Employees’ Compensation Following the Earthquake Situation in Puerto Rico

Since late December 2019, a series of earthquakes and aftershocks have struck the southwest region of Puerto Rico, causing many structures to collapse or to sustain severe structural damage. Intermittent electrical service, particularly in the southwest region, has also occurred. Given the impact these events have had on private-sector employers that operate or have facilities in this region, Opinion No. 2017-001 issued by the Puerto Rico Secretary of Labor on October 17, 2017, after Hurricanes Irma and María, provides guidance regarding compensation for exempt and non-exempt employees for workdays interrupted by these natural events.

Non-Exempt Employees

In the Opinion, the Secretary explains that pursuant to the federal Fair Labor Standards Act (FLSA), non-exempt employees are entitled to compensation for hours worked only. Employers are not required to pay the hours that non-exempt employees would have worked had the natural disaster not occurred. Employers should keep in mind, however, that hours worked also include: (1) hours the employee is allowed to perform work that benefits the employer even when the employer has not required the employee to do so; (2) hours worked remotely or outside the regular place of employment; and (3) the waiting time of an employee. For example, compensable time under the waiting time provision typically would include the hours in which employees have reported to work and cannot perform their duties because there is no water, electricity, internet or some other factor that prevents them from doing their work, but the employer requires them or allows them to remain in their work area pending the resumption of these services.

Although the Secretary recognizes that there is no legal obligation to do so, following the pressing circumstances surrounding the 2017 hurricanes, the Secretary encouraged employers to pay the wages of their non-exempt employees even if they did not work, and to not deduct these payments from otherwise paid leave. We anticipate the same approach would apply today in the context of the earthquakes.  Alternatively, employers may credit the hours non-exempt employees do not work against accrued but unused vacation leave. Also, where applicable, at the employee's voluntary request, employers may credit these hours against any other paid leave to which employees may be entitled pursuant to internal policies.

Exempt Employees

The Secretary explains in the Opinion that the FLSA requires employers to pay exempt employees in full for each week of work in which the employee performs any work, regardless of the hours actually worked (with limited exceptions). If an employee does not perform any task or work any hours during a particular week, the employer is not required to compensate the employee for that particular week. Consequently, employers that ceased operations for less than a week due to the earthquake must pay for the entire workweek, if the employee performed any work-related task during that week. However, the Secretary states in the Opinion that if the employer’s workplace is open and the employer calls an exempt employee back to work, but the employee is absent for one or more full days due to personal reasons such as sickness, bad weather, impassable roads, lack of fuel access, or transportation problems, the employer may deduct those full days from the employee’s weekly salary.

The Opinion also encourages employers to explore possibilities for exempt employees to receive full pay during the emergency period regardless of whether they performed work during a particular week by charging those days to any paid leave available pursuant to company policies.

Finally, the Secretary recognizes that private employers can provide greater benefits than those established by law via employment contracts or collective bargaining agreements. Under any such scenario, compensation for either exempt or non-exempt employees should be made pursuant to the terms of these contracts or agreements, and in the employee’s favor.

Just two years after the devastating effects of Irma and María, these latest natural disaster events have had a substantial emotional impact on the Puerto Rican population.  Accordingly, individual employee situations or concerns should be evaluated on a case-by-case basis in order to account for extraordinary circumstance not addressed by the above discussion.

Information contained in this publication is intended for informational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.