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Puerto Rico Enacts Equal Pay Law, Prohibits Employers from Inquiring about Past Salary History

Almost two months after signing sweeping employment law reform, Governor Ricardo Rosselló has signed Puerto Rico Act No. 16 of March 8, 2017, known as the “Puerto Rico Equal Pay Act.” Act 16 is effective immediately.

Although modeled after the federal Equal Pay Act, Act 16 goes further, limiting instances in which employers can inquire into an applicant’s salary history, among other key provisions.

Pay Discrimination Prohibition. Like the federal Equal Pay Act, Act 16 establishes a general prohibition of pay discrimination based on sex among employees in jobs that require equal skill, effort, and responsibility, and that are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.

Past Salary History Inquiries Prohibited. Act 16 prohibits employers from inquiring into an applicant’s past salary history, unless the applicant volunteered such information or a salary was already negotiated with the applicant and set forth in an offer letter, in which case an employer can inquire or confirm salary history.

Pay Transparency. Act 16 forbids employers from prohibiting discussions about salaries among employees or applicants, with certain exceptions for managers or human resources personnel. It also contains an anti-retaliation provision protecting employees who disclose their own salary or discuss salaries with other employees, object to any conduct prohibited by the law, present a claim or complaint, or participate in an investigation under Act 16.

Remedies and “Self-Evaluation Mitigation.” Available remedies for victims of pay discrimination include back pay and an equal amount as a penalty. Double compensatory damages also are available as remedies. The additional back pay penalty can be waived if the employer demonstrates that, in the year prior to the presentation of a salary claim, the employer voluntarily undertook a “self-evaluation” of its compensation practices and made reasonable efforts to eliminate pay disparities based on sex. The self-evaluation or mitigating measures cannot be used as evidence of violation of the law for events that take place within six months after the self-evaluation’s completion or within one year of the self-evaluation if the employer has commenced reasonable and good faith mitigating measures. The Puerto Rico Secretary of Labor is tasked with preparing and distributing uniform guidelines for employer self-evaluations.

The Department of Labor is authorized to prepare interpretive regulations and must commence a statistical study into pay inequality among men and women. The federal EPA and its regulations will be used as reference in interpreting Act 16.

The penalty provisions of Act 16 will not be effective until March 8, 2018, to permit employers to take any mitigating measures.

Jackson Lewis P.C. © 2017

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About this Author

Maralyssa Álvarez-Sánchez, Jackson lewis, labor employment attorney, reasonable accommodation lawyer
Of Counsel

Maralyssa Álvarez-Sánchez is an Of Counsel in the San Juan, Puerto Rico, office of Jackson Lewis P.C. She counsels employers on compliance with state and federal employment laws in executing personnel decisions and defends employers in all stages of litigation in discrimination, retaliation, sexual harassment, reasonable accommodation, unjust dismissal and leave-related claims in federal and state judicial and administrative forums.

Ms. Álvarez-Sánchez has successfully defended claims against employers before the Puerto...

787-522-7314
Juan Felipe Santos, Employment Attorney, Jackson Lewis Law Firm
Office Managing Principal and Office Litigation Manager

Juan Felipe Santos is the Office Managing Principal and Office Litigation Manager in the San Juan, Puerto Rico, office of Jackson Lewis P.C. He has successfully represented employers in litigation before federal and Puerto Rico courts, including jury trials. Before joining Jackson Lewis when it opened the Puerto Rico office in 2013, Mr. Santos worked for over 10 years in other major law firms in Puerto Rico, devoting his practice exclusively to labor and employment law.

Mr. Santos represents clients through all phases and types of federal and local labor and employment lawsuits and administrative matters, ranging from individual charges and cases to broad-scale collective and class actions regarding wage and hour disputes, employment discrimination and harassment, retaliation, wrongful discharge, statutory leaves of absence, welfare benefits (ERISA), Railway Labor Act, defamation, non-compete covenants and other employment-related torts.

787-522-7315