Puerto Rico Employers Prepare for New Guidelines Governing Equal Pay in the Workplace

On August 10, 2017, the Puerto Rico Secretary of Labor and Human Resources issued and made effective the Uniform Guidelines for the Self-Assessment of Equal Pay in the Workplace (“the Guidelines”).  These Guidelines were enacted pursuant to the mandate of two separate pieces of legislation:  (1) Act No. 16-2017, enacted in March 8, 2017, creating Puerto Rico’s Equal Pay Act ("PR EPA"); and (2) Act No. 61-2017, signed into law on August 1, 2017, which requires certain government contractors to demonstrate compliance with the PR EPA. Specifically, Act No. 61-2017 requires that an employer seeking to contract with the Government of Puerto Rico for goods or non-professional services must provide evidence and certification that it maintains a compliant equal pay policy for employees who carry out comparable work, and that it has initiated or completed a self-assessment process of its compensation practices.  While both laws have been in effect since their approval date, employer liability for noncompliance will not commence until one year from their respective approval dates.  The purpose of this enforcement delay is to allow employers to complete self-assessments and to establish corrective measures.  It is here that the Guidelines come into play. 

Notably, while the Guidelines expressly state that they are not meant to establish substantive or procedural rights, nor impose employer obligations, both statutes expressly require that the Guidelines must be used when designing any self-assessment program.  Moreover, for employers interested in selling goods or non-professional services to Puerto Rico's Executive Branch or public corporations and municipalities, failure to comply may expose them to exclusion from the Exclusive Register of Bidders for one year. 

The Guidelines are very short and essentially provide general suggestions and examples of what an employer can do with respect to (1) recruitment, (2) classification plans, (3) bonuses and additional compensation, and (4) manuals and procedures, in order comply with the self-assessment requirements of Acts 16-2017 and 61-2017.  

In terms of recruitment, the Guidelines restate Act 16-2017’s prohibitions of asking potential employees about their current or past salary unless a work offer has been provided or the candidate voluntarily provided the information, and from requiring employees to abstain from discussing salary information with other employees. The Guidelines recommend that employers review their recruitment processes at least once a year, including the application forms used, and that they prepare a list of basic questions to be used during interviews.  Moreover the Guidelines suggest that the employers' agents and representatives keep current on matters of salary discrimination on the basis of gender through continuing education.  

As to classification plans, the Guidelines invite employers to establish plans that identify the minimum and maximum compensation for each job, as well as each position's requirements.  They further suggest that employers use something akin to a rubric demonstrating the incremental value that each added factor—such as seniority, education, training, and work experience—may add to an employee's salary in order to help eliminate subjectivity when making individual compensation decisions.  

Regarding bonuses and additional compensation, the Guidelines suggest that they be based on objective criteria including, but not limited to, the quantity of production, sales, savings, and earnings; quality of production; and attendance of trainings, seminars, or classes.

Finally, the Guidelines recommend that employers should revise and update their employee manuals, handbooks, and internal procedures to incorporate the changes set out in the new legislation.  

These are just some of the suggestions included in the Guidelines. Importantly, compliance with the Guidelines does not create a safe harbor for violations of any of Puerto Rico's gender discrimination laws.  

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.