News & Publications
The continuing Coronavirus (Covid-19) pandemic has prompted the Governor of Puerto Rico to issue one more Executive Order on April 12, 2020 that extends Executive Order No. 2020-023 of Sunday, March 15, 2020. Among other directives, the Executive Order extends the requirement that all businesses, except those specifically excluded in the Order, close their office operations, now until May 3, 2020. Until further notice, our offices remain closed during this period, but our professionals continue to be available to attend to your legal needs remotely. You may contact us by e-mail and telephone, and our professionals will respond as soon as possible. Thank you very much.
August 25, 2020
On August 25, 2020, the Puerto Rico Department of Health issued Regulation 9210, also known as the Regulation Establishing Preventive Measures for the Administration of the COVID-19 Pandemic and Administrative Fines for Noncompliance (the “Regulation”). This new emergency Regulation outlines the obligations of individuals and businesses and creates administrative fines against infractors.
August 10, 2020
On August 6, 2020, the Governor of Puerto Rico signed Law No. 90-2020, also known as the Workplace Harassment Act of Puerto Rico (the “Act”). This new law establishes a vigorous public policy against all types of workplace harassment.
April 14, 2020
Law 37 of April 9, 2020, amended the Minimum Wage, Vacation and Sick Leave Act of 1998 to create a new paid emergency leave.
August 6, 2020
The Puerto Rico Supreme Court recently ruled that clauses in extrajudicial separation agreements between employers and employees, in which his right to receive attorney’s fees is waived, are null and void. See: Berkan v. Mead Johnson Nutrition, 2020 TSPR 29. This may impact your employer’s organization much more than you may think.
August 4, 2020
On August 4,2020, judge J. Paul Oetken of the U.S. District Court for the Southern District of New York vacated some sections of the DOL Final Rule regarding eligibility for paid leave under the Families First Coronavirus Response Act (FFCRA). See: New York v. U.S. Department of Labor, U.S. District Court, Southern District of New York, No. 20-03020.
July 28, 2020
Federal contractors and subcontractors have until August 4, 2020, to incorporate the updated Voluntary Self-Identification of Disability Form (CC-305) into their applicant and human resources systems and processes.
June 5, 2020
On June 5, 2020, President Donald Trump signed into law the Paycheck Protection Program Flexibility Act of 2020 (“PPPFA”). The PPPFA modifies provisions related to the use and forgiveness of loans under the Paycheck Protection Program implemented in response to COVID-19.
May 28, 2020
On May 27, 2020, the U.S. Department of Labor (US-DOL) published its final rule allowing retirement plan administrators who wish to use electronic media, as a default, to furnish covered documents to covered individuals subject to the Employee Retirement Income Security Act of 1974 (ERISA).
June 2, 2020
Last night, Puerto Rico Governor Wanda Vazquez Garced signed into law Puerto Rico House Bill No. 1654, also known as the new Puerto Rico Civil Code (the “New Civil Code”). The New Civil Code replaces the Puerto Rico Civil Code of 1930, which had been in place for the last 90 years, although it had been amended numerous times, adapting to Puerto Rico’s evolving circumstances through the twentieth century and well into the twenty-first.
May 12, 2020
The U.S. District Court for the District of Puerto Rico announced that, effective May 11, 2020, all employees and visitors, including but not limited to members of the bar, press and public, will be required to wear a face mask or face covering the nose and mouth areas of the face while in the premises of the Clemente Ruiz Nazario United States Courthouse and the Federico Degetau Federal Office Building in Hato Rey, San Juan, Puerto Rico. This measure is part of a broader policy adopted by the Facilities Security Committee of the Federal Office Building in Hato Rey.
April 27, 2020
On April 24, 2020, the Puerto Rico Supreme Court (the “Supreme Court”) issued Resolution EM-2020-09 (the “Resolution”) allowing Puerto Rico attorneys who serve as notaries public to authorize transactions that would otherwise be permitted under the ordinary course of business. Under Puerto Rico laws and regulations, only attorneys can serve as notaries public; in addition to identifying parties to a transaction, they are also required to advise on public instruments they authorize. During the current emergency period, the Supreme Court had allowed notaries public to authorize only certain types of transactions which were deemed essential during the state of emergency declared by Governor Wanda Vázquez Garced on March 12, 2020, such as wills and powers.
April 15, 2020
In light of the continued emergency measures implemented by the Government of Puerto Rico, Secretary of State Elmer Román issued Administrative Order 2020-02 (“AO 2020-02”) which approved an additional emergency deadline extension for all 2019 annual report and annual fee filings before Puerto Rico Department of State. As you are likely aware, the Puerto Rico General Corporations Act requires that every corporation organized and/or authorized to do business in Puerto Rico file an annual report in the Puerto Rico Corporations Registry administered by the Puerto Rico Department of State on or before April 15th of each year. At the same time, limited liability companies are required to submit an annual fee payment on the same date. All entities must also submit their responses to an economic survey issued by the Puerto Rico Department of Commerce and Economic Development. Last month, the Puerto Rico Secretary of State issued Administrative Order 2020-01 which extended the 2019 annual report and annual due filing dates from April 15, 2020 to May 15, 2020.
