Italy: An Overview

Transparency, Fair Pay and the Digital Workplace: Italian Employment Law at a Turning Point

Rarely has a single season reshaped Italian employment law as profoundly as the spring of 2026: within weeks, Italy enacted its pay transparency regime implementing Directive (EU) 2023/970, converted into law a wide-ranging “Labour Decree” anchoring public hiring incentives to a statutory notion of “fair pay”, and moved closer to the transposition of the Platform Work Directive (EU) 2024/2831, due by 2 December 2026. Against a backdrop of modest growth and renewed collective bargaining activity, the direction of travel is unmistakable: pay structures, contingent workforce models and algorithmic management now sit at the very centre of Italian regulatory attention. For businesses operating in Italy, compliance has become a condition of market entry.

Pay transparency becomes law

Legislative Decree No 96 of 7 May 2026 (Official Gazette No 125 of 1 June 2026, in force since 7 June 2026) implements Directive (EU) 2023/970 on equal pay for equal work or work of equal value between men and women. It applies to all public and private employers and to all employment relationships, including executives, with limited exclusions (domestic and intermittent work).

Several obligations took immediate effect. Job postings must indicate the starting salary or the applicable pay range; employers – and any recruiter acting on their behalf – may no longer ask candidates about current or past remuneration; employees may obtain, in writing and within two months, information on average pay levels, broken down by sex, for categories performing the same work or work of equal value; and pay secrecy clauses are void. Employers with at least 100 employees are subject to periodic gender pay gap reporting, starting by 7 June 2027 for larger employers and, by 2031, for those with 100 to 149 employees. Where an unjustified average gap of at least 5% emerges within a category, a mandatory joint pay assessment with workers’ representatives is triggered. Remedies are channelled through Article 41 of the Equal Opportunities Code (Legislative Decree No 198/2006).

A distinctively Italian feature is the role assigned to collective bargaining: applying a national collective agreement signed by the comparatively most representative unions, including its job classification system, gives rise to a presumption of conformity with equal pay principles, rebuttable where individual discriminatory treatment is proven. The practical agenda is demanding: mapping “categories of workers”, auditing pay architectures, redesigning recruitment scripts and building privacy-compliant processes for information requests. Employers who treat the exercise as governance, rather than box-ticking, will be best placed when the first reporting deadline arrives.

“Fair pay” and the new incentive architecture

Law Decree No 62 of 30 April 2026, converted with amendments by Law No 112 of 25 June 2026, is the second pillar of the season. The so-called Labour Decree 2026 ties access to the new hiring incentives – for women, young workers, employers in the Southern Special Economic Zone and the stabilisation of fixed-term relationships – to a statutory benchmark of “fair pay” (salario giusto): the worker’s overall economic treatment must not fall below that set by the collective agreements signed by the comparatively most representative organisations in the sector. The measure is openly designed to combat contractual dumping by so-called pirate collective agreements, and reads the constitutional guarantee of proportionate and sufficient remuneration (Article 36 of the Constitution) through the lens of leading sectoral bargaining.

The conversion law added further points for workforce planners: until 31 December 2029, secondments backed by a collective agreement are permitted even in the absence of the seconding employer’s own interest, where aimed at safeguarding employment; agency work missions with the same user are capped, by default, at 36 months; and extracurricular traineeships within the same corporate group are limited to 12 months. The decree also inaugurates a set of measures against so-called digital gangmastering

(caporalato digitale), including rules on the qualification of work intermediated by digital platforms and new mandatory communications.

Platform work: the next frontier

The transposition of Directive (EU) 2024/2831 on platform work, due by 2 December 2026, will be the defining project of the coming year. The delegation criteria are already on the statute book: Article 11 of Law No 91/2025 (European Delegation Law 2024) instructs the government to rewrite Chapter V-bis of Legislative Decree No 81/2015, introduce a legal presumption of employment status where facts indicating direction and control are found – reversing the burden of proof onto the platform – and regulate automated monitoring and decision-making systems, including human oversight and data protection safeguards. Platform and gig businesses, but also traditional employers deploying algorithmic scheduling and performance tools, should scenario-plan now rather than await the implementing decree.

The EOR/PEO mirage

One recurring hurdle deserves candour. Multinationals are increasingly marketed “Employer of Record” or “PEO” solutions promising to hire workforce in Italy within days, without a local entity. Under Italian law the model has no autonomous legal recognition: the only lawful scheme in which an entity employs staff who work under the direction and for the exclusive benefit of another is staff supply (somministrazione di lavoro, Articles 30-40 of Legislative Decree No 81/2015), reserved to agencies authorised by the Ministry of Labour and enrolled in the dedicated register (Articles 4-5 of Legislative Decree No 276/2003).

An unauthorised EOR arrangement risks being requalified as unlawful supply of labour: a conduct that Law Decree No 19/2024, converted by Law No 56/2024, has returned to the criminal sphere with per-worker, per-day fines striking both provider and user. The user company further faces the worker’s claim to a direct, retroactive employment relationship, back pay and social security contributions, joint liability and, for foreign principals whose personnel negotiate or conclude contracts in Italy, permanent establishment exposure. The reliable routes remain authorised staffing agencies, genuine contracting or secondment structures, or a local employing entity: slower on paper, far cheaper in practice.

Artificial intelligence, HR and the human core of employment law

Artificial intelligence is transforming both the workplace and the practice of employment law. The EU AI Act (Regulation (EU) 2024/1689) classifies most employment-related AI uses – recruitment, task allocation, monitoring, evaluation – as high-risk, while Law No 132/2025 gives Italy a national AI framework that, notably, imposes disclosure duties on lawyers using automated systems in advice or representation. Employers, for their part, already owe transparency obligations on automated decision-making systems under Article 1-bis of Legislative Decree No 152/1997.

For HR departments, AI is simultaneously a productivity tool and a compliance risk; clients increasingly expect their employment counsel to master both dimensions, and large language models will absorb an ever-larger share of research, drafting and document review. Yet the employment relationship remains, at its core, a human relationship. Dismissals, restructurings, harassment investigations and union negotiations engage trust, judgement, empathy and professional accountability, qualities no model can supply. AI will handle what is searchable; lawyers, what is human. Those who combine the two will define the market.

Outlook

2026 will be remembered as the year Italian employment law placed transparency and fairness at the heart of the employer’s compliance strategies. Businesses that audit their pay structures now, stress-test their contingent workforce models and govern their algorithms deliberately will find in the new framework not only risk, but a genuine competitive and reputational advantage.