Until recently, employees in Puerto Rico covered by the Federal Labor Standards Act (“FLSA”) earned at least $7.25 per hour, the federal minimum wage. On January 1, 2022, however, Governor Pierluisi signed into law the Puerto Rico Minimum Wage Act, Act 47-2021 (“Act”) which established the state minimum wage at $8.50 per hour.

The Act also provides an automatic wage increase to $9.50 per hour which will take effect on July 1, 2023. A third increase to $10.50 is scheduled for July 1, 2024.  However, this third increase, contrary to the first two, is not automatic. The Act creates and authorizes the Minimum Wage Evaluation Commission (“Commission”) to provide otherwise by issuing a mandatory decree.

The Act mandates the Commission to issue special mandatory decrees to establish a state minimum wage for agriculture workers and those who earn tips.  The state minimum wage provided by the Act is not applicable to these employees. 

Administrators, professionals and executives -as these terms are defined by Regulation 13 of the Minimum Wage Board- are also among those workers not subject to the state minimum wage. The Commission, however, is authorized to establish a special mandatory decree for these employees.

Federal, state and municipal employees are expressly excluded from the Act, as well as employees covered by a collective bargaining agreement if it establishes a higher wage.

The Act provides that the state minimum wage shall prevail if it is higher than the federal minimum wage. That is, the state minimum wage can never be less than the federal minimum wage.

Special penalties, up to $5,000, may be assessed for those employers who choose not to comply with the Act or with any decree issued under the Act, including fines for recurrent violations up to $10,000.  In addition, employees are entitled to receive the difference between the wage paid below the state minimum wage, as well as an equal amount as penalty, plus costs and attorney’s fees. 

Employers should carefully review their payroll records since the statute of limitations to file a claim under the Act is five (5) years from the date of termination, and the former employee can claim unpaid wages and any other remedy provided by the Act, up to five (5) years prior to the termination date.  If there is still an employment relationship, the employee can claim unpaid wages up to five (5) years prior to the date the action was filed.

The content of this news alert has been prepared for informative purposes only and it is not, nor it is intended to be, legal advice, consultation or solicitation of any prospective client, nor a substitute for professional legal advice.  An attorney-client relationship with Voltaggio, LLC cannot be formed by reading or responding to this news alert. Such a relationship may be formed only by express agreement with Voltaggio, LLC.

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