Department of Labor and Human Resources Secretary Opinion No. 2020-02

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I. COMPENSATION OF NONEXEMPT EMPLOYEES DURING CURFEW

During the emergency due to COVID-19, employers are encouraged to pay the salary of their nonexempt employees without charge to any license so their basic needs may be attended during this time of isolation, without affecting their accumulated balances.  If the employers cannot pay the full ordinary wages of nonexempt employees who do not work during this period, for economic reasons, nothing prevents employers from offering partial compensation, bonuses or other remuneration that they consider by mere liberality, in order to help employees during the emergency.

In the event that employers cannot voluntarily compensate the time not worked during the period of the lockdown of operations, they may charge the hours not worked to the vacation leave of nonexempt employees. However, if the employee objects to such charge being made to the vacation leave, the employer may not charge it. The Secretary clarifies that this mechanism is only used as an extraordinary measure in this atypic case to guarantee that non-exempt employees receive their compensation in full, and in consideration that if the nonexempt employee objects said charge, they could not get paid at all.

At the same time, the employer may allow nonexempt employees to charge the period of time to any other leave to which they are entitled, such as sick leave, if requested by the worker. Accreditation to these licenses can be voluntarily granted as a first option or conferred once the available days of the vacation license have expired.

Regarding the probationary period, nonexempt workers accumulate vacation leave retroactively once they have completed six (6) months in employment. Therefore, after that period of time is completed,  the employer can discretionally allow the enjoyment of the vacation license, even if there is still time left to complete the entire period. The retroactivity of the accumulation of vacation leave refers to the fact that the employee will accumulate from his beginning at work, but will not see his balance reflected nor will he be entitled to its liquidation until he completes six (6) months of the probationary period or until he approves the probationary period of less than six (6) months agreed with your employer.

On the other hand, employees who are on probationary period have the right to use sick leave as soon as it is accumulated. In the event that these employees use any of the licenses authorized by law, be it vacations, sick leave, or any other special leave, the employees’ probationary period will be automatically paused and will resume once they return to work.

The Secretary stresses that nothing prohibits an employer from providing additional and more flexible benefits in favor of employees.

II. COMPENSATION OF EXEMPT EMPLOYEES DURING THE CURFEW

In general, exempt employees are excluded from the legal provisions on some benefits, such as the accumulation of sick and vacation leave. Therefore, the rights of these employees are those that arise from the individual employment contract, from agreements with their employers and from the manuals and policies of the company.

Exempt employees have to be compensated for each work week in which they perform a task and regardless of the hours they work, even if it is only part of a day, since their contract is based on a guaranteed fixed salary. The employer may discretionally charge the hours or days in which the exempt employee did not carry out any work on the licenses that are available as part of the benefits that are voluntarily provided, if there is no agreement to the contrary and as long as the employee receives the same salary to which is entitled. Employers have discretion to establish how it will be accrued and enjoyed.

On the other hand, if the exempt employee does not perform any task in a full work week during the work break period, either in person or remotely, employers are not required to compensate for it. However, the employer may discretionally charge that week to any leave to which the exempt employee is entitled, such as vacation, as long as there is no agreement to the contrary; or may voluntarily compensate said week without charge to any benefit.

Employers are encouraged to pay the wages of their exempt employees in full, even when they have not performed any type of work during any of the weeks of the curfew. If this is not economically viable or the employees do not enjoy any leave that is granted voluntarily, employers may discretionally grant some type of additional compensation, bonuses or other remuneration that is carried out by mere liberality, with the aim of not affecting the livelihood that workers need to face the current situation, as well as any emergency that may arise as a consequence of it.

III. NEW APPLICABLE LICENSES UNDER FEDERAL LAW

As of April 2, 2020, the following licenses will be required and will expire on December 31, 2020:

(1) Emergency Paid Sick Leave Act of 2020, 29 USC sec. 2601

These new paid leaves apply to all employees, including those on probation who work for private employers with less than five hundred (500) employees. Employers must provide this leave when the employee is unable to work, including remotely, because of the following:

  1. The employee is subject to an isolation or quarantine order related to COVID-19.

  2. A health care provider has advised the employee to remain at forty due to concerns related to COVID-19.

  3. The employee experiences symptoms of COVID-19 and is seeking a medical diagnosis.

  4. The employee is caring for an individual who is subject to an isolation or quarantine order.

  5. The employee is caring for her child under the age of eighteen (18), whose school or place of care has closed due to COVID-19.

  6. The employee is suffering from any other substantially similar condition specified by the federal Secretary of Health and Human Services, in consultation with the Secretary of the Treasury and the federal Secretary of Labor. 

If the leave is granted because of the first three reasons (1-3), the employee will be entitled to receive his full regular salary. If the employee takes leave for the remaining reasons (4-6), he will be entitled to receive at least two thirds of his regular salary. Full-time employees will be entitled to:

  • eighty (80) hours with pay,

  • up to a maximum of $ 511 of compensation per day, and

  • a cap of $ 5, 11O.

Part-time employees are entitled, based on a calculation of:

  • the hours they normally work in a period of two (2) weeks shall be averaged, and

  • shall be compensated up to a maximum of $ 200 per day and $ 2,000 in total.

Employers may not reprimand, terminate or in any way take disciplinary action against an employee that utilizes this license, presents a complaint or anything related to this license. Nonetheless, employers may establish a reasonable policy related to due notification for the use of said license.  Employers must publish, in a visible location, a notice to be prepared and published by the Federal Department of Labor, with information related to this license.

