SCMP Breaking News - Labor & Employment
Year 9, Vol. 7 - June 13, 2024
On June 12, 2024, the Minimum Wage Evaluation Commission announced that it had approved the increase of the local minimum wage to $10.50 per hour. The increase will go into effect on July 1, 2024, as established by Law 47, Puerto Rico Minimum Wage Law enacted on September 21, 2021.
Law 47-2021 established an increase in the local minimum wage in phases, as well as the creation of the Minimum Wage Evaluation Commission, under the auspices of the Department of Labor and Human Resources (DTHR), to evaluate and determine the relevant adjustments to the local minimum wage.
Specifically, Law 47-2021 established the following increases to the local mínimum wage:
To $8.50ph from January 1, 2022 on;
To $9.50ph from July 1, 2023 on; and
To $10.50ph from July 1, 2024 on.
Given that the Minimum Wage Evaluation Commission had not made any determination regarding the increase in the minimum wage that Law 47-2021 had established for July 1, 2024, there was much uncertainty about whether the $10.50 minimum wage increase would go into effect by July 1, 2024.
However, yesterday's announcement firmly established that employers must implement the minimum wage increase as of July 1, 2024. The Minimum Wage Evaluation Commission stated that its decision to approve the minimum wage increase to $10.50 per hour was based on a report issued by the firm Abexus Analytics, which evaluated the impact of the minimum wage increase using data from the DTRH, the Quarterly Census of Employment and Wages, the Department of the Treasury's corporate income tax returns, and the inflation rate, among other criteria.
According to the Minimum Wage Evaluation Commission, its analysis also included simulations on the increase in the workforce, the closure of businesses and the effect on inflation with different hypothetical increases. In its announcement, the Minimum Wage Evaluation Commission emphasized “the importance of guaranteeing fair and equitable remuneration for all workers on the island.”
What should employers do?
Make the necessary changes and adjustments to their payroll systems and processes to ensure that they are prepared and ready to implement the minimum wage increase for hourly employees from $9.50 to $10.50 per hour starting on July 1, 2024.
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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