April 01, 2020
The U.S. Department of Agriculture plans to spend $16 billion on direct payments to farmers, ranchers and producers “who experience unprecedented losses” during the coronavirus pandemic, Secretary Sonny Perdue said at a White House press briefing on Friday, April 17, 2020.
April 01, 2020
The Puerto Rico Department of Labor and Human Resources recently issued Circular Letter 2020-02 requiring any employer laying off employees or reducing work schedules to inform said employees about the availability of unemployment benefits. This notification must:
April 01, 2020
As a result of the global Coronavirus (Covid-19) pandemic, on March 15, 2020, the U.S. Court for the District of Puerto Rico issued an Order Concerning Proceedings Before the United States District Court of Puerto Rico (“the original emergency Order”), continuing all civil and criminal proceedings until March 30, 2020. Given the quarantine measures taken by Puerto Rico and federal governmental agencies, and the uncertainty of how long they will remain in place, the Court issued a separate Order on March 24, 2020 by which all civil and criminal proceedings in the District of Puerto Rico are continued until Wednesday April 15, 2020.
April 01, 2020
On February 19, 2020, the Puerto Rico Treasury Department (“PRTD”) issued Internal Revenue Circular Letter 20-08 (“CL 20-08”) to establish the rules on Qualified Disaster Assistance Payment (“Qualified Payments”) allowed under the Puerto Rico Internal Revenue Code (the “Code”) due to the emergency caused by the seismic activity that has been taking place in the Southern and Central Areas of the main island of Puerto Rico . On March 29, 2020, the PRTD issued Internal Revenue Circular Letter 20-22 (“CL 20-22”) to extend the provisions of CL 20-08 to Qualified Payments made as a consequence of the state of emergency declared by the Governor of Puerto Rico due to the effects of the Coronavirus (COVID-19) pandemic.
April 01, 2019
In a recent opinion, the U.S. Court of Appeals for the First Circuit (“First Circuit”) affirmed the grant of summary judgment by the District Court for the District of Massachusetts (“district court”) in favor of Orgill, Inc. (“Orgill”) in a copyright infringement case, holding that a copyright licensee giving an unrestricted right to grant sublicenses may do so without using express language. This seems to be the first time a federal Circuit acknowledges a copyright sublicense by implication.
March 31, 2020
The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) provides substantial economic stimulus to individuals, businesses, and hospitals because of the Coronavirus (COVID-19) pandemic. Under Title I of the CARES Act, qualifying businesses will be able to receive no-fee “small business interruption loans” at an interest rate not exceeding 4 percent without the need to provide personal guarantee or collateral.
March 30, 2020
Due to the current state of emergency declared by the Government of Puerto Rico under Executive Order EO-2020-020 (EO-20), and the threat posed by the spread of the SARS-COV-2 virus and the COVID-19 disease, the Puerto Rico Office of the Insurance Commissioner (“OIC”) has issued several Normative and Circular Letters addressed to the insurance industry in Puerto Rico requiring certain actions to deal with the crisis. The following is a summary of the actions taken by OIC:
March 27, 2020
As part of the ” Coronavirus Aid, Relief, and Economic Security Act ,” the ” CARES Act ” or “the Act,” signed into law on March 27, 2020, the Congress of the United States enacted additional benefits for “small business debtors” in bankruptcy reorganizations.
March 27, 2020
On March 20, 2020, we issued a Client Alert providing details about new deadlines announced by the Puerto Rico Treasury Department (“PRTD”) in Administrative Determination 20-05 (“AD 20-05”) due to the effects of the Coronavirus (COVID-19) pandemic. On March 24, 2020, the PRTD then issued Administrative Determination 20-09 (“AD 20-09”) repealing AD 20-03 and AD 20-05 and providing that NO interest s, surcharges or penalties will be assessed for a taxpayer’s failure to properly or timely file tax returns and related payments provided they are filed on or before the following NEW EXTENDED DEADLINES:
March 26, 2020
The continuing Coronavirus (Covid-19) pandemic has prompted the Governor of Puerto Rico to issue an Executive Order on March 26, 2020 that extends Executive Order No. 2020-023 of Sunday, March 15, 2020. Among other directives, the Executive Order extends the requirement that all businesses, except those specifically excluded in the Order, close their office operations, now until April 12, 2020. Our offices remain closed during this period, but our professionals continue to be available to attend to your legal needs remotely. You may contact us by e-mail and telephone, and our professionals will respond as soon as possible. Thank you very much.
March 26, 2020
The Families First Coronavirus Response Act (FFCRA or Act) requires employers to provide sick leave and expanded family and medical leave for reasons related to COVID-19.
