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Equal Pay Act of Puerto Rico, Law No. 16-217

March 2017

On March 8, 2017 Governor Ricardo Rosselló-Nevares signed into law the Equal Pay Act of Puerto Rico, Law No. 16-2017 to eradicate salary inequality between men and women who perform comparable job functions in the workplace. It prohibits discrimination based on sex against employees who perform work with equal functions that requires the same skill, effort, and responsibilities under similar working conditions, unless such differences are due to: i) a bona fide seniority or merit system; ii) a compensation system based on production volume or quality sales or profit; iii) education, training, or experience reasonably related to a job in particular; and iv) any other reasonable factor other than the person's sex.

Non-complying employers face a wide range of obligations and penalties. For example, the employer may not equalize the salaries by reducing the compensation of other employees. Also, the employer cannot impose as a condition of employment or job retention that the candidate or employee refrains from disclosing his or her salary or from requesting information about other employees' salaries.

This law also establishes that any employer who incurs in wage discrimination will pay the discriminated employee any unpaid salary gap and an equal amount as penalty, plus expenses and attorney fees.

An employer can avoid financial liability if one year before a claim is presented, an evaluation of its compensation practices is made in order to start a bona fide process to eliminate gender based wage inequality.

The statute also has a retaliation prohibition to protect employees that: (i) claim discrimination against the employer; (ii) reveal their salaries; or (iii) offer testimony against the employer as part of an investigation for violations under the Equal Pay Act. An employer who incurs in retaliation practices against an employee will be liable for double the damages awarded to the employee.

The Equal Pay Act has a statute of limitations of one year, beginning on the date the employee knew of the employer's violations with its provisions.

Lastly, although the law was signed on March 8, 2017 and effective immediately, employer's liability is deferred one year, in order to allow them to implement the necessary corrective measures to be in compliance with the Law.

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