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New Puerto Rico Law Limits Employers’ Use of Credit Reports in Employment Decisions

Puerto Rico has enacted legislation to limit the use of credit reports in making employment decisions.

New Legislation Precludes Employers in Puerto Rico from Using Credit Reports or Credit History to Take Employment Actions

On October 8, 2019, the Governor of Puerto Rico signed into law Act No. 150 of October 8, 2019 (“Act 150” or “the Act”), which prohibits employers from, among other actions, verifying or investigating credit history or credit reports concerning current employees or employment candidates, or from obtaining or ordering such reports from a credit agency. The Act further prohibits employers from taking adverse employment actions based on an employee’s or employment candidate’s credit history or report.

Littler Global Guide - Puerto Rico - Q3 2019

Browse through brief employment and labor law updates from around the globe. Contact a Littler attorney for more information or view our global locations.

Minimum Salary Level in DOL’s Final Overtime Rule Will Not Apply to Puerto Rico

On September 24, 2019, the Wage and Hour Division of the U.S. Department of Labor (DOL) announced its final rule concerning changes to the Fair Labor Standards Act (FLSA) “white collar” overtime exemptions. This final rule, which will take effect on January 1, 2020, (a) increases from $455 to $684 per week ($35,568 per year) the minimum standard salary level for overtime exemption; (b) raises from $100,000 to $107,432 per year the total annual compensation requirement for “highly compensated employees” (HCE); and (c) permits employers to use nondiscretionary bonuses and incentive payments to satisfy up to 10% of the minimum salary level as long as such payments are made at least annually.1

Puerto Rico Enacts Law Providing Unpaid Leave and Reasonable Accommodation for Victims of Abuse

On August 1, 2019, just a day prior to his resignation as Governor of Puerto Rico, Ricardo Rosselló signed into law Act No. 83 of August 1, 2019 (“Act 83” or “the Act”), a very detailed leave statute applicable to public and private employers. Act 83, in general terms, provides employees with 15 days of unpaid leave per year for instances of gender or domestic violence, abuse of minors, sexual harassment in employment, sexual assault, lewd acts or aggravated stalking. This special leave also extends to family members, and allows employees to request reasonable accommodations, or flexible work conditions, to address these situations. Employees may request to take this leave through apportioned, flexible, or intermittent schedules.

Puerto Rico Supreme Court Holds Act 2’s Counterclaim Bar Does Not Preclude Employer’s Independent Suit

Act No. 2 of October 17, 1961 (Act 2) created a procedural process for the expeditious adjudication of employment claims in Puerto Rico. Among other ways to streamline the process, Act 2 bars the employer from filing a counterclaim against the employee.1 In Bacardí Corporation v. Evaristo Torres Arroyo, 2019 TSPR 133, 202 D.P.R. __ (July 26, 2019) (Bacardí), however, the Supreme Court of Puerto Rico held that Act 2’s counterclaim bar does not preclude an employer from commencing a separate and independent action against the employee outside of Act 2’s summary proceedings.

Puerto Rico Enacts Leave for Victims of Domestic Violence, Sexual Harassment and Assault

Employees in Puerto Rico may take up to 15 days of unpaid leave each calendar year to address situations related to domestic or gender-based violence, child abuse, sexual harassment in employment, sexual assault, lewd acts, or felony stalking under a new law. The new “Special Leave” is in addition to any other leave to which the employee might be entitled under law.

Guidelines on the Interpretation of Puerto Rico’s Employment Legislation, Chapters 6 and 8

As we have previously discussed, the Puerto Rico Department of Labor (PR DOL) recently published the first edition of its Guidelines on the Interpretation of Puerto Rico’s Employment Legislation (Guidelines), which includes the PR DOL’s official statutory interpretation of nearly all of Puerto Rico’s employment laws. The over 200-page Guidelines are divided into 15 chapters and cover a wide range of statutes. This Insight is the third in a series that will provide a chapter-by-chapter analysis of the most important topics addressed in the Guidelines, including an interpretation of key provisions of the Puerto Rico Labor Transformation and Flexibility Act, Act No. 4 of January 26, 2017 (“Act 4-2017” or “LTFA”), which made substantial changes to virtually all existing employment laws in Puerto Rico. This installment includes a discussion of Chapters 6 and 8, which provide guidance on vacation entitlement, sick leave, lactation breaks, and equal pay.

Puerto Rico DOL Issues Guidance on Law Prohibiting Sexual Orientation and Gender Identity Discrimination

On May 2019, the Puerto Rico Department of Labor (PRDOL) revised and updated its Protocol on Sexual Orientation and Gender Identity Discrimination pursuant to Act No. 22 of 2013 (Protocol). The new Protocol contains guidelines to assist private and public employers on how to interpret and implement Act No. 22, which generally prohibits sexual orientation and gender identity discrimination in most public and private-sector workplaces.

Puerto Rico Supreme Court Holds Arbitration Clauses in Employment Contracts—Including Those Governing Unjust Dismissal Claims—are Valid and Enforceable

The Puerto Rico Supreme Court (PRSC) recently issued a judgment in José Méndez et al v. Carso Construction, 2019 TSPR 19 (May 22, 2019), validating an arbitration clause that covers a claim under the Puerto Rico Unjust Dismissal statute, Local Act No. 80 of May 30, 1976 (Act 80). The effect of the PRSC’s holding is that an arbitrator will have original jurisdiction to hear unjust dismissal disputes if the contract between the employer and the employee or contractor includes a valid arbitration clause.
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