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Total Articles: 10

Puerto Rico Governor Signs Executive Order Increasing Minimum Wage for Construction Workers in Government-Funded Construction Projects

On July 30, 2018, the governor of Puerto Rico signed Executive Order No. 2018-033, increasing the minimum wage for construction workers, enforcing laws requiring use of locally produced cement, and requiring the use of project labor agreements in government-funded construction projects. More specifically, the Executive Order requires that if any construction project is financed in whole or in part with funds from the Puerto Rico Government, its agencies, instrumentalities or public corporations, the contractor or subcontractor must pay employees hired to work on that project at least $15.00 per hour.

Puerto Rico Law Authorizes Pay Deductions as Repayment for Employer-Provided Emergency Aid

Puerto Rico is still reeling from the aftermath of Hurricane Maria. Recently, the governor of Puerto Rico signed into law Act No. 115 of June 20, 2018, to promote recovery efforts and provide much-needed aid to affected non-exempt employees in situations of emergency. Ordinarily, Puerto Rico law does not allow deductions from a non-exempt employee’s salary, except for specific purposes defined in Act No. 17 of April 17, 1931, as amended. Act No. 115 amends Article 5 of Act No. 17 to lengthen the list of authorized payroll deductions. Consequently, employers in Puerto Rico are now able to prospectively recoup, via salary deductions, any loan, salary advance, or the cost of any equipment, materials, or goods provided to their non-exempt employees to help them in situations where there has been an emergency declaration by the president of the United States, the Federal Emergency Management Agency (FEMA), or the governor of Puerto Rico.

Littler Global Guide - Puerto Rico - Q2 2018

Guidance on the Federal Employee Retention Benefit for Certain Employers Affected by Hurricane Irma and María

Puerto Rico: New Act Extends the List of Authorized Deductions to Non-Exempt Employees' Wages

The Governor of Puerto Rico recently signed into law Act No. 115, extending the list of authorized payroll deductions under Act 17-1931 (“Act 17”). As a general rule, deductions from non-exempt employees’ wages in Puerto Rico are prohibited unless specifically authorized by Article 5 of Act 17.

Puerto Rico Department of the Treasury Issues Guidance on the Federal Employee Retention Benefit for Certain Employers Affected by Hurricanes Irma and Maria

On September 29, 2018, the Disaster Tax Relief and Airport Extension Act of 2017, as amended (the “Act”), was adopted to, among other goals, provide tax relief to those affected by Hurricanes Irma and Maria. The Act includes an employee retention benefit (the “Benefit”) available to eligible employers.

Employment-at-Will Comes to Puerto Rico?

Puerto Rico’s Financial Oversight and Management Board and Governor Ricardo Rosselló have sent bills to the Puerto Rico legislature to repeal the Unjust Dismissal Act, Act No. 80 of May 30, 1976 (Act 80). If either bill is enacted, employers in Puerto Rico will no longer be required to have “just cause” to dismiss employees hired for an indefinite term.

Employment Law Reform in Puerto Rico: Take Two

Last month, we reported that the Governor of Puerto Rico announced his “Initiative to Reform the Labor Force,” which would have created significant employment law changes to increase the employment participation rate on the Island. One week later, on March 28, 2018, in response to strong opposition from the Puerto Rico Legislature, the Governor withdrew his proposal. Now, it is the Fiscal Oversight and Management Board (FOMB) that is proposing additional employment law reform.

Puerto Rico Governor Announces Proposed Plan to Revamp the Labor Force

On March 21, 2018, the Governor of Puerto Rico announced his “Initiative to Reform the Labor Force,” with the express goal of increasing the employment rate. Standing alongside the presidents of the Senate and House of Representatives, the Governor anticipated this Initiative would include: elimination of the Christmas Bonus; implementation of a “Bonus for Work;” a tiered increase of the minimum wage; a reduction of sick and vacation leave; a reassurance that all recipients of the Nutritional Assistance Program (PAN, for its Spanish acronym) between the ages of 18 and 55 will join the labor force; and the repeal of Act 80 (indemnifying unjust dismissals). The Governor also intends to increase tax incentives and lower the current rates for individuals as well as corporations.

Puerto Rico Supreme Court Sets Standard to Apply the Successor Liability Doctrine

The Puerto Rico Supreme Court (“PRSC”) recently issued an Opinion in the case of Roldán Flores v. M. Cuebas, 2018 TSPR 18, 199 D.P.R. __ (Feb. 6, 2018), in which it addressed again the requirements for applying the “successor liability doctrine.”1 The PRSC held that prior to applying the successor liability doctrine, courts must first determine whether the prior owner/employer had any legal obligations or committed an illegal act with respect to the plaintiff-employee. If there was no employment obligation or illegal act attributable to the prior owner/employer, then there is no need to examine or apply the successor liability doctrine. In the context of unjust dismissal claims, the effect of the PRSC’s holding is that when there is a complete closing of operations, which is considered just cause for termination under Act No. 80 of May 30, 1976 (“Act 80”),2 there is no need to examine the applicability of the successor liability doctrine as there is no illegal act for which the acquiring entity could be held liable.

New Act in Puerto Rico Establishes a Special Paid Leave for Employees Suffering from Catastrophic Illnesses

The Governor of Puerto Rico recently signed into law Act No. 28 (“Act 28”), entitling all employees, including temporary employees, to take up to six days of paid leave per year if they suffer from a “catastrophic illness.” This bill, as presented to the Governor, defines catastrophic illnesses as those listed in the Health Insurance Administration of Puerto Rico Special Coverage (HIAPRSC), which currently includes: Acquired Immunodeficiency Syndrome (AIDS); Tuberculosis; Leprosy; Lupus; Cystic Fibrosis; Cancer; Hemophilia; Aplastic Anemia; Rheumatoid Arthritis; Autism; Post Organ Transplant; Scleroderma; Multiple Sclerosis; Amyotrophic Lateral Sclerosis (ALS); and Chronic Kidney Disease in levels 3, 4 and 5. To be entitled to this leave, employees must have worked for their employer for at least 12 months, and have worked an average of 130 hours per month during the previous 12-month period.