Effective January 1, 2016, California Employers of all sizes are required to comply with the Fair Pay Act, which requires that employers provide equal pay to male and female employees who perform “substantially similar” work. 

 The Act amends California Labor Code Section 1197.5 (known as the California Equal Pay Act) which generally prohibits employers from paying lower wages to employees of one gender as compared to employees of the opposite gender when those employees (a) work at the same establishment, and (b) perform “equal work” on jobs requiring “equal” skill, effort and responsibility and which are performed under similar working conditions in the same establishment. 

 The new law eliminates the “equal work” requirement and will now bar employers from paying disparate wage rates to employees of one sex as compared to the opposite sex where the employees perform “substantially similar work when viewed as a composite of skill, effort, and responsibility and performed under similar working conditions.” The Fair Pay Act will also eliminate the current Section 1197.5 requirement that the wage differential be in the “same establishment.” Now, employers must be mindful of paying equal wages to employees who perform substantially similar work throughout their entire company and not just at any given location.