March 25, 2020
As a result of the global Coronavirus (Covid-19) pandemic, on March 15, 2020, the U.S. Court for the District of Puerto Rico issued an Order Concerning Proceedings Before the United States District Court of Puerto Rico (“the original emergency Order”), continuing or suspending all civil and criminal proceedings until March 30, 2020. Given the quarantine measures taken by Puerto Rico and federal governmental agencies, and the uncertainty of how long they will remain in place, the Court issued a new Order on March 24, 2020 by which:
March 24, 2020
Following up on its Opinion of March 13, 2020, the Puerto Rico Department of Labor and Human Resources (PR DOL) published Opinion # 2020-02 of March 23, 2020 (“Opinion”) regarding compensation to exempt and non-exempt employees in the private sector during the state mandated quarantine, the applicability of vacation and sick leaves to exempt and non-exempt employees, and the recently enacted Families First Coronavirus Response Act of 2020.
March 23, 2020
The U.S. Treasury Department, Internal Revenue Service and the U.S. Department of Labor announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. The News Release also answers or clarifies some questions regarding the Families First Coronavirus Response Act.
20 de marzo de 2020
A tenor con las disposiciones de la Orden Ejecutiva No. 2020-23 emitida por la Gobernadora Wanda Vázquez Garced el 15 de marzo de 2020, la mayoría de los establecimientos comerciales y todos los servicios gubernamentales “no esenciales” cesaron operaciones hasta el 30 de marzo de 2020. Como consecuencia de este cierre gubernamental, el 19 de marzo de 2020, el Departamento de Estado de Puerto Rico notificó la Carta Circular 2020-01 la cual extiende hasta el 15 de abril de 2020 todo término, plazo y vencimiento de cualquier procedimiento ante el Registro de Marcas de Puerto Rico desde el 18 de marzo de 2020 hasta el 15 de abril de 2020.
March 20, 2020
We refer to our prior Client Alerts discussing Executive Order No. 2020-23 issued by Governor Wanda Vázquez Garced on March 15, 2020 which established a mandatory closing of most commercial establishments and non-essential governmental services through March 30, 2020. Given this mandatory governmental closing, the Puerto Rico Department of State issued Circular Letter 2020-01 on March 19, 2020, which extends to April 15, 2020 all deadlines, expiration dates and other terms in pending matters before the Puerto Rico Trademark Office from March 18, 2020 through April 15, 2020.
March 20, 2020
Our previous Client Alerts extensively discuss Executive Order No. 2020-23 (“EO 2020-23”) of Governor Wanda Vázquez Garced, dated March 15, 2020, that establishes a mandatory closing of most commercial establishments and non-essential governmental services through March 30, 2020.
March 19, 2020
The Puerto Rico General Corporations Act requires every corporation organized and/or authorized to do business in Puerto Rico to file an annual report with the Puerto Rico Corporations Registry of the Puerto Rico Department of State on or before April 15th of each year. At the same time, limited liability companies are required to submit an annual fee payment on the same date. All entities must also submit their responses to an economic survey issued by the Puerto Rico Department of Commerce and Economic Development.
March 19, 2020
Last night President Donald Trump signed into law H.R. 6201 (the “Bill”), a relief package initially introduced in the U.S House of Representatives that includes free testing for COVID-19 and emergency leave for workers. The Bill provides: (i) up to 2 weeks of paid sick leave to anyone who is either subject to federal, state or local quarantine, showing symptoms, exposed to the virus, seeking medical diagnosis, or trying to get a test or preventive care; and (ii) up to 12 weeks of paid family and medical leave for employees affected by the virus, to care for an individual subject to quarantine, or to care for a son or daughter whose school or child-care facility is closed due to coronavirus.
March 16, 2020
On March 15, 2020, the Governor of Puerto Rico issued Executive Order # 2020-23 which, among other things, establishes a curfew for all citizens between 9:00 p.m. and 5:00 a.m.; a fourteen (14) day mandatory quarantine period for any person suspected of exposure to COVID-19 or with related symptoms; and the mandatory closing of all commercial establishments commencing on March 15, 2020 at 6:00 p.m. until March 30, 2020. In addition to commercial establishments, the complete closing of operations is extensive to shopping malls, movie theaters, clubs, concert halls, theaters, game rooms, casinos, amusement parks, gyms, bars and any other similar place where people conglomerate. The following business are excluded from the closing restrictions: food sale establishments that provide drive-thru, carry-out or delivery services; wholesalers; pharmacies; supermarkets; gas stations; banks or financial institutions; elderly care centers; and any business in the distribution chain of food, medicine, medical equipment or fuel.
March 3, 2020
On March 2, 2020, the U.S. Environmental Protection Agency (EPA) issued the proposed National Pollutant Discharge Elimination System (NPDES) Multi-Sector General Permit (MSGP) for stormwater discharges associated with industrial activity. The proposed 2020 MSGP would replace EPA’s 2015 MSGP upon final issuance.
February 21, 2020
Has anyone forgotten Hurricane María? What about some of the benefits approved by the Government to assist employees in Disaster Areas? Well, the Government is on it again.
