If you have any questions in regards to the above, please do not hesitate to contact our offices so that we may explain the amendments to the provisions of the Code in more detail. Our address is:
Fiddler González & Rodríguez, P.S.C., P.O. Box 363507, San Juan, PR 00936-3507. Our fax (787) 759-3108.
We welcome your questions and comments.
José J. Santiago
Carlos A. Padilla
Antonio L. García
Vol. 2016, No.6 June 14, 2016
HOUSE APPROVES PROMESA, BILL DELAYS APPLICATION OF AMENDED FLSA EXEMPT EMPLOYEES REGULATIONS IN PUERTO RICO
On June 9, 2016, the US House of Representatives approved H.R.5278, the Puerto Rico Oversight, Management, and Economic Stability Act, known as PROMESA. This bill addresses Puerto Rico's debt by establishing a Financial Oversight and Management Board, a process for restructuring debt, and expedited procedures for approving critical infrastructure projects. The bill now goes for consideration to the Senate.
Section 404 of the bill also provides that the recently enacted final regulations relating to FLSA exemptions regarding the rates of pay for executive, administrative, professional, outside sales, and computer employees shall not apply in Puerto Rico until:
(1) The Comptroller General of the United States completes an assessment of the economic conditions in Puerto Rico and prepares a report to Congress assessing the impact of applying the regulations to Puerto Rico, taking into consideration regional, metropolitan, and non-metropolitan salary and cost-of-living differences. The Comptroller has two years to prepare the assessment and report; and
(2) The Secretary of Labor, taking into account the assessment and report of the Comptroller General, provides a written determination to Congress that applying the rule to Puerto Rico would not have a negative impact on the economy there.
In the US, the final regulations regarding exempt employees go into effect on December 1, 2016. The initial increases to the standard salary level of exempt employees(from $455 to $913 per week) and Highly Compensated Employees total annual compensation requirement (from $100,000 to $134,004 per year) will be effective on that date. Future automatic updates to those thresholds will occur every three years, beginning on January 1, 2020. Whether or not this effective date applies to Puerto Rico will depend on whether Section 404 of PROMESA is approved.
We will continue to keep you posted on any developments regarding PROMESA.
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