Legal Update Volume 2016, Number 4

Cooperativa de Ahorro y Crédito Oriental v. Consejo de Titulares Cond. Beach Village; Palmas del Mar Homeowners Association, Inc.;,   2016 TSPR 79 ; 195 DPR ____  

In one of it’s latest decisions, the Puerto Rico Supreme Court has decided that a mortgage creditor who gains possession of a property through a nonrecourse debt, should be considered as voluntary title holder under Puerto Rico’s Condominium Law and or under the Puerto Rico’s Control Access Law; and as such is solitarily responsible for any maintenance debt and or common property debt that said property has at the time of the property acquisition.

For more information, feel free to contact Ignacio Gorrin Maldonado, Esq. igorrin@nrhlawpr.com.

Legal Update Volume 2016, Number 3

U.S. Department of Labor Final Overtime Rule:  What’s next

On May 18, 2016, the U.S. Department of Labor issued the much anticipated Final Overtime Rule.  The Final Rule, which takes effect on December 1, 2016, doubles the salary threshold—from $23,660 ($455 weekly) to $47,476 per year ($913 weekly)—under which most salaried workers are guaranteed overtime. Additionally, the Final Rule added a provision allowing employers to count nondiscretionary bonuses, incentives, and commissions toward up to 10 percent of the required salary level for the standard exemption, so long as employers pay those amounts on a quarterly or more frequent basis.

Moreover, beginning on January 1, 2020, this new salary level will be automatically updated every three years.  However, the final rule does not have an impact on employees who are not subject to either the salary basis or salary level tests, such as doctors, teachers, lawyers and outside salespeople.  Likewise, the Final Rule did not alter the standard duties test for employees who primarily perform executive, administrative, or professional duties

Since the increase in the salary threshold is significant, the issuance of the Final Rule provides employers an excellent opportunity to evaluate their existing exempt workforce by classification to determine the most cost-effective way of complying with this new rule.

For instance, some employers might consider, implementing flexible work schedules using the Puerto Rico Flextime Act in order to reduce overtime caused by working in excess of 8 hours in a 24 hour rolling period as a result of shift changes.  Also, employers could evaluate adequate staffing initiatives for purposes of eliminating the need of incurring overtime or minimizing it. Also, employers can design incentives and bonuses based on desired Company goals to offset the cost of increasing the salary basis with additional income generated by the productivity motivated by the incentives and bonuses.

Furthermore, employers can evaluate whether to increase a particular employee’s salary basis by comparing the cost of the salary basis increase versus the estimated cost of overtime to be incurred by the employee in said role.  With adequate monitoring and controls of overtime usage, employers may be compelled to increase the salary basis in instances of job classifications that have higher overtime hour demands.

In fact, the DOL provides in Q&A guide in its website that employers do not have to convert employees earning below the new salary threshold to hourly pay.  Hence, employers may opt to leave the existing salary in place and pay overtime whenever it is incurred.

To complicate matters further, employers should be mindful of the effect the final version of the Puerto Rico Oversight, Management and Economic Stability Act (PROMESA), HR 5278 of May 18, 2016, may have on the applicability of the Final Rule to Puerto Rico.  As it currently stands, section 404 of HR 5278, bars the application of the Final Rule to Puerto Rico until a report from the Comptroller General assessing the impact of the Final Rule is prepared and the Secretary of Labor certifies to Congress that applying the Final Rule to Puerto Rico would not have a negative impact on the economy of Puerto Rico.  The timeline for the report by the Comptroller General is two years.  Hence, if PROMESA is approved as drafted, the Final Rule will not apply in Puerto Rico for quite some time.

In sum, we understand the next 6 months or so will offer employers adequate time to consider all available options to comply with this new rule, if and when Congress determines whether to approve PROMESA.   We are available to assist you in your compliance efforts as it pertains to this rule.  For more information, feel free to contact Carmen Lucía Rodríguez, Esq. or Gerardo J. Hernández, Esq. at clrodriguez@nrhlawpr.com or ghernandez@nrhlawpr.com.

