SCMP Breaking News - Labor & Employment
Year 8, Vol. 10 - November 13, 2023
On September 8, 2023, the U.S. Department of Labor (DOL) issued a “Notice of Proposed Rulemaking (NPRM), Defining and Delimiting the Exemptions for Executive, Administrative, Professional, Outside Sales, and Computer Employees”. The NPRM proposes, among other things, to increase the current salary threshold requirement for exempt employees under the Fair Laboral Standards Act (FLSA) to $1,059 per week (or $55,068 per year).
While the salary threshold requirement had previously been increased by the U.S. Department of Labor from $455 per week to $684 per week in 2019, at that time, Puerto Rico was explicitly excluded from such salary increase. Accordingly, the salary threshold requirement for exempt employees in Puerto Rico pursuant to the FLSA presently continues to be $455 per week or $23,660 annually. Yet, the new NPRM would apply to Puerto Rico.
Interested persons were invited to submit written comments regarding the NPRM on or before November 7, 2023.
On November 7, 2023, the Puerto Rico Department of Labor and Human Resources (DTRH) sent a letter to the DOL rejecting the NPRM. According to the DTRH’s letter, the proposed increase to the salary threshold requirement for exempt employees is untenable in Puerto Rico based on “the lack of solid economic growth in the Gross Domestic Product (GDP) of Puerto Rico, the marked wage disparity, and the risks it poses to future investments in the island's business sector.” Furthermore, the DTRH cited an economic study conducted by the consulting firm DevTech, which preliminarily proposed that the salary threshold requirement for exempt employees in Puerto Rico be increased by only 30%, from $455 per week to $590 per week.
We will now have to wait and see whether the DOL adopts the DTRH’s counterproposal for the salary threshold requirement increase for exempt employees in Puerto Rico.
SCMP will keep you updated as to any developments regarding this very important and crucial matter for employers in Puerto Rico.
Should you require further advice or assistance in relation to this matter, please contact us at (787) 945-0380.
Because of the general nature of this newsletter, nothing herein should be construed as legal advice or a legal opinion. SCMP Breaking News and all its content is property of Silva-Cofresí, Manzano & Padró, LLC
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