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José J. Santiago

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Edgardo Barreto

787-759-3170

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Vol. 2016, No.7 June 28, 2016

 

PUERTO RICO SUPREME COURT FINDS EMPLOYERS NOT REQUIRED TO LIQUIDATE ACCRUED SICK LEAVE

 

In the case of Noel Zayas Rodríguez and others v. Puerto Rico Telephone Co., 2016 TSPR 118, 195 DPR ____ (2016), the Puerto Rico Supreme Court addressed the question whether Puerto Rico Act No. 180 of 1998, the Minimum Wage, Vacations and Sick Leave Act, requires private employers to liquidate accrued sick leave when the employee ceases his/her employment. The Court found that Act 180 does not impose such a requirement, but that employers may voluntarily assume payment of accrued sick leave as an internal company policy.

 

The two plaintiffs in this case were managerial employees who were terminated from employment. They sued the Company for unjust dismissal (Act 80 of 1976), age discrimination (Act 100 of 1959), slander, damages and other claims. The plaintiffs based their claim for payment of the accrued sick leave on a Company policy. The Company argued that its policy only required it to liquidate accrued sick leave when an employee retired and not when the employee was terminated, as happened in this case. The plaintiffs argued that the accrued sick leave constitutes salaries and that the liquidation upon retirement policy was null as an illegal salary deduction by the employer. The Supreme Court held that sick leave benefit is not part of the employee’s salary and it found no intent in Act 180 and its legislative history that would require an employer to liquidate accrued sick leave. In addition, the Court found that the employer can agree to provide greater benefits than those established in Act 180, including the liquidation of accrued sick leave upon retirement as the Company did in this case. Therefore, the Employer did not violate Act 180 on conditioning the liquidation of accrued sick leave upon the employees’ retirement.

 

 

 

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