February 21, 2020
On February 13, 2020, the Puerto Rico Department of Labor and Human Resources (PR DOL) published Regulation # 9162 to create and administer its Pay Equality Program (“Program” or “PEP”). The main function of the Program is to enforce and promote employer compliance with the Equal Pay Act of Puerto Rico (“EPAPR”), Act No. 16 of 2017.
December 13, 2019
The U.S. Department of Labor (U.S. DOL) recently announced a Final Rule (29 CFR Parts 548 and 778) updating regulations governing regular rate requirements under the Fair Labors Standards Act (FLSA) to provide clarity and better reflect the 21st-century workplace. This Rule aims to promote compliance with the FLSA, provide appropriate and updated guidance, and to encourage employers to provide additional and innovative benefits to workers without fear of costly litigation. In addition, the Final Rule defines what forms of payment employers may include and exclude in the FLSA’s “time and one-half” calculation when determining overtime rates and clarifies other forms of compensation, including payment for meals periods and “call back” pay.
October 31, 2019
Despite the current political landscape, on October 22, 2019, the United States House of Representatives passed H.R. 2426 by a vote of 410-6, otherwise known as the “Copyright Alternative in Small-Claims Enforcement Act of 2019” (hereinafter “CASE Act”). It is currently awaiting review and approval by the United States Senate (S. 1273).
October 10, 2019
On October 8, 2019, the Governor of Puerto Rico signed the Employee Credit Information Protection Act (“Act 150”). Act 150 aims to curtail the alleged practice by employers to require credit information from employees and employment candidates as a condition of employment. According to the statute, this practice limits the access young professionals and average citizens have to an already limited employment market.
September 25, 2019
The U.S. Department of Labor (US DOL) updated and revised the overtime rule issued under the Fair Labor Standards Act implementing the exceptions from minimum wage and overtime pay requirements for executives, administrative, professional, outside sales, and computer employees. The final rule, to become effective on January 1, 2020, updates the earnings thresholds necessary to exempt executive, administrative, or professional employees from the FLSA’s minimum wage and overtime pay requirements, and allows employers to count a portion of certain bonuses/commissions towards meeting the salary level. In the final rule, the US DOL:
Client Alert: Proposed amendment to the Money Services Act to require filing with the Nationwide Mortgage Licensing System and Registry Forms and to limit the bond amount for offices opened in Puerto Rico
September 1, 2019
On March 31, 2019, the Puerto Rico Senate filed Senate Bill No. 1209 (P. del S. 1209) to standardize Puerto Rico’s money transfer system, which is regulated by Act No. 136 of September 21, 2010.
Client Alert: Recent amendments to Chapter 19 of the Puerto Rico Insurance Code prohibit payment of a lower fee than those established by the U.S. Centers for Medicare and Medicaid Services (“CMS”) and the termination or cancellation of a health provider contract without just cause
August 30, 2019
Earlier this month, the Governor of Puerto Rico signed into law Act No. 90 of August 1, 2019 to amend Section 7 and add a new Section 8 to Article 19.150 of the Puerto Rico Insurance Code as they relate to service provider agreements between health care service providers and health service organizations that provide Medicare Advantage plans in Puerto Rico.
August 6, 2019
Puerto Rico’s Act No. 2 of October 17, 1961, also known as the Labor Claims Summary Procedure Act (“Act 2”), provides an expedite procedure (“summary procedure”) for employees seeking to enforce their labor and employment rights. Act 2 specifically prohibits employers from filing counterclaims in cases filed under said summary procedure. While some employment advocates argue that Act 2 absolutely bars employers from countersuing, on July 26, 2019, the Puerto Rico Supreme Court (the “Supreme Court”), in Bacardi Corporation v. Torres Arroyo, 2019 TSPR 133, 202 DPR __ (2019), held that the prohibition against counterclaims in Act 2, does not bar employers from filing independent lawsuits against employees.
August 2, 2019
On August 1, 2019, the Governor of Puerto Rico enacted the “Act to Grant Special Leave for Employees with Situations of Domestic or Gender Violence, Child Abuse, Sexual Harassment in the Workplace, Sexual Aggression, Lewd Acts or Stalking” (the “Special Leave Act”).
July 17, 2019
For years, the business community, investors and entrepreneurs have asked for a streamlined permitting process to promote commercial activity in Puerto Rico. A recent amendment to the Puerto Rico Permitting Process Reform Act established a new ‘Single Permit’ to consolidate several authorizations currently required to operate a business into one.
July 16, 2019
In their latest term, the Supreme Court of the United States (“SCOTUS”) has issued various opinions on different issues on matters of intellectual property law. These issues range from the interpretation of the language of a statute to the infringement of constitutional rights. Marks previously branded as “immoral” or “scandalous” could now acquire trademark protection under the Lanham Act.
July 16, 2019
In its latest term, the Supreme Court of the United States (“SCOTUS”) issued several opinions on different issues on matters of intellectual property law. These issues range from the interpretation of specific language of a statute to the infringement of constitutional rights. As summarized below, federal agencies may not pursue the registration of a patent under any of the three (3) proceedings provided by the America Invents Act (“AIA”) because federal agencies do not fall under the definition of a “person.”
