September 23, 2021

Volume XI, Number 266

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Puerto Rico Law Authorizes Pay Deductions as Repayment for Employer-Provided Emergency Aid

Puerto Rico is still reeling from the aftermath of Hurricane Maria. Recently, the governor of Puerto Rico signed into law Act No. 115 of June 20, 2018, to promote recovery efforts and provide much-needed aid to affected non-exempt employees in situations of emergency. Ordinarily, Puerto Rico law does not allow deductions from a non-exempt employee’s salary, except for specific purposes defined in Act No. 17 of April 17, 1931, as amended. Act No. 115 amends Article 5 of Act No. 17 to lengthen the list of authorized payroll deductions. Consequently, employers in Puerto Rico are now able to prospectively recoup, via salary deductions, any loan, salary advance, or the cost of any equipment, materials, or goods provided to their non-exempt employees to help them in situations where there has been an emergency declaration by the president of the United States, the Federal Emergency Management Agency (FEMA), or the governor of Puerto Rico.

Act No. 115 added section (q) to Article 5 of Act No. 17 to provide that a non-exempt employee and his or her employer may agree, in writing, that the employer will deduct a fixed amount from the employee’s salary, in each of the employee’s regular pay cycles, until the employee has fully repaid the employer, without interest, for any “loan, salary advance, or [the cost] of any equipment, materials, or goods provided by the employer, whose benefit, use, or enjoyment is directly related to situations in which a state of emergency has been officially declared”, as provided by Act No. 115.

The deduction may not be greater than 20 percent of the net amount of the non-exempt employee’s pay after all other legal deductions and/or employee-authorized withholdings have been made. Further, the written authorization must include a breakdown of the repayment and a provision on how the debt will be repaid in the event the employment relationship is terminated.

© 2021, Ogletree, Deakins, Nash, Smoak & Stewart, P.C., All Rights Reserved.National Law Review, Volume VIII, Number 212
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About this Author

Diana Nehro, Employment Attorney, Global, Ogletree Deakins Law FIrm
Shareholder

Ms. Nehro is the Deputy to the Chair of the International Practice Group of Ogletree Deakins and is based in the firm’s Boston office. Ms. Nehro assists clients in efficiently and effectively managing international labor and employment issues in an ever-expanding global economy. Ms. Nehro has experience in advising multinational clients in connection with the establishment and management of international workforces, including the preparation and enforcement of personnel policies and employment agreements, compensation and benefits, litigation avoidance and strategy, as well as general...

203-969-3100
Enrique Del Cueto-Perez, labor, employment, global, Ogletree Deakins Law FIrm
Associate

Enrique A. Del Cueto-Pérez is a full-time member of the International Practice Group of Ogletree Deakins, based in the firm’s Boston office, which assists multinational companies in efficiently and effectively managing labor and employment law issues in an ever-expanding global economy.

305-455-3706
Ryan Correia, Associate, Ogletree Deakins Law Firm, employment law, global
Associate

Mr. Correia is an Associate Attorney in the International Practice Group of Ogletree Deakins, which provides worldwide labor and employment law support to over 100 countries. He has experience in the international field through internships in Brazil and The Netherlands where he worked on projects including an internal investigation of a Brazilian company regarding kickbacks and the drafting of incorporation agreements. Mr. Correia is fluent in Spanish and proficient in Portuguese and focuses his practice on Latin America. On the domestic side, he interned at Fish and Richardson, an...

617-994-5720
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