Puerto Rico: Important Updates and Upcoming Deadlines Concerning Employee Benefits

By Maria Isabel Rey-Cancio and Ana María Bigas-Kennerley

employee benefits2.JPGIn this blog post, we discuss important updates, including upcoming deadlines, with respect to employee benefits impacting plan sponsors. 

Puerto Rico Treasury Announces 2015 Limits on Retirement Plans


The Puerto Rico Department of the Treasury ("PR Treasury"), the equivalent to the Internal Revenue Service (IRS) in the United States, on a yearly basis is required to issue a notification of the limits on retirement plans that will apply in Puerto Rico during the following taxable year.  On December 15, 2014, the PR Treasury published Tax Policy Circular Letter 14-05 ("CL 14-05"), announcing the limits applicable to Puerto Rico for 2015, including the limits that are incorporated into the Puerto Rico Internal Revenue Code ("PR Code") from the U.S. Internal Revenue Code ("US Code"). 

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Brazil Supreme Court Confirms the Constitutionality of Mandatory Break Before Overtime Work for Women

By Renata Neeser

In an arguably regressive decision issued on November 27, 2014, the Superior Federal Court of Brazil (the equivalent of the United States Supreme Court) ruled that it is constitutional to provide certain benefits only to female employees, and in particular, that article 384 of the Brazilian Labor Code was not tacitly revoked by the current Federal Constitution. RE 658312.

The current Federal Constitution enacted in 1988 emphasizes the principle of equality, and expressly asserts gender equality by stating that men and women are equal in rights and obligations within the terms of the Constitution. Article 5, item I of the Federal Constitution. However, the Federal Constitution left a few doors open for correcting existing inequalities and accounting for physical differences between genders, by allowing the possibility of differentiated treatment in certain circumstances. One of these exceptions, for instance, establishes the protection of the labor market for women through specific incentives, as provided by law, and provides different retirement ages for men and women. See, Article 7, item XX and Article 40, §1, item III, (a) and (b) of the Federal Constitution. 

The Brazilian Labor Code, created in 1943, has a chapter entirely dedicated to the protection of women's work. Chapter III of the Consolidated Labor Laws. In 1989, following the new Constitution, Law 7.855/89 expressly revoked many articles of that chapter, in particular those that restricted women from working overtime and at night, which hinder the job opportunities for women. However, the law did not revoke article 384 of that chapter, which determines that employers must provide a 15-minute break to female employees before they start any overtime work.

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Australia: What Employers with Australian Operations Should Know about Extension of Australia's Employment Laws Outside its Exclusive Economic Zone

By: Naomi Sheridan

iStock_000008165511Small_globe_keyboard_computer.jpgAt one time or another, many companies with international operations may look to transfer employees between the company's offices. There are many reasons why companies do so.  A company might have an international secondment or assignment program, for instance, that provides employees with the benefit of gaining experience living and working in a new market.  In other situations, a company may require the skills and experience of a particular employee in a part of the business that the company wants to establish or grow, or a company might simply desire the specific skill-set of a foreign manager or executive.  In each of these situations, there is likely to be consideration of immigration and local employment laws by the employer (often tied to the visa terms), but the impact of the laws in the employee's country of citizenship are often overlooked in these situations.  Failure to consider the applicability of Australian laws when transferring employees outside of Australia can have significant consequences for the employer.   


In particular, there are two aspects of Australia's employment-related laws that should be reviewed:  Australia's Fair Work legislation and the Superannuation Guarantee (compulsory retirement benefit) laws.

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Venezuela Minimum Wage Set to Increase on December 1, 2014

By Daniela Arevalo

money bag.jpgOn November 4, 2014, Venezuelan President Nicolas Maduro announced an increase of 15% of the minimum wage effective December 1, 2014. This announcement has not yet been published in the Official Gazette. The increase raises the minimum wage from 4,251.40 to 4,889.11 Bolivars (VEF) per month (equivalent to USD 776.03 at the official exchange rate of VEF 6.30 per USD 1).

This is the third minimum wage increase in 2014 in Venezuela, the first increase being a 10% boost in January and 30% in May. The measure aims to protect workers' salaries from the high inflation level running at nearly 60% this year. However, employers are only obliged to increase salaries of those workers earning minimum wages, unless otherwise agreed through a collective bargain agreement.

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Brazil: Highest Labor Court Clears Franchisor from Vicarious Liability for Employment Law Obligations

By Renata Neeser

gavel_coming_down_motion.jpgIn a recent decision, Brazil's Superior Labor Court ("Tribunal Superior do Trabalho" or "TST"), the highest labor court in the nation, unanimously held that a franchisor was not vicariously liable for the franchisee's alleged non-compliance with employment obligations.  This decision (docketed as Case No. TST-RR-1170-78.2011.5.03.0077) represents a decisive victory for employers.