July 9, 2019
The United States Department of Labor (US-DOL) issued Opinion Letter FLSA 2019-7 (July 1, 2019) addressing if an employer is required to retrospectively recalculate the regular rate of pay if it pays a nondiscretionary bonus that is a fixed percentage of straight-time wages received by the employee.
June 26, 2019
Faced with the issue of the effect of a Debtor’s (or trustee’s) rejection of a contract under Section 365 of the Bankruptcy Code, in Mission Product Holdings, Inc. v. Tempnology, LLC, 597 U.S. ___ (2019), the United States Supreme Court settled a split among the circuits and held that a Debtor-licensor’s rejection of a trademark licensing agreement does not deprive the licensee of its rights to use the trademark. . Since such breach does not constitute a rescission that would have the effect of unwinding the rejected contract as if it never existed, all rights previously granted under the contract that would survive a breach of contract under applicable non-bankruptcy law, remain in place. The court also reasoned that if a Trustee, or a Debtor-in-possession, can use rejection of the executory contract to rescind previously granted interests, then rejection would become functionally equivalent to granting the powers of an avoidance action.
March 18, 2019
The US Department of Labor (DOL) has released a new opinion letter on the Family and Medical Leave Act (FMLA). See: FMLA 2019-1-A. As per the Opinion, some employers “voluntarily permit employees to exhaust some or all available paid sick (or other) leave prior to designating leave as FMLA-qualifying, even when the leave is clearly FMLA-qualifying”. Employers justify this practice because it observes an employment benefit or program that provides greater family and medical leave rights than those provided by the FMLA under the 29 C.F.R. §825.700.
Public-Private Partnerships Authority’s Proposed Regulation for the Procurement, Evaluation, Negotiation and Award of Partnership Contracts and Sale Contracts For the Transformation of the Electric System Under Act No. 120-2018, as amended
February 3, 2019
The Public-Private Partnerships Authority (P3 Authority) released a proposed regulation to establish the procurement, evaluation, selection, negotiation and award process for partnerships with respect to any function, service or facility of the Puerto Rico Electric Power Authority (PREPA) and sale contracts of PREPA assets related to energy generation. Among others, the proposed regulation provides guidance and procedures such as, but not limited to:
On January 20, 2019, the Puerto Rico Planning Board (PRPB) issued a Request for Proposals (RFP) for Project Management Services for Code Enforcement Grant (2019-0001-RFP-01). The PRPB is requesting proposals from project management firms to provide comprehensive services in managing development, implementation and administration (“Project Management Services”) for the Federal Post Disaster Code Enforcement Grant under the Hazard Mitigation Grant Program of the Federal Emergency Management Administration (the “Project”).
January 10 , 2019
In a case of first impression addressing the issue of termination of the automatic stay of proceedings against a debtor in bankruptcy under section 362 (c)(3)(A) by a U.S. Court of Appeals, the First Circuit concluded that Section 363(c)(3)(A) terminates the entire stay thirty days after the filing of a second petition, as to the actions against the Debtor, the debtor’s property, and property of the bankruptcy estate; when the debtor, or any party in interest, failed to successfully invoked the extension of the automatic stay permitted under section 363(c)(3)(B). In re Smith, Jr. 18-1573, (1st Cir., Dec. 12, 2018).
January 10 , 2019
With new technologies developing within the music and audio-recording industries, the U.S. Congress recently passed a bill known as the Music Modernization Act (MMA). The purpose of the bill is to modernize copyright-related issues for music and audio recordings in light of new technology such as digital streaming. The MMA is a consolidation of three separate bills that address different issues in copyright law.
December 28 , 2018
Catastrophic events are very challenging to property owners and insurance companies alike. After hurricanes Irma and Maria struck Puerto Rico, similarities to other events, like Katrina, were referenced by insurance companies to attempt to show the difficulties in processing the claims filed by its policyholders. The chaotic situation caused by the hurricanes moved the Puerto Rico government to enact several bills to amend the Puerto Rico Insurance Code.
November 20 , 2018
The Puerto Rico Senate introduced Senate Bill No. 696 for the stated purpose of reactivating the validity period of certain construction and land use permits. The Bill seeks to reactivate projects with construction and land use permits where construction was interrupted due to the Puerto Rico economic crisis. It also covers projects where construction had not yet begun if the applicable approvals were obtained.
November 2 , 2018
On October 31, 2018, the Puerto Rico Public-Private Partnership (P3) Authority issued a public notice on a Request for Qualifications (RFQ) for the Puerto Rico Electric Power Transmission and Distribution System (RFQ 2018-2). The P3 Authority in collaboration with the Puerto Rico Electric Power Authority (PREPA),is requesting Statements of Qualifications (SOQs) from companies and consortia interested in entering into a long-term P3 contract with PREPA. If implemented, the private partner will be responsible for management and operation of the electric power transmission and distribution (T&D) system of Puerto Rico and to assist with the procurements associated with, and the management and deployment of, federal funds assigned for the restoration of the T&D system (the “Project”) to achieve the following objectives:
October 10, 2018
The US Congress has authorized several appropriations to urban communities affected by a major disaster, including those located in Puerto Rico. These funds are allocated by the Secretary of the U.S. Department of Housing and Urban Development (HUD).
