Minimum wage law passed in Puerto Rico
Citing factors such as inflation, population deceleration, migration, and the long-term economic effects of Hurricane Maria and the COVID-19 pandemic, Governor Pedro Pierluisi enacted the “Wage Law Puerto Rico minimum “. The new law replaces the lower federal minimum wage from 2022 and creates the “Minimum Wage Review Commission” to periodically review and potentially increase the minimum wage every two years.
The new law also establishes Puerto Rico’s public policy that no full-time worker should live below the poverty line and that all workers should earn enough to cover their basic expenses. This is the first time in more than a decade that Puerto Rico has raised its minimum wage. The current minimum is $ 7.25 per hour.
State Minimum Wage
Puerto Rico’s minimum wage will automatically increase to $ 8.50 an hour on January 1, 2022 and $ 9.50 an hour on July 1, 2023, for all employees covered by the Fair Labor Standards Act. The minimum wage is expected to increase to $ 10.50 an hour on July 1, 2024, unless the new Minimum Wage Review Board provides otherwise.
Exceptions to the coverage include agricultural workers, all government and municipal employees, employees of the judiciary and legislature, as well as “administrators”, “professionals” and “executives”, as defined by regulation 13 of the Puerto Rico Minimum Wage Council. Employees covered by a collective agreement providing for wages higher than those fixed by law or by decree (described below) will also be excluded from coverage. Those who receive tips will be entitled to the federal minimum wage which, added to their tips, must reach Puerto Rico’s minimum wage, established by law or decree.
Minimum Wage Review Commission
The law creates the Puerto Rico Minimum Wage Review Commission, which is part of the Puerto Rican Department of Labor. Led by the Puerto Rican Secretary of Labor, the Council will be composed of six additional members: two representatives from the employee sector; two representatives of the employers’ sector; an economist; and an expert in labor relations. All members must be approved by the Senate after their appointment by the Governor. Employee and employer representatives will serve for fixed terms of three years, for a maximum of three terms, and the economist and labor relations expert will serve a fixed term of five years, for a maximum of three terms.
The Council is to hold monthly meetings and publish annual reports on employment conditions for each industry. Upon presentation of the annual report, the Council may approve mandatory decrees to increase the minimum wage in accordance with the conditions cited. The decrees will have the force of law and must be published at least every two years, but not more than twice per calendar year. No decree can require an increase of more than 25 percent of the old national or federal minimum wage.
The Council must also approve special decrees for agricultural workers and employees with tips. It can approve special mandatory decrees for “administrators”, “professionals” and “executives” as defined by Regulation 13 of the Puerto Rico Minimum Wage Council.
Complaints and penalties
The law provides for penalties of up to $ 5,000 per offense for first-time offenders and up to $ 10,000 for repeat offenders, as well as automatic doubling of damages for unpaid wages. It also increased the limitation period for bringing a claim from one year to five years from the date of termination or filing of a judicial or extrajudicial claim and increased the claim period from three years to five years.
Jackson Lewis PC © 2021Revue nationale de droit, volume XI, number 264