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05/22/2007

RETAIL OPERATIONS MUST FOLLOW PUERTO RICO'S CLOSING LAW

Commercial establishments in Puerto Rico can only open to the public within a specified schedule, as provided under the law Regulating the Operation of Commercial Establishments, No. 1 of December 1, 1989 (also known as the ‘closing law’). Covered establishments operating outside the allowed schedule are subject to serious administrative civil and criminal penalties (fine, imprisonment or both). The Department of Justice (Antitrust affairs)  investigates violations pertaining to the opening of the store while the Department of Labor enforces the applicable labor laws.

Thus, a business subject to the closing provisions can breach the law by both opening a store outside the allowed time and by scheduling employees to work during such a time. In cases where the Store has both exempt and non exempt goods, it can still operate legally during the closing period if it takes all necessary precautions and refrains from selling the non exempt products. The department of Labor has issued a regulations on this issue.

Commercial establishments means “any site, store or similar place where any type of business operation or commercial activity for the sale or transfer of retail articles or which combine wholesale and retail sales are carried out”. 

The Law distinguishes between  half-day, full-day  and Sunday closing.  During  the hours during which the  establishment must remain closed, it cannot conduct any type of work done “except those tasks that are related to the continuity of its operations and maintenance”.

Half day closing allows commercial establishments to remain open from 5:00 a.m.
to 9:00 p.m. on: Monday to Saturday,  January 5, December 24 and December 31. 

Full-day closing means that establishments must be closed all day (24 consecutive hours, which begin and end at midnight). These days are:

  • January 1
  • January 6
  • Good Friday
  • Easter Sunday
  • Mother’s Day
  • Father’s Day
  • General Elections Day
  • Thanksgiving
  • December 25

Sunday closing means that on sunday,  business establishments may only open to the public from 11:00 a.m. to 5:00 p.m.; except if it falls on a full or a half day, in which case it would follow the applicable schedule for the full or half day.

There are exceptions depending on the type of store involved, the nature of the goods sold and the number of employees. Employees that work on Sundays for stores covered by the Closing Law must be paid double the regular rate. Furthermore, there are restrictions as to the employees allowed to work:

§ 305. Exceptions

The following business establishments shall not be subject to the provisions on opening and closing indicated in §§ 302, 304 and 305 of this title:

(a)     Those operated exclusively by their owners or their relatives within a second degree of consanguinity or affinity.

(b)    Those that are owned by natural or juridical persons and that do not have more than fifteen (15) employees in their weekly payroll, but are subject to the provisions and penalties of §~ 307, 308 and 310 of this title.

(c)     Those located in places exclusively engaged in the development of cultural, artisan, recreational or sports activities, whose articles to be sold are connected to the activity performed in that place.

(d)    Those dedicated mainly to the manufacturing of foodstuffs and the direct sale to the public of cooked meals or other foodstuff, including restaurants, cafes, coffee shops, bakeries, pastry shops and businesses where only milk, brewed coffee, ice, ice cream, sherbets or candies are sold.

(e)     Pharmacies authorized and registered pursuant to the §§ 381 et seq. of Title 20, but whose sales are limited to prescribed medications, over the counter medications, health articles, as these terms are defined in §§ 381 et seq. of Title 20 and regulations. They may also sell baby and personal hygiene articles, perfumes, cosmetics, confections, stationery, school and photographic supplies, newspapers, books and magazines.

(f)     Gasoline stations and convenience stores located therein or business establishments of similar commercial activity, whose sales area does not exceed three hundred and fifty (350) square meters limited to the sale of groceries, household articles, novelties, toys, gifts, photography and drug­store articles, goods for outings and trips, stationary, fast foods, soft drinks, cigarettes, candy, milk, and ice, excluding alcoholic beverages; Provided, That said business establishments located in gasoline stations or establish­ments with similar commercial activity, must comply with those provisions of law and regulations applicable thereto.

(g)    Bookstores, newsstands, booths or kiosks for the sale of books, magazines, newspapers and literary or musical publications or tapes.

(h)    Galleries, workshops, centers, booths that sell Puerto Rican works of art and artisanry.

(i)    Those that operate within the premises, buildings and terminals of airports and seaports.

(j) Those that operate within hotels, inns, condo-hotels and that are part facilities that they offer their guests or visitors.

(k) Those that operate as part of the facilities of a funeral home or

(l) Marketplaces.

(m) Those located within the demarcation of an old or historic zone established or to be established pursuant to law, and those located in a zone that the Puerto Rico Planning Board has established as of tourist interest as of December 31, 1988, pursuant to the provisions of §§ 161 et seq. of  Title 23. Business establishments located in the abovementioned zones that are not dedicated predominantly to the sale of articles of tourist interest as established by the regulations of the Department of Commerce, shall comply with the provisions of §§ 306 and 307 of this title and shall be the remedies and penalties provided in §§ 308 and 310 thereof.  Furtherore, business establishments located in said zones and not dedicated predominantly to the sale of goods of tourist interest shall pay their regular employees at a rate equivalent to twice the rate agreed upon for regular working hours, during those hours they work which are established for the closing of business establishments in §§ 302, 303 and 304 of this title.

(n) The establishments, that as a matter of exception, must do urgent or necessary work to avoid danger or considerable loss of money and that have authorization provided in §§ 289 and 290 of this title.

When a business establishment conducts operations covered by the of this section, together with operations subject to the provi­sions of §§ 302, 303 and 304 of this title, it may only conduct the operations exempted under said section in a continuously [sic] without being subject to established in said §§ 302, 303 and 304, and shall take all the necessary precautions to prevent the access of the consumers thereto and avoid the non-exempt operations during the closing hours provided in this chapter. The Secretary of Labor and Human Resources shall be empow­ered to surveil and require compliance of this provision and shall establish the precautions that must be observed in the cases such as the one foreseen herein through regulations.

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