September 21, 2018
Puerto Rico employees hired before January 26, 2017, were partially grandfathered and their vacation and sick leave accrual rates remained unchanged after the approval of Law No. 4 (2017).
September 19, 2018
Several energy bills have been recently introduced in the Puerto Rico Senate. One of the most notable is Senate Bill No. 773 which promotes the creation of a comprehensive public policy on climate change.
September 11, 2018
The budding medical cannabis industry in Puerto Rico has shown significant growth in the last few years. The Regulatory Board of Medical Cannabis (Board) of the PR Department of Health (DOH) recently announced that it is implementing Phase II of the Inventory Traceability System of medical cannabis.
September 6, 2018
In a new effort to ban the use of plastic bags in Puerto Rico, the House of Representatives introduced Bill Number 1745. The House’s Bill removes polypropylene or polyethylene (non woven) bags from the definition of reusable bags.
September 5, 2018
The U.S. Department of Labor recently announced that its Family and Medical Leave Act (FMLA) certification forms and notices are valid for three more years. There are no substantive changes to the forms which will now be effective until August 31, 2021.
August 31, 2018
The United States Internal Revenue Service (“IRS”) published IR-2018-52 earlier this year announcing that the Offshore Voluntary Disclosure Program (“OVDP”) would be closing on September 28, 2018. The IRS now warns that the deadline is less than a month away.
August 27, 2018
During the session ending on June 30, 2018, the Puerto Rico Legislature approved a bill amending the Puerto Rico Pharmacy Law. It was recently signed into Law 186-2018 by the Governor of Puerto Rico. The amendment prohibits physicians, pharmacy benefit managers, manufacturers or distributors of medications, and health insurance companies from promoting or obtaining any economic benefits to prescribe certain prescription medications; provided that such prescription is against the medical criteria of quality or services established in federal and state laws and regulations applicable to the dispatch of medications. This conduct is also classified as a misdemeanor.
August 27, 2018
Employers may now directly access and download labor & employment posters issued by the Department of Labor and Human Resources of Puerto Rico. Some of these posters and brochures relate to: (i) Non-discrimination Policies; (ii) General Labor and Employment Provisions; (iii) Use of Social Security in the Workplace; (iv) PR OSHA; and (v) SINOT. Employers are required by local law to place these posters in visible areas. Previously, employers had to physically visit various offices of the Department of Labor, without guarantee of availability, to secure said publications.
August 20, 2018
Recently, the Supreme Court of Puerto Rico issued an Opinion where it held that the term of 120 days to serve process upon defendants may not be extended. The Opinion clarifies that courts have no discretion to extend the 120-day term that a plaintiff has to serve a defendant under the Puerto Rico Rules of Civil Procedure. Failure to comply with this term will result in the automatic dismissal of the complaint. The first dismissal will be without prejudice while a second failure to serve in re-filed cases will result in a dismissal with prejudice.
August 9, 2018
A bill to repeal the Law for Regulating the Telemedicine [Practice] in Puerto Rico and enact the new Law for the Use of Telemedicine in Puerto Rico was signed into law by the Governor of Puerto Rico on August 1, 2018.
August 9, 2018
Due to the recent catastrophic events of Hurricane Maria and Hurricane Irma and the importance of the insurance industry in Puerto Rico, the Govermment of Puerto Rico recently enacted Senate Bill No. 935 and House Bill No. 1330
July 26, 2018
I. Amendment to the Municipal Tax License (“Patente Municipal”)
Act 133 of 2018, a recent amendment to the Municipal Business License (“Patente Municipal”) Law, reduces the annual interest that may be accrued from any administrative or judicial credits or reimbursements payable by municipalities granted under the Law. The annual interest rate of six percent (6%) is reduced to three percent (3%) and such reduction became effective on July 10, 2018.
March 7, 2018
On February 27, 2018, the U.S. Internal Revenue Service published IRS Notice 2018-19 which extends relief provided under IRS Notice 2017-56 to residents of Puerto Rico and the U.S. Virgin Islands. In the wake of Hurricane Irma and Hurricane Maria, the IRS issued Notice 2017-56 to allow “bona fide residents” of Puerto Rico or the U.S. Virgin Islands to maintain their status for tax filing and reporting purposes in the event they had evacuated or could not return due to the resulting aftermath.
February 6, 2018
In its February 5, 2018 letter to Governor Ricardo Rosselló the Financial Oversight and Management Board (FOMB) submitted to the government its recommendations regarding the reforms which should be implemented by the Government in order, according to the FOMB for Puerto Rico, to become a more attractive venue for business and economic growth. The Board’s proposals for reform in the labor area would result in significant changes to the Labor Transformation and Flexibility Act signed into law on January 26, 2017 as well as to other standing local labor legislation.
