EU Directive 970/2023 requires companies to adopt concrete measures to guarantee equal pay between men and women, setting strict requirements for pay transparency and protection against salary discrimination.
But what does this mean for companies and workers in practice?
One of the key novelties concerns the obligation for candidates to receive, before being hired, clear and detailed information about the initial salary or salary range for the offered position. This information must be gender-neutral, in order to prevent any form of discrimination. Additionally, employers are prohibited from asking candidates about their previous salaries, to avoid past salary experiences unfairly influencing the salary offer.
Furthermore, employers must ensure full transparency regarding the criteria used to determine salaries and define salary progression pathways. Every worker should be able to understand how their salary is set and how it may evolve over time. However, EU member states may exempt employers with fewer than 50 employees from the obligation to provide accessible criteria for salary progression. This exemption does not apply to the obligation to provide information about individual and average salary levels, which remains applicable to all companies.
The new rules apply to all companies, but the reporting obligations vary based on company size: companies with more than 250 employees must comply by June 7, 2027, while those with more than 100 employees must comply by June 7, 2031.
In cases of salary discrimination, the EU Directive provides that employees can take legal action. Specifically, if a worker believes they have been discriminated against compared to colleagues of the opposite sex, they can take legal action, and the burden of proof is on the employer to demonstrate no discrimination occurred. If discrimination is found, the worker is entitled to full compensation for lost wages, potential bonuses, and, in some cases, moral damages.
Another crucial aspect concerns the penalties foreseen by the Directive: EU member states are required to introduce measures that are effective, proportionate, and deterrent. Companies that fail to comply risk facing penalties, which may increase in the case of repeated non-compliance. Therefore, it is essential for companies to comply with the Directive promptly to avoid legal consequences and reputational damage
Finally, the Directive promotes social dialogue between companies and social partners to actively collaborate in reducing salary discrimination.
Companies have until June 7, 2026 to comply with the EU Directive, but acting in advance is essential to avoid penalties and to benefit from a more equitable work environment.
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On April 11, Vittorio De Luca will attend as a panelist at the Annual IBA Employment and Diversity Law Conference 2024 during the panel entitled: “Panel: Breakout session one: Legal obligations in a borderless workplace”.A) for the Annual IBA Employment and Diversity Law Conference 2024.
FOCUS
The rise of digital nomads, satellite employees and Employers of Record (EORs) are reshaping the employment landscape.
How can global employers best deal with the legal and managerial challenges related to people working from various jurisdictions?
These are the main items which will be discussed – under a labour law perspective – by Vittorio De Luca
together with a panel of seasoned Employment Law practitioners during the session “Legal obligations in a borderless workplace” organized tomorrow by International Bar Association (IBA) for the Annual IBA Employment and Diversity Law
Conference 2024.
Click on this link to find out more about the event.
Italian Decree-Law no. 19 of 2 March 2024 (‘DL PNRR-bis’), in force from that date, introduced important changes to the employment sector, particularly regarding contracting-out and employment agency entities.
The most important changes are summarised below:
Contracting-out thresholds: contractors and subcontractors must pay personnel employed under the contract overall remuneration that is not lower than that provided for by the national and local collective bargaining agreements that predominantly apply in the area and in the sector related to the contracted-out activities.
Joint and several liability under the contract: joint and several compensation liability for the user is extended and extends to unlawful agency work, contracting-out and secondments.
Undeclared work: the fines for employers who employ undeclared workers have increased by 30%.
Sanctions for unlawful contracting-out and/or agency: introduction of a criminal sanction of imprisonment for up to one month or a fine of EUR 60 in the event of an irregular contract, or for each employed worker and for each day of employment. In the event of a ‘recidivism’ (i.e. if in the previous three years the employer has already been the recipient of criminal sanctions for the same offences) the fine is increased to EUR 72.
Tightening of sanctions for fraud: if the employer’s evasion of legal regulations or collective bargaining agreements is intentional, the sanction of imprisonment up to three months or a fine of EUR 100 is applied for each employed worker and for each day of work.
Licences for construction sites: from 1 October 2024, businesses and self-employed workers operating on temporary or mobile construction sites will be required to have a “licence”. The applicant must satisfy the following requirements: registration with the Chamber of commerce, industry and crafts; the training obligations provided for in Article 37 of Italian Legislative Decree no. 81/2008 applicable to employers, executives, managers and workers; hold a valid Certificate of Contributions Compliance (Documento Unico di Regolarità Contributiva, ‘DURC’); hold a Risk Assessment Document; hold a Certificate of Tax Compliance.
Agricultural businesses and seasonal work: tightening of sanctions so that if the limit of 45 days per year of “casual and temporary employment agricultural work” is exceeded, the employment contract is transformed into a full-time contract.
Compliance list: if, as a result of inspections relating to employment and social legislation, no breaches or irregularities emerge, the Italian National Labour Inspectorate (Ispettorato Nazionale del Lavoro, ‘INL’), issues a certificate and register the company in an on-line list called the “INL compliance list”. For 12 months from the registration date employers will not be subject to further checks in the matters subject to the investigations, while in the event of breaches or irregularities established through evidence subsequently obtained by supervisory bodies, INL will remove the employer from the list.
