Search form

Will the DOL’s Final Rule Amending Overtime Regulations for ‘White Collar’ Workers Apply to Puerto Rico?

By Juan Felipe Santos and Jeffrey W. Brecher
  • May 23, 2016

On the same day the U.S. Department of Labor released its Final Rule updating regulations under the Fair Labor Standards Act (“FLSA”) governing overtime exemptions for executive, administrative, and professional employees (commonly known as the “white collar exemptions” or “EAP exemptions”), a bill was introduced in the U.S. House of Representatives that would delay implementation of the Final Rule in Puerto Rico for at least two years after enactment of the bill, until certain conditions are met. (For details on the Final Rule, see our article, Labor Department Announces Final Rule Amending Overtime Regulations for ‘White Collar’ Workers.)

Representative Sean P. Duffy (R-Wis.) introduced the “Puerto Rico Oversight, Management, and Economic Stability Act” (“PROMESA”), H.R. 5278, to establish an Oversight Board to assist the Government of Puerto Rico in managing its public finances and for other purposes. Section 404 of PROMESA establishes that the DOL’s Final Rule shall have no force or effect in Puerto Rico until:

  1. The Comptroller General of the United States completes an assessment and transmits a report to Congress assessing the impact of applying the regulations to Puerto Rico, taking into consideration regional, metropolitan, and non-metropolitan salary and cost-of-living differences. The report should be submitted not later than two years after the enactment of PROMESA.
  2. The Secretary of Labor, taking into account the assessment and report of the Comptroller General, provides a written determination to Congress that applying such rule to Puerto Rico would not have a negative impact on the economy of Puerto Rico.

If PROMESA is enacted into law as is, the Final Rule would not apply to Puerto Rico for at least the next two years, until these requirements are met. However, PROMESA faces opposition from different groups and the likelihood of passage of the House bill in its present form is uncertain.

Section 403 of PROMESA also amends the FLSA to allow employers in Puerto Rico to pay employees aged 25 or younger, who are employed initially after the enactment of PROMESA, a wage which is not less than $4.25 an hour. But an employer may not take any action to displace employees (including partial displacements, such as reduction in hours, wages, or employment benefits) for purposes of hiring individuals at the $4.25 rate. Any employer disregarding this prohibition shall be considered to have violated the non-retaliatory provisions found in section 15(a)(3) of the FLSA.

The San Juan, Puerto Rico, office of Jackson Lewis will continue to monitor PROMESA and report on any developments and implications on Puerto Rico wage and hour laws.

For further information on the Final Rule or whether the same will be applicable in Puerto Rico, please contact the Jackson Lewis attorney with whom you regularly work.

©2016 Jackson Lewis P.C. This Update is provided for informational purposes only. It is not intended as legal advice nor does it create an attorney/client relationship between Jackson Lewis and any readers or recipients. Readers should consult counsel of their own choosing to discuss how these matters relate to their individual circumstances. Reproduction in whole or in part is prohibited without the express written consent of Jackson Lewis.

This Update may be considered attorney advertising in some states. Furthermore, prior results do not guarantee a similar outcome.

Jackson Lewis P.C. represents management exclusively in workplace law and related litigation. Our attorneys are available to assist employers in their compliance efforts and to represent employers in matters before state and federal courts and administrative agencies. For more information, please contact the attorney(s) listed or the Jackson Lewis attorney with whom you regularly work.

See AllRelated Articles You May Like

November 15, 2017

2018 Minimum Wage Rate Increases: Are You Ready?

November 15, 2017

The federal minimum wage has remained stagnant at $7.25 an hour since 2009. In the absence of an increase to the federal minimum wage, an increasing number of states, cities, and other municipalities have enacted statutes providing for minimum wage rates in excess of (and, in some cases, more than twice as high as) the federal rate.... Read More

November 14, 2017

New York Department of Labor Proposes Scheduling Regulations

November 14, 2017

Big changes may be in store for employers in New York who require employees to be “on call” or who are accustomed to making quick changes to employee schedules, including canceling shifts when customer or client demand changes. On November 10, 2017, the New York State Department of Labor (NYDOL) released the text of anticipated... Read More

November 8, 2017

New York City Issues Proposed Rules for Fast Food, Retail Workers Scheduling Law

November 8, 2017

The New York City Department of Consumer Affairs (DCA) has issued proposed rules for the implementation of the Fair Workweek Law in an attempt to clarify and assist employers with compliance. The Law is intended to reform scheduling practices for fast food and retail workers in the City and will go into effect on November 26, 2017.... Read More