February 2, 2018
Employers will have to review the criteria used when evaluating employees’ performance. A recently enacted law which amends Article 6 of the Law No. 180-1998, known as the “Puerto Rico Minimum Wage, Vacation, and Sick Leave Act”-provides employees greater protection when their absence from work is backed by a medical certificate. The law states that private sector employers may not consider sick leave to measure non-exempt employees’ efficiency in annual performance evaluations.
October 30, 2017
On September 18, 2017, the Puerto Rico Department of Labor and Human Resources (the “PR DOL”) enacted a Regulation regarding the Puerto Rico’s Christmas Bonus Act, Act No. 148 of 1969. Such Regulation supersedes all prior regulations on the subject and establishes guidelines on implementation of the Christmas Bonus Law as amended by the Labor Transformation and Flexibility Act, Act No. 4 of 2017 (the “LTFA”).
October 19, 2017
The devastation caused by Hurricane María has left most of the island without the necessary power to continue business operations. As a result, businesses have and continue to rely upon power generators to meet their operational energy demands until the Commonwealth’s power grid is restored. Power generators are considered air emission sources that may be subject to permitting, operational, recordkeeping and reporting standards under applicable federal and local regulations. In view of these requirements, the P.R. Environmental Quality Board (EQB) issued Resolution R-17-22 on September 18, 2017 to establish the EQB’s policy regarding power generators, noise pollution control and solid wastes while the recovery efforts continue and the power service remains unavailable.
October 19, 2017
On September 26, 2017, the U.S. Environmental Protection Agency (EPA) waived certain requirements of the Clean Air Act to allow the sale, distribution, and use in Puerto Rico of high sulfur heating oil and marine fuel designated for use in Emission Control Areas (ECA marine fuel) for emergency generators and pumps, in view of the damages caused by Hurricane Maria and the limitations to obtain Ultra Low Sulfur Diesel (ULSD) meeting the 15 parts per million (ppm) standard set forth at 40 C.F.R. § 80.51 O(c)(l). This waiver continued through October 15, 2017.
October 19, 2017
On October 17, 2017 the Puerto Rico Secretary of Labor and Human Resources (“Secretary”) issued Opinion No. 2017-001 (“Opinion”) regarding the compensation of exempt and non-exempt private sector employees for workdays interrupted caused by Hurricanes Irma and María.
October 17, 2017
Given the passage of Hurricane María over Puerto Rico and the dire situation faced by taxpayers, the Puerto Rico Department of the Treasury (“Treasury”) has issued Informative Bulletin 17-24 (“IF 17-24”) on October 15, 2017, ordering all employers to suspend any tax lien proceedings or enforcements over employee salaries in favor of the Treasury for a term of ninety (90) days. This suspension shall be extendable to any amounts that are considered a lien in favor of the Secretary of the Treasury, or any other withholding on salaries established as part of a payment plan with the Treasury.
October 6, 2017
On October 4, 2017 the Department of the Treasury issued Administrative Determination No. 17-21 (“AD 17-21”) establishing a temporary tax exemption on payments made by an employer to its employees to help repair or compensate for damages and losses suffered as a consequence of Hurricane Maria.
August 24, 2017
On February 21, 2017 the Puerto Rico Legislature approved Act 14, 2017, the Incentives Act for the Retention and Return of Medical Professionals (“Act No. 14-2017” or “Act”). The purpose of the Act is to retain and attract medical professionals to the island by providing them with a fixed income tax rate of 4%. Recently, the Department of Health issued Circular Letter No. 1-2017 (1) and the Department of Economic Development and Commerce approved the Regulation under Act 14-2017 which provides guidance on the process and documentation required to obtain a Tax Exemption Grant under such Act.
August 7, 2017
The Puerto Rico Treasury Department (the “Department”) has issued Administrative Determination Number 17-07 (“AD 17-07”) to provide guidance to merchants following recent amendments to Sections 4042.03 and 4042.04 of the Puerto Rico Internal Revenue Code of 2011 (the “Code”).
The Municipality of Caguas (“Caguas”) has approved Municipal Ordinance No. 37 (“Ordinance”) to establish a temporary Municipal Business Contribution (“Aportación Empresarial Municipal” or “AEM” for its Spanish acronym) of zero point thirty-five percent (.35%) of its Volume of Business to businesses and individuals that are subject to the Municipal License Tax (“Patente Municipal” for its Spanish name) or have the obligation to declare a Volume of Business in Caguas of Three Million Dollars ($3,000,000) or more for the calendar year previous to the effectiveness of the AEM.
The Puerto Rico Public-Private Partnerships Authority has announced a number of projects or proposed projects that may be of interest to some of you. Following is a list of some of them.
