Puerto Rico: The New Equal Pay Act Brings Gender Equality Issues to the Forefront with Employers

Equal Pay
The Act prohibits pay discrimination based on sex for employees performing comparable job functions or duties requiring the same skill, effort or responsibilities under similar working conditions. Exceptions to this provision are based on (1) a bona fide system that rewards seniority or merit; (2) a compensation system based on quantity/quality of production, sales or profits; (2) education, training, or experience to the extent these factors are reasonably related to the work in question; or (4) any other reasonable factor not related to sex.

Prohibited Practices

1. Employers are prohibited from inquiring into an applicant, employee or former employee’s current or past salary history. Applicants or employees may voluntarily disclose salary information after salary negotiation has been completed and an offer of employment made.
2. Employers may not condition employment on disclosure of such salary information. Similarly, employment cannot be conditioned on the applicant or employee’s discussion or disclosure of their own or others’ salary information. Positions with access to compensation information (e.g., payroll, human resources administration) may be prohibited from disclosing others’ compensation information without written consent.
3. Employers may not retaliate against employees who address or discuss pay inequality, which may include: divulging the employee’s own salary or asking about or discussing others’ salaries; objecting to any process that is declared unlawful by the Act; filing a complaint; or participating in any investigation against the employer due to violations of the Act.

Though the Act is effective immediately, the employer penalties set forth in the Act will not take effect until March 8, 2018. This one year window is intended to provide employers time to implement fair pay practices in the workplace.

Action Items

1. ManagEase can help! Contact Anabel Tarzian, Director of Client Services, at (888) 230-3231 or atarzian@managease.com to engage ManagEase’s services for compensation audits, compensation structuring, or compensation market surveys.
2. Arrange for training of staff members who make compensation-related decisions.
3. Arrange for an audit of employee job descriptions and compensation rates to confirm that they are in compliance with the new regulations.