Legal Update Volume 2016, Number 2

Supreme Court of Puerto Rico holds that employer’s failure to provide adequate place for breast milk extraction may constitute a violation of an employee’s right to privacy under the Constitution of Puerto Rico in certain circumstances.

On what may be Chief Justice Fiol Matta’s last opinion as a member of the Supreme Court of Puerto Rico, on January 25, 2016, the Court issued an Opinion in Siaca v. Bahia Beach Resort & Gulf Club, case no. AC-2012-102, published opinion pending, holding that an employer’s breach of its duty to provide a private, hygienic and safe place for extracting breast milk in the workplace may amount to a violation of an employee’s right to privacy under the Constitution of Puerto Rico. Under the Constitution of Puerto Rico, an individual’s right to privacy is enforceable against private parties, including an employer.

The Siaca opinion is the first instance where the Supreme Court of Puerto Rico had the opportunity to interpret Law 427 of 2000, as amended by Law 239 of 2006, which are the local laws that require private sector employers to provide a period of up to one hour to employees for purposes of breastfeeding a child of up to twelve (12) months or extracting breast milk. Moreover, said statute, limits itself to establishing a duty on the employer to enable a location for said duties although Law 239 makes reference in its statement of legislative intent, to a place that is private, hygienic and safe for said purpose.

In the case at hand, the issue was whether the employer’s conduct in failing to provide an adequate place for extracting breast milk amounted not just to a violation of Law 427, as amended, which does not provide for damages, but also amounted to a violation of the employee’s right to privacy under the Puerto Rico Constitution, which would allow for damages to be awarded.

While the Supreme Court of Puerto Rico did not conclude that an employer must specifically designate a place that is exclusively used for breastfeeding or breast milk extraction, the Court did set forth that the area must afford sufficient privacy such as window covering, locks and be clean such as to avoid dust and other health risks.   Clearly, an office or storage area that is over crowded, with no ventilation or access to electricity is unlikely to be suited.

Moreover, the Court made clear that since the conduct in question was rather outrageous and resulted in actual damages to the Plaintiff because she had to end breastfeeding her child because she suffered depression that affected her ability to adequately produce breast milk and feed her child as a result of her employer’s failure to provide an adequate location for said activities, there was indeed a violation of the employee’s constitutional right to privacy.

Nonetheless, the Court made clear that not all violations of Law 427, as amended, amount to a constitutional violation.

In conclusion, it is important for employers to be proactive when it comes to designating a location for breastfeeding or breast milk extraction at the workplace.  Employer’s must ensure that other employees understand the private nature of such activity and that the place designated, even if an office, be neat and clean and not cramped,  and be properly ventilated, easily accessible from the place where the employee is assigned, has a sign and lock to avoid interruptions, and is kept clean and free from clutter.  Failing to provide an adequate place for breast milk extraction at the workplace which interferes with a mother’s choice to breastfeed her child will now result in an award of damages rather than a mere administrative fine.

We are available to assist you in your compliance efforts as it pertains to this opinion.  For more information, feel free to contact Carmen Lucía Rodríguez or Gerardo J. Hernández at clrodriguez@nrlawpr.com or ghernandez@nrlawpr.com.

Legal Update Volume 2016, Number 1

On December 31, 2015, Governor, Alejandro García Padilla, signed into law Law 251 of 2015 which amends the existing vacation and sick leave Act (Law 180 of 1998) in order to allow non-exempt employees working for employers with more than 15 employees and who have at least 5 days of sick time accrued, to use up to 5 days of sick leave per year to take care of an ill spouse, son or daughter (regardless of age), parents or any minor, elderly person (of 60 years of age and older) or disabled individual under their custody or tutelage. Just as it has been the custom with the use of regular sick leave, the employee using the leave for said purpose must only present a medical certificate when the absence is in excess of 2 days.

 

The bill, which was originally presented on January of 2013, and had been stalled for some time due to hefty opposition, is the latest of several constituent friendly legislation that may find its way to the Governor’s desk this election year.

 

We are available to assist you in your compliance efforts as it pertains to this new legislation.  For more information, feel free to contact Carmen Lucía Rodríguez or Gerardo J. Hernández at clrodriguez@nrlawpr.com or ghernandez@nrlawpr.com.