(2) Emergency Family and Medical Leave Expansion Act of 2020, 29 USC sec. 2601, 2612, 2620

The FMLA was amended to include a new justification to qualify for the twelve (12) week license it provides. Unlike the previously discussed sick pay, this leave applies to: employees who have worked at least thirty (30) calendar days for an employer with less than five hundred (500) employees.  This license may be used by that employee who is unable to work, including remotely, because he needs to care for his son or daughter, under eighteen (18) years of age, whose school or place of care has closed, or the caregiver is not available due to a COVID-19 related public health emergency.  The first ten (10) days of this leave may be without pay, but the employee has the possibility to replace (combine) this initial period with any other accumulated vacation leave, sick leave or personal leave. Among the leaves to which the employee could discretionally resort to receive pay during that initial period, is the new sick pay leave due to COVID-19. On the other hand, during the remaining ten (10) weeks of leave available under FMLA, the employee will be entitled to receive a minimum of two thirds (2/3) of their regular salary for the number of hours that the employee would normally be scheduled to work, with a daily cap of $ 200 and a maximum of $ 10,000 in total. Employers with twenty-five (25) employees or more will have the same job reserve obligation that normally exists under the FMLA. However, employers with less than twenty-five (25) employees are excluded from this requirement if, after the employee has taken the emergency leave under FMLA, his position ceases to exist due to economic conditions or other operational changes that affect the jobs and are caused by the public health emergency during the period in which the worker enjoyed the leave.  Eligible employers may be reimbursed, by the federal government, for the expenses incurred by granting this license. Said reimbursement could be covered under the Families First Coronavirus Response Act of 2020, and those guidelines to be published by the Department of Treasury in USA and Puerto Rico.  Employers that do not comply with these licenses and regulations shall be subject to penalties.

(3) Emergency Unemployment Insurance Stabilization and Access Act of 2020, 42 USC secs. 1103, 1305, 1322

This Act assigns one billion dollars in emergency subsidies for states, in order to help in the processing and payment of unemployment benefits. In addition, states with an increase of at least ten percent (10%) in applications for unemployment benefits will be eligible for additional subsidies. This grant will certainly assist DTRH in administering unemployment insurance benefits, which is paramount in this time of emergency before COVID-19.

IV. LOANS THAT EMPLOYERS CAN GRANT TO EMPLOYEES DURING THE STATE OF EMERGENCY

As an exception to the general rule that prohibits deductions from wages, employers are allowed to provide to the employees advances of payroll or equipment, materials or goods that are directly related to a state of emergency, and deduct them periodically from the salary of employees who authorize it in writing. Given the declaration of emergency by both the Governor of Puerto Rico and the President of the United States, employers are currently able to offer various aids to their employees, such as advances in payroll, respiratory equipment, materials to prevent contagion, or other property related to the prevention and treatment of COVID-19.

The repayment will not be subject to interest, and the employer may only charge an amount equal to or less than the cost incurred to acquire the equipment, material or goods. The payroll discount to reimburse the advances or expenses may not exceed twenty percent (20%) of the net amount payable to the employee in his regular payment period, after all deductions have been made, both those required by law and voluntary. The written authorization must include:

  1. a breakdown of how the employee will pay the total payment of the amount owed, and

  2. the agreement between the parties on how the worker will respond for the debt if the employment relationship ceases before the repayment is completed.

The aforementioned does not apply to exempt employees, so it is permissible for them to voluntarily enter into agreements with their employers on deductions from wages without being subject to the provisions previously discussed.  In this sense, payroll advances and salary deductions for reimbursement of goods or services purchased by the employer for the benefit of an exempt employee will be subject to what is strictly agreed upon by the parties, as they deem appropriate.

None of the foregoing prevents an employer from providing goods, materials, or services free of charge to its employees or from making voluntary payments to assist or reward its workers.

V. EMPLOYEES AND EMPLOYERS EXEMPT FROM THE CURFEW

The employees who are working for an employer exempt from curfew (OE-2020-023), must remember that their functions are necessary for the continuation of essential services. That is why employers will be able to use the measures contained in their reasonable institutional policies and procedures, both in relation to unexcused absences and procedures in general.  Employers are encouraged to be sensitive to the situation of their employees and to carefully evaluate the applications of employees who are interested in availing themselves of some of the leaves to which they are entitled or unpaid leaves.  Also, it is necessary for employers to make a thorough analysis of the essential nature of the functions of employees in order to limit the number of these in the workplace, and that reinforce their security measures to encourage the employees that are working to do so with the greatest confidence and security possible.

Employers must remember that their responsibility to protect the health and personal integrity in the workplace is a constitutional mandate. Therefore, it is of utmost importance that at this crucial moment to take crucial steps to reduce the possibility of contagion of COVID-19.

It is imperative that employers in each workplace have:

  1. Have an action plan and institutional policies to identify staff or visitors with possible symptoms.

  2. Have measures for cleaning and disinfecting surfaces, work areas, instruments and materials.

  3. Must comply with the provisions applicable to their industry, as well as examine the OSHA guidelines related to COVID-19.

  4. Distribute or post educational posters for employees on risk prevention strategies.

  5. Promote frequent and thorough hand-washing, with adequate supplies of soap and drinking water, and when not available, with suitable alcohol-based products.

  6. In places with a high concentration of employees, employers must take additional measures to prevent the possible spread of the virus by avoiding close contact. For example,

    1. limiting the number of employees on each shift,

    2. creating alternate shifts,

    3. maintaining the recommended distance between each employee,

    4. freeing up workspaces between employees,

    5. separating work units,

    6. not sharing work tools,

    7. expanding the shift change time to disinfect areas and instruments.