diff --git a/params/params.go b/params/params.go
index a60f314d..9ad0875e 100644
--- a/params/params.go
+++ b/params/params.go
@@ -482,13 +482,16 @@ func (p *Pool) PoolType() ForgeEntityType {
 }
 
 func (p *Pool) HasRequiredLabels(set []string) bool {
+	if len(set) > len(p.Tags) {
+		return false
+	}
 	asMap := make(map[string]struct{}, len(p.Tags))
 	for _, t := range p.Tags {
-		asMap[t.Name] = struct{}{}
+		asMap[strings.ToLower(t.Name)] = struct{}{}
 	}
 
 	for _, l := range set {
-		if _, ok := asMap[l]; !ok {
+		if _, ok := asMap[strings.ToLower(l)]; !ok {
 			return false
 		}
 	}
diff --git a/params/params_test.go b/params/params_test.go
new file mode 100644
index 00000000..57c868f4
--- /dev/null
+++ b/params/params_test.go
@@ -0,0 +1,161 @@
+// Copyright 2025 Cloudbase Solutions SRL
+//
+//    Licensed under the Apache License, Version 2.0 (the "License"); you may
+//    not use this file except in compliance with the License. You may obtain
+//    a copy of the License at
+//
+//         http://www.apache.org/licenses/LICENSE-2.0
+//
+//    Unless required by applicable law or agreed to in writing, software
+//    distributed under the License is distributed on an "AS IS" BASIS, WITHOUT
+//    WARRANTIES OR CONDITIONS OF ANY KIND, either express or implied. See the
+//    License for the specific language governing permissions and limitations
+//    under the License.
+
+package params
+
+import (
+	"testing"
+)
+
+func TestPool_HasRequiredLabels(t *testing.T) {
+	tests := []struct {
+		name           string
+		poolTags       []Tag
+		requiredLabels []string
+		expected       bool
+	}{
+		{
+			name:           "empty pool tags and empty required labels",
+			poolTags:       []Tag{},
+			requiredLabels: []string{},
+			expected:       true,
+		},
+		{
+			name:           "empty pool tags with required labels",
+			poolTags:       []Tag{},
+			requiredLabels: []string{"label1"},
+			expected:       false,
+		},
+		{
+			name: "pool has all required labels - exact match",
+			poolTags: []Tag{
+				{Name: "label1"},
+				{Name: "label2"},
+				{Name: "label3"},
+			},
+			requiredLabels: []string{"label1", "label2"},
+			expected:       true,
+		},
+		{
+			name: "pool missing one required label",
+			poolTags: []Tag{
+				{Name: "label1"},
+				{Name: "label3"},
+			},
+			requiredLabels: []string{"label1", "label2"},
+			expected:       false,
+		},
+		{
+			name: "pool has more labels than required",
+			poolTags: []Tag{
+				{Name: "label1"},
+				{Name: "label2"},
+				{Name: "label3"},
+				{Name: "label4"},
+			},
+			requiredLabels: []string{"label1", "label2"},
+			expected:       true,
+		},
+		{
+			name: "case insensitive matching - lowercase required",
+			poolTags: []Tag{
+				{Name: "Label1"},
+				{Name: "LABEL2"},
+			},
+			requiredLabels: []string{"label1", "label2"},
+			expected:       true,
+		},
+		{
+			name: "case insensitive matching - uppercase required",
+			poolTags: []Tag{
+				{Name: "label1"},
+				{Name: "label2"},
+			},
+			requiredLabels: []string{"LABEL1", "LABEL2"},
+			expected:       true,
+		},
+		{
+			name: "case insensitive matching - mixed case",
+			poolTags: []Tag{
+				{Name: "LaBel1"},
+				{Name: "lAbEl2"},
+			},
+			requiredLabels: []string{"lAbEl1", "LaBel2"},
+			expected:       true,
+		},
+		{
+			name: "more required labels than pool tags",
+			poolTags: []Tag{
+				{Name: "label1"},
+			},
+			requiredLabels: []string{"label1", "label2", "label3"},
+			expected:       false,
+		},
+		{
+			name: "exact match with single label",
+			poolTags: []Tag{
+				{Name: "ubuntu"},
+			},
+			requiredLabels: []string{"ubuntu"},
+			expected:       true,
+		},
+		{
+			name: "no match with single label",
+			poolTags: []Tag{
+				{Name: "ubuntu"},
+			},
+			requiredLabels: []string{"windows"},
+			expected:       false,
+		},
+		{
+			name: "duplicate required labels",
+			poolTags: []Tag{
+				{Name: "label1"},
+				{Name: "label2"},
+			},
+			requiredLabels: []string{"label1", "label1"},
+			expected:       true,
+		},
+		{
+			name: "special characters in labels",
+			poolTags: []Tag{
+				{Name: "self-hosted"},
+				{Name: "linux-x64"},
+			},
+			requiredLabels: []string{"self-hosted", "linux-x64"},
+			expected:       true,
+		},
+		{
+			name: "similar but not exact labels",
+			poolTags: []Tag{
+				{Name: "label1"},
+				{Name: "label12"},
+			},
+			requiredLabels: []string{"label1", "label2"},
+			expected:       false,
+		},
+	}
+
+	for _, tt := range tests {
+		t.Run(tt.name, func(t *testing.T) {
+			pool := &Pool{
+				Tags: tt.poolTags,
+			}
+			result := pool.HasRequiredLabels(tt.requiredLabels)
+			if result != tt.expected {
+				t.Errorf("HasRequiredLabels() = %v, expected %v", result, tt.expected)
+			}
+		})
+	}
+}