"Until now, bosses were asked not to discriminate against women. From now on they will be banned from doing so or face serious penalties," said Mara Carfagna, Italy's equal opportunities minister.
She added the law aimed to "do away with obstacles which prevent women... from pursuing their careers and reaching managerial positions".
The tough new legislation punishes salary differences between men and women and pays particular attention to the treatment of female employees during pregnancy and maternity leave.
Under the proposed bill, the longest prison sentence for being convicted of workplace discrimination increases fourfold from three months to a year.
The maximum fine rises to 50,000 euros (71,000 dollars), from the current top amount of just 206 euros.
All forms of discrimination suffered by staff, be they male or female, are targeted by the law, ANSA reported.
Treatment judged as unfair in access to employment, training, and professional advancement would be punished.
The bill was approved by ministers Friday but must now be passed by local authorities and parliaments before being adopted.
The law would bring Italy into line with an EU directive on equality.