8 posts categorized "Employment Wage & Hour"

01/05/2008

PAYROLL CARDS TO BE ALLOWED IN PUERTO RICO

On December 26, 2007 the governor signed into law Act 213  which allows businesses to pay salary by electronic transfer of funds to third party accounts.

Previously there were only three ways a business could pay salary: cash, check or direct deposit/electronic transfers to an employee's checking or savings account.  It would be illegal to electronically transfer salary to any other account that was not the employee's own bank account.  This situation prevented businesses from offering enhanced electronic pay options for employees; particularly the so called 'payroll cards'.  These cards operate like a debit card.  Employees  receive their net pay via direct deposit into a secure account that  is set up and maintained by a financial institution. This option is excellent for those employees who do not have a bank account nor wish to open one.

 

07/05/2007

NEW MINIMUM WAGE LAW POSTER

A revised Federal minimum wage poster, reflecting the  minimum wage increases, is  available free of charge on the Department of Labor’s Web site. Effective July 24, 2007, the federal minimum wage for covered non-exempt employees will be $5.85 per hour.  The minimum wage increases to $6.55 per hour effective July 24, 2008; and $7.25 per hour effective July 24, 2009.

Employers covered by the Fair Labor Standard Act’s minimum wage provisions must post  a notice explaining the Act to all employees.

 

06/01/2007

LOCAL MINIMUM WAGE LAW MAY REMAINS UNCHANGED (BUT NOT WAGES)

Given the fact that Congress  had taken so long to raise the minimum wage, local legislators were pushing for a bill to raise the Island's minimum wage and eliminate the current attachment to the federal minimum under law No. 180 of July 27, 1998.

Federal minimum wage automatically applies to workers in Puerto Rico covered by the Fair Labor Standards Act (FLSA). However, employers not covered by the FLSA  pay a minimum wage equivalent to seventy percent (70%) of the prevailing federal minimum wage.

With recent Congressional approval of a new minimum, many are expecting that the local initiative dies. Mainly because it included higher wages and periodic raises.

05/25/2007

RETAIL OPERATIONS NEED TO UNDERSTAND THE CLOSING LAW TO AVOID STIFF FINES

Puerto Rico’s ‘Closing law’ requires retail commercial establishments to remain closed during certain hours and days. In the case of Sundays,  an establishment may only open for business from 11:00 a.m. to 5:00 p.m. There are exceptions depending on the type of store involved, the nature of the goods sold and the number of employees.

Besides civil and criminal penalties for requiring employees to work on Sundays, a commercial establishment risks severe penalties for selling merchandise outside the allowed hours of operation.   The Department of Justice of Puerto Rico investigates and files administrative complaints against commercial establishments that fail to abide by the opening/closing schedule. 

The charges are filed before the Department of Consumer Affairs (DACO) which ultimately decides the applicable fines. The fines can later be appealed in a court of law.

Penalties are stiff- up to for $50,000 for each violation. Here are some real-life examples (some of which were later revoked):

  • ELA v. Frigorifico, 2001 JTS 125: A supermarket  operation received a      $50,000.00 fine.
  • Supermercado Selectos de Venus Gardens: A supermarket fined $15,000 by DACO.
  • Supermercado Jardines de Caparra, 2002 JTS 103:  DACO issued a $10,000 fine to the merchant.
  • Servicentro v Justicia,  PR Court of Appeals, KPE01-0823 (907): A gas station franchisee was facing  over $50,000 in fines.
  • DACO v. CM Cash and Carry,2002 TCA 1574: Supermarket  sold a pack of lightbulbs to an undercover agent from the Justice Department and later was fined $5,000. When IT refused to pay, DACO obtained a court order  against the owner for criminal contempt.
  • E.L.A. v. Diaz Arocho, 2000 TCA 839: In 1999 a business was fined $20,000 for violations that had occurred in 1994.
  • ELA v. Farmacia La Nueva Modelo De Bayamón, 2000 TCA 1662: A pharmacy was fined $10,500 for selling to  an undercover agent three items (on Sundays before 11:00 a.m.)  totaling $6.47.
  • ELA v. Fairview Service Station, Inc., 2001 TCA 486: A circle K franchisee was fined 9,500 for selling merchandize to an undercover investigator totaling .94 cents.
  • ELA v. Royal Motors Corp,  98 TCA 343: Car dealer fined  $5,000 for opening on a holiday.
  • ELA v. Caguas Expressway Motors, 2000 TCA 1582: Car dealership fined $10,000 for opening before 11:00 a.m. on Sundays.

The biggest danger I see for commercial establishments is that the Justice Department takes a long time to complete the complaint process.  It may gather evidence in the course of several years and then simultaneously file a dozen charges which could ultimately cripple a small business. The case also moves at a slow pace in  DACO; often taking more than a year to adjudicate a complaint.

03/20/2007

Understanding Overtime in Puerto Rico

To avoid running into serious legal liability, an employer needs to thoroughly understand how overtime operates in Puerto Rico. Let´s examine how extra hours occur during a regular workday. Unlike most jurisdictions in the United   States, overtime can be accrued many more ways than working over forty hours a week.