The Department of Labor and Human Resources of Puerto Rico, in accordance with Section 2.19 of Act No. 4-2017, known as the Labor Transformation and Flexibility Act (“LTFA”), has enacted the Regulation to Implement Religious Accommodation in the Workplace (the “Regulation”). This Regulation, as its name implies, establishes guidelines and procedures regarding religious accommodation in the workplace.
Section 2.19 of the LTFA requires employers to reasonably accommodate the religious practices of employees or potential employees, unless doing so would create an excessive and undue hardship. As per the Regulation, the employer bears the burden of proving that a specific accommodation would result in greater costs, impair workplace safety, negatively impact the employee’s responsibilities, or that any other alternate accommodation would be unreasonable under the circumstances. In addition, an employer may not simply refuse religious accommodation based on the presumption that other employees with the same religious beliefs and/or practices would request similar accommodation.
Employees seeking religious accommodation must do so in writing and with reasonable anticipation. The written request must include: 1) a description of the religious practice; 2) frequency; and 3) the requested accommodation. The employer must provide a definitive response within seven (7) days upon receiving the request, unless the employee’s religious practice requires a shorter term. Failure by the employer to provide an answer within said term will be considered as granting the requested accommodation.
|Disclose Now or Forever Lose Your Tax Credits: Government of Puerto Rico Issues New Electronic Disclosure Requirements for Certain Tax Credit Holders|
On March 7, 2017 the Puerto Rico Fiscal Agency and Financial Advisory Authority (“FAFAA”) issued Administrative Order 2017-01 (hereinafter, “AO 2017-01”), which limited the authority of the Government of Puerto Rico to issue new tax credits and ordered the Secretary of the Puerto Rico Treasury Department (hereinafter, “Secretary” and “Treasury”, respectively) to prepare an inventory of outstanding tax credits that had been granted by Treasury. Pursuant to AO 2017-01, these tax credits must be disclosed by their holders as a condition to claim (or sell) the credits. As required by the FAFAA in AO 2017-01, Treasury published Internal Revenue Circular Letter 17-07 (“CL 17-07”) on April 12, 2017 which explains the procedure to electronically report the ownership of certain tax credits.
Please note that failure to electronically file Form 480.71 by May 15, 2017 will deprive any Holder (as defined below) of their right to claim or sell a Granted Credit in their income tax return for taxable year 2016 and subsequent taxable years.
Below we have included a brief summary of CL 17-07, including a list of the laws that authorize the issuance of tax credits that are now under FAFAA’s review and need to be timely disclosed.
The Puerto Rico Fiscal Agency and Financial Advisory Authority (“AAFAF”), the Government of Puerto Rico (the “Government”), and each of their respective officers, directors, employees, agents, attorneys, advisors, members, partners or affiliates (collectively, with AAFAF and the Government instrumentalities the “Parties”) make no representation or warranty, express or implied, to any third party with respect to the information contained herein and all Parties expressly disclaim any such representations or warranties. The Government has had to rely upon preliminary information and unaudited financials for 2015 and 2016, in addition to the inherent complexities that are part of a government in transition, especially after a prolonged period of public finance obscurity. As such, AAFAF and the Government have made certain assumptions that may materially change once more clarity and transparency takes hold, especially after the Government issues the past due audited financials for 2015 and 2016 later this year.
The Parties do not owe or accept any duty or responsibility to any reader or recipient of this presentation, whether in contract or tort, and shall not be liable for or in respect of any loss, damage (including without limitation consequential damages or lost profits) or expense of whatsoever nature of such third party that may be caused by, or alleged to be caused by, the use of this presentation or that is otherwise consequent upon the gaining of access to this document by such third party.
This document does not constitute an audit conducted in accordance with generally accepted auditing standards, an examination of internal controls or other attestation or review services in accordance with standards established by the American Institute of Certified Public Accountants or any other organization. Accordingly, the Parties do not express an opinion or any other form of assurance on the financial statements or any financial or other information or the internal controls of the Government and the information contained herein.
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.
Government’s New Minimum Wage
On March 2, 2017, Governor Rosselló-Nevares signed Executive Order 2017-026 increasing the minimum wage to employees in the central government from $7.25 to $8.25 per hour. This increase is to be implemented at the beginning of the next fiscal year on July 1, 2017.
In addition, the Executive Order provides that government contractors in the construction industry must certify that their employees are paid in compliance with the minimum wage. That is, as of July 1, 2017, government contractors will have to certify that their employees earn no less than $8.25 per hour.
The Executive Order also states that the administration’s goal is to progressively increase the minimum wage to employees in the central government until it reaches a pay rate of $10.00 per hour, requiring all government contractors in the construction industry to do the same.
In addition to Executive Order 2017-026, Governor Rosselló-Nevares stated that he intends to issue another Executive Order establishing a Committee that will be in charge of raising Puerto Rico’s Minimum Wage.
We at Goldman remain committed in assisting you and your business to adjust to these forthcoming changes in the Law. For further information, or detailed legal advice you may contact any of the attorneys in the Labor Department.
Government Enacts New Tax Incentives to Retain Physicians in Puerto Rico
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Labor Transformation and Flexibility Act
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