Puerto Rico's New Post-Hurricane Guidance: A How-To on Paying Exempt And Non-Exempt Workers

Author:Mr Enrique Del Cueto-Perez and Ryan J. Correia
Profession:Ogletree, Deakins, Nash, Smoak & Stewart

On October 17, 2017, the Secretary of the Puerto Rico Department of Labor and Human Resources (Secretary of Labor) published Opinion No. 2017-001, providing further guidance to private-sector employers on how they should compensate their non-exempt and exempt employees in Puerto Rico in light of the prolonged interruption in business activities brought about by Hurricanes Irma and Maria. The Opinion is consistent with the Fair Labor Standards Act (FLSA) and Puerto Rico wage and hour law. Employers should observe the rules discussed below unless an employment contract, applicable collective bargaining agreement (CBA), or company policy or practice provides for more generous benefits.

Non-Exempt Employees

Non-exempt employees must be paid only for time in which they actually perform work or make themselves available to work (i.e., engaged to wait) for the employer. Additionally, any time during which an employee is allowed to carry out work for the benefit of the employer, even if not required by the employer, constitutes compensable time and should be treated and remunerated as such. Therefore, if a non-exempt employee does not perform any work or is not engaged to wait to perform work, then he or she does not need to be paid unless there is an individual employment contract, an applicable CBA, or a company policy or practice providing otherwise.

While there is no statutory obligation to pay a non-exempt employee if he or she does not perform work or make himself or herself available to work, Puerto Rico's Secretary of Labor encourages employersfor obvious humanitarian reasonsto continue paying non-exempt employees throughout the interruption of business activities resulting from the hurricane's devastation. However, if an employer cannot pay non-exempt employees outright, the Secretary of Labor recommends that, upon a non-exempt employee's request, the employer allow that employee to offset any time off from work, due to the hurricanes, with any accrued but unused statutory vacation leave or sick leave or with any other paid leave to which the employee may be entitled under his or her contract of employment, a CBA, or the...

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