Actually, when companies in the U.S think about overtime they only talk about the maximum number of hours an employee can work in a week without incurring in overtime. In Puerto Rico however overtime includes: 

  • Work in excess of forty 40 hours during any week;
  • Working over 8 hours in any 24 hour period;
  • The hours that an employee works for his employer during the day of  rest;
  • Not taking the mandatory meal period within the allotted time frame;
  • Hours that an employee works for his employer during the days or  hours when the establishment in which he-she renders services should  remain closed to the pubic by legal provision.

Daily Overtime

An  individual can incur in daily overtime by working more than 8 consecutive hours or by working more than 8 hours during any period of 24 consecutive hours. 

To determine whether  a particular hour is considered overtime, we must look back 24 hours. Visualize that each hour worked is the last hour of the 24 hour period that ends on such hour. If the hours exceed 8 within the previous 24 hour period, it is considered overtime.

So for example if an employee works from 9 am to 6 pm on Monday (with an hour of lunch) and on Tuesday the individual works from 8 am to 5 pm, there is one hour of overtime for the 24 hour period that ended at 8 am.  By beginning work an hour earlier 9 hours of work were incurred within the 24 hour cycle that ended at 8 am; regardless of whether the hours were worked on two separate days- 8 hours on Monday and 1 hour on Tuesday (8-9 am). Another way overtime can occur is if the meal period is delayed with respect to the previous day. For example an individual enjoys a meal period from 11 a.m. to 12 noon one day and from 12 noon to 1 p.m.
the next.

The reason behind this cumbersome way of calculating overtime is to avoid late shifts one day and early shifts the next- denying appropriate rest to the worker. Do not laugh at this notion. If you were the worker you would find this a neat feature in your employment package.

Every employer  who allows an employee to work during extra hours shall be obligated to pay  him-her for each extra hour a wage rate equal to the  rate agreed upon for regular hours, provided , however that every employer  covered by the Fair Labor Standards Act shall pay only time and a half.

02/27/2007

MINIMUM WAGE INCREASE INCHES CLOSER TO APPROVAL

A bill set to increase the minimum wage in Puerto Rico was approved yesterday by a 46  to 1 vote   in the  House of  Representative. Most of the Senators seem to favor it  but the Governor as of lately is inclined to wait and see what happens with the federal minimum wage bill in Congress.   The House version seeks an immediate raise of $6.25/hour.

Our local minimum wage law automatically increases with the federal minimum  wage. The issue for many is that the federal minimun has been stagnant for too long. So, our legislators always antibusiness and mostly ignorant of free market and competitiveness issues   are attempting  to do away with the  pairing concept.

Will they ever understand that we need employers  to offer jobs that pay wages?

01/11/2007

MORE ON PUERTO RICO'S 2006 LABOR LAWS

Continuing my review of last year’s legislation I deem appropriate to mention two additional legal provisions. One is an amendment to Regulation #13  and the other pertains to Puerto Rico’s ‘Closing Law’.

CLOSING LAW

·    Act # 24 – 1/23/2006,  favorably amends PR’s closing law  to increase from seven (7) to fifteen (15) the number of employees a retailer may have in its weekly payroll  to remain exempt from the opening and closing provisions of said law.  Puerto Rico’s  ‘Closing law’ requires a retail operation to remain closed during certain days including Sundays -except between the hours of  11:00 a.m. to 5:00 p.m.  There are exceptions depending on the type of store involved, the nature of the goods  sold  and the number of employees.

WAGE & HOUR

·    Regulation 13-   2/17/2006, was amended in 2005 but its changes became effective on February 17, 2006. This Fifth revision basically increases to $455.00 the minimum salary  for an employee to be considered exempt under the  categories of Administrator, Executive and Professional. It also modifies the language of the regulation, making  it similar to its federal counterpart. 

10/14/2006

Amendments to PR Closing Law

Puerto Rico’s  ‘Closing law’,  Ley para Regular las Operaciones de Establecimientos Comerciales, Act 1 of December 1, 1989, as amended,  requires all retail stores to remain closed during certain hours.  From Monday to Saturday  a store can remain open from 5:00 a.m. to midnight and on Sunday between the hours of 11:00 a.m. to 5:00 p.m.  During particular holidays, stores must remain closed. There are exemptions and other provisions depending on the type of day, store involved, the nature of  goods  sold  and the number of employees. 

Operating outside the allowed time period  subjects the merchant to potentially serious civil and criminal penalties. Exposure is two-fold; opening the store and scheduling employees to work. Each violation is separate and enforced by two different local government agencies. The Department of Justice, Antitrust Division (Asuntos Monopolisticos) deals with the opening issue and the Department of Labor investigates employment violations.

Legislation this year (Act 24 of January 23, 2006)  doubled the maximum number of employees a business can have to remain exempt from the law;  from seven (7)  to fifteen (15). This means that now more businesses can remain open during Closing Law hours.

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