteria that are neutral with respect to gender.

What obligations for Italian companies

Even though the implementing framework will continue to evolve, the organizational impacts on businesses are already evident.

Greater transparency in selection processes

Companies must be able to communicate to candidates information about the pay level foreseen for the position or the relevant salary range.

This aspect represents a significant challenge for many organizations that, to date, do not have formalized salary ranges or consistent criteria for defining starting pay.

Behind the simple publication of a pay band lies the need to have a clear classification of roles, coherent positioning criteria, and structured governance of salary policies.

An end to the “previous salary” logic

One of the main objectives is to interrupt those mechanisms that can contribute to perpetuating pay inequalities.

For this reason, the salary earned in previous work experiences should not be the starting point for determining future pay; instead, criteria linked to the value of the role, the skills required, and the responsibilities assigned must prevail.

The right to information for workers

Employees will be able to request information about how their pay level compares to the category of equal value, and they must be able to access the criteria used by the organization to define pay and career progression.

For many companies this represents perhaps the most significant change: it is not enough to have correct policies—one must be able to explain and document them.

Reporting and monitoring of the gender pay gap

Organizations subject to reporting obligations will have to measure and monitor pay differences between men and women.

However, reporting represents only the final phase of the journey. Even before producing a figure, it is necessary to verify that the information is reliable, that roles are classified correctly, and that pay differences are actually justified.

How to measure and close the pay gap

When people talk about Pay Transparency, many companies immediately think of the gender pay gap.

In reality, the pay gap is often only the symptom of a deeper problem.

The real question that C-Level executives and HR Directors should ask themselves is: “Are we able to explain why two people are paid differently?”

If the answer is not immediate, the problem is probably not the pay gap, but the structure of the pay system.

Many pay differences stem from historical stratifications:

• individual negotiations;

• promotions handled at different times;

• mergers and acquisitions;

• pay policies that were never formalized;

• heterogeneous evaluation systems;

• different practices adopted by the various company functions.

The Directive does not require eliminating all pay differences. Instead, it asks that such differences can be justified on the basis of clear and measurable elements.

The central role of Job Architecture

One of the most innovative aspects of the regulation concerns the concept of “work of equal value.” The job title alone is not what counts.

Two apparently different roles can be considered equivalent if they require comparable levels of:

• skills;

• responsibility;

• autonomy;

• decision-making complexity;

• organizational impact.

For this reason, building a structured Job Architecture frequently represents the first step of any journey toward Pay Transparency.

Without a coherent classification of roles, it becomes extremely difficult to demonstrate the fairness of the pay system.

From the Gender Pay Gap to the Adjusted Pay Gap

Analyzing only the average differential between male and female pay risks producing an incomplete picture.

To understand where the real risks are concentrated, it is necessary to deepen the analysis by considering variables such as:

• professional level;

• seniority;

• company function;

• geographic location;

• responsibilities managed;

• the variable component of pay;

• bonuses and benefits.

This approach makes it possible to identify the Adjusted Pay Gap—that is, the portion of the pay difference that has no objective explanation and that could therefore generate risks from a regulatory, reputational, or litigation standpoint.

How the pay gap is closed

Contrary to what people think, reducing the pay gap does not mean indiscriminately increasing salaries.

In most cases, the interventions concern:

• reviewing pay policies;

• defining coherent salary ranges;

• introducing objective criteria for promotions and raises;

• updating performance management systems;

• strengthening HR governance.

The ultimate goal is not to standardize pay, but to build a system capable of explaining and supporting every decision.

The 5 questions every HR Director should ask themselves today

Even before talking about reporting and regulatory obligations, every organization should verify a few fundamental elements.

• Do we have an up-to-date Job Architecture?

• Are we able to correctly identify work of equal value?

• Are our pay bands formalized and documented?

• Can we objectively explain the main pay increases granted in recent years?

• Do we have reliable data to measure the pay gap?

If even a single one of these questions generates uncertainty, it is likely that the path toward full compliance will require a broader organizational intervention than expected.

The journey with Fiabilis

To support companies on the path toward Pay Transparency, Fiabilis draws on the expertise of Good Impact SB, a benefit corporation within the Group, accompanying organizations through a structured process that integrates data analysis, role evaluation, pay gap measurement, and the definition of pay models that are transparent, fair, and consistent with business objectives.

The process is divided into the following phases:

• Initial assessment: Analysis of pay policies, HR processes, and the main risk areas to evaluate the organization’s level of readiness with respect to the requirements introduced by Legislative Decree 96/2026.

• Audit of contractual classifications: Analysis of the job catalog in order to verify the appropriateness of the levels assigned relative to the job descriptions of the applicable collective bargaining agreements (CCNL).

• Data analysis and normalization: Collection, verification, and organization of the information needed to build a reliable database and support the subsequent pay analyses.

• Job Architecture and role evaluation: Mapping of company roles and identification of work of equal value through objective and documentable criteria, essential to ensuring a fair and transparent pay system.

• Pay Gap measurement: Analysis of the Gender Pay Gap and the Adjusted Pay Gap to identify any unjustified pay differences and understand their causes.

• Improvement plan: Definition of corrective actions, revision of pay policies, and construction of a compliance roadmap consistent with the company’s structure, objectives, and priorities.

The goal is not only to support regulatory compliance, but to help organizations build organizational and pay models that are more transparent, sustainable, and capable of strengthening attractiveness, engagement, internal trust, and competitiveness over the long term.