Under Brazilian law (Law 8.955/94), a franchise is the system through which a franchisor assigns to a franchisee the right to use the trademark or patent, distribute exclusively or semi-exclusively the products and services, and use the technology of implementing and managing the business or the operational system developed or owned by the franchisor, with direct or indirect compensation, but without creating an employment relationship.  Franchising, therefore, allows for a shifting of the legal responsibility from the franchisor to the franchisee (i.e., the operator of the franchised business) where the franchisee exerts the control over the acts or omissions that allegedly caused the injury.

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U.S. Labor and Employment Law Updates

Capitol for Global.jpgNLRB General Counsel Acknowledges Legal Stumbling Block in Joint Employment Issue, Highlights Priorities
Speaking at a West Virginia University College of Law event last week, National Labor Relations Board General Counsel Richard F. Griffin, Jr. pointed out the pitfalls in his office's argument that franchisors should be named in unfair labor practice charge complaints as joint employers with their franchisees. In July, Griffin surprised many by announcing that his office intends to name a parent franchisor as a respondent in cases involving alleged unfair labor practices committed by franchisees if a settlement is not reached. This decision caused an uproar in the business community because it would make significant changes to the franchise model. Read the full post here.  (October 29, 2014)

Political Speech and Activity in the Workplace: The 2014 Midterms are Here
Election season can be a heated time.  In many contexts, this can mean arguments with friends, family, and acquaintances.  It can also mean added tension and disagreement in the workplace.  In some cases, employers may seek to minimize political discussions at work.  In others, employers themselves may try to introduce politics into the workplace.  Regardless of whether an employee may engage in political activity in the workplace, employees may have rights to conduct political activities outside of work, and to take time off from work, where needed, to vote in an election. Read the full ASAP here.  (October 29, 2014)

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U.S. Labor and Employment Law Updates

Capitol for Global.jpgNLRB General Counsel Acknowledges Legal Stumbling Block in Joint Employment Issue, Highlights Priorities
Speaking at a West Virginia University College of Law event last week, National Labor Relations Board General Counsel Richard F. Griffin, Jr. pointed out the pitfalls in his office's argument that franchisors should be named in unfair labor practice charge complaints as joint employers with their franchisees. In July, Griffin surprised many by announcing that his office intends to name a parent franchisor as a respondent in cases involving alleged unfair labor practices committed by franchisees if a settlement is not reached. This decision caused an uproar in the business community because it would make significant changes to the franchise model. Read the full post here.  (October 29, 2014)

Political Speech and Activity in the Workplace: The 2014 Midterms are Here
Election season can be a heated time.  In many contexts, this can mean arguments with friends, family, and acquaintances.  It can also mean added tension and disagreement in the workplace.  In some cases, employers may seek to minimize political discussions at work.  In others, employers themselves may try to introduce politics into the workplace.  Regardless of whether an employee may engage in political activity in the workplace, employees may have rights to conduct political activities outside of work, and to take time off from work, where needed, to vote in an election. Read the full ASAP here.  (October 29, 2014)

Continue Reading...

U.S. Labor and Employment Law Updates

Capitol for Global.jpgNLRB General Counsel Acknowledges Legal Stumbling Block in Joint Employment Issue, Highlights Priorities
Speaking at a West Virginia University College of Law event last week, National Labor Relations Board General Counsel Richard F. Griffin, Jr. pointed out the pitfalls in his office's argument that franchisors should be named in unfair labor practice charge complaints as joint employers with their franchisees. In July, Griffin surprised many by announcing that his office intends to name a parent franchisor as a respondent in cases involving alleged unfair labor practices committed by franchisees if a settlement is not reached. This decision caused an uproar in the business community because it would make significant changes to the franchise model. Read the full post here.  (October 29, 2014)

Political Speech and Activity in the Workplace: The 2014 Midterms are Here
Election season can be a heated time.  In many contexts, this can mean arguments with friends, family, and acquaintances.  It can also mean added tension and disagreement in the workplace.  In some cases, employers may seek to minimize political discussions at work.  In others, employers themselves may try to introduce politics into the workplace.  Regardless of whether an employee may engage in political activity in the workplace, employees may have rights to conduct political activities outside of work, and to take time off from work, where needed, to vote in an election. Read the full ASAP here.  (October 29, 2014)

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Puerto Rico Enacts New Incentive Plan for Employers to Pay Outstanding Workers' Compensation Debt

By Anabel Rodríguez-Alonso

  iStock_000002651868XSmall_noBG_hand_holding_money copy.jpgOn October 16, 2014, Puerto Rico Governor Alejandro García Padilla signed Law No. 174, a new incentive plan for employers to become current and