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With judgment no. 2859 of 31 January 2024, the Italian Supreme Court dealt with the issue of disciplinary dismissal and its consequences in the event of a violation of the procedures established by law. In the case in question, the company, in applying the dismissal measure against the employee, had not respected the procedure envisaged by Article 53 of Royal Decree no. 148/1931, failing to convene the worker prior to dismissal to allow him to submit justifications in his defence. The Court of Appeal of Palermo, hearing the matter, had attributed the defect to the scope of paragraph 6 of Art. 18, ordering only the payment of compensation. The Supreme Court, on the other hand, established that the violation of this rule entails the invalidity of the disciplinary measure, with such invalidity deriving from the violation of a rule imposed to protect an interest worthy of protection, such as that of the worker’s defence. Therefore, in the Court’s opinion, the worker is entitled to the real protection envisaged by Article 18, paragraphs 1 and 2 of Italian Law no. 300 of 1970, namely the right to reinstatement in the job and to payment of remuneration in arrears and payment of social security contributions since the date of dismissal.
On 19 February, Assogrocery and the trade unions NIdiL, CGIL, FeLSA, CISL and UILTemp signed a collective agreement that grants protection for “shoppers”, i.e. collaborators who prepare and deliver shopping to customers’ homes using the client companies’ digital platforms.
The agreement implements the provisions of Article 2, paragraph 2 of Italian Legislative Decree no. 81/2015, which applies to so-called “principal-organised” (“etero-organizzate”) collaborators, which explicitly exclude the automatic application of subordinate employment legislation in the presence of collective agreements that provide for specific economic protections for collaborators.
The agreement provides that the “shoppers” remain self-employed to the extent that they are granted the possibility of freely choosing when to carry out the work, choosing the slots indicated by the platform and also being able to withdraw their availability.
From a financial point of view, among the most important measures, there is the recognition of a minimum remuneration of EUR 12.50 per assignment (lasting one hour) and an availability allowance of EUR 1.30 with guaranteed increases for Sunday and holiday work.
The agreement also provides specific protection for illness, which takes the form of the suspension of the account and the payment of a daily allowance upon the occurrence of specific events, as well as maternity protection, for which financial compensation is provided and the maintenance of the collaboration relationship through the suspension of the account.
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Set out below is an extract from an article by Vittorio De Luca, interviewed by Antonio Ranalli of Italia Oggi, on the topic of AI within law firms.
“Below is the extract from the interview with Vittorio De Luca for Italia Oggi Sette. “For many years it has been common practice to recognise law firms with awards of various kinds, but only recently have awards appeared for “the most innovative firm”, “the most digital firm” etc.”, says Vittorio De Luca & Partners’ managing partner. “As reported in a recent article in the Financial Times, “lawyers… often tend to underestimate the impact or potential impact of technology”, while the need to adopt and use digital tools appears increasingly evident to this writer.
Despite a certain scepticism, however, firms must and are adapting to the new trend and the possibilities that the digital world offers. In this context, De Luca & Partners is no exception, and for many years the budget dedicated to investment in technology, knowledge management (via the KenDL platform) and management of automation systems has been particularly significant. Undoubtedly, this new way of understanding the firms’ operations also requires an investment in training in the use of technology. Furthermore, particular attention is paid to sustainability, diversity and inclusion, to equal opportunities and protection of parenthood and the work-life balance. The adoption of so-called “ESG” strategies is becoming a necessity and steers business model of many companies. In recent years, the exponential growth in focus on sustainability in the broadest sense of the term has taken hold even among the most successful law firms that have created support mechanisms, offering the possibility of remote working and proposing specific solutions to ensure a healthy balance between work and private life”.
Continue reading the full version on Italia Oggi Sette.
There is no law in the Italian legal system establishing a legal minimum wage. In fact, the parameters for ‘fair’ pay are defined by the Italian Constitutional Charter.
Specifically, Article 36 of the Italian Constitution states that fair pay is pay which ensures the worker a free and dignified existence and is proportionate to the quantity and quality of the work performed.
This pay is usually quantified by collective bargaining in the relevant sector.
In this regard, the Italian Court of Cassation confirmed in ruling no. 27711 of 2 October 2023 that, in the event that the minimum wage is determined by a legal provision, as in the case of the cooperative sector, ‘fair’ pay must in any event be assessed on the basis of the comparatively most representative collective agreement within the sector of activity or other relevant ‘financial’ information.
In particular, in the aforementioned ruling, the Italian Court of Cassation clarified that the judge, even where there is a rule establishing the minimum wage, in assessing compliance with the constitutional parameters on fair pay, must verify the consistency of that wage also in the light of the provisions of the collective bargaining agreement signed by the most representative employers’ and trade union associations. In the event of a negative outcome, the judge must extend the investigation to other concurrent parameters such as, for example, the financial and statistical indicators used to measure the poverty threshold the ISTAT index (Istituto nazionale di statistica– Italian National Institute of Statistics), the income threshold to qualify for an incapacity pension, or the statistical indicators identified by the Directive (EU) 2022/2041 on adequate minimum wages.
Decree-Law 48 of 4 May 2023, so-called “Decreto Lavoro“, which came into force on 5 May, lays down new measures to, inter alia, simplify the employment disclosure requirements to which companies are subject under the so-called “Decreto Trasparenza” (Legislative Decree 104/2022).
Unlike in the past, some of the information that employers were bound to provide in detail in the employment contract or in a specific policy (length of probationary period, training, paid holidays and leaves, notice of dismissal and resignation, components of remuneration, working hours, overtime, social-security and insurance institutions) may now be given to workers just by referring to the relevant provision of law or of the collective agreement that applies to the employment, including the company agreement. For simplification purposes, and in order to ensure uniformity in the employer’s communications, the latter shall deliver and make available to workers, including through publication on the website, the national, local and company collective agreements, as well as any company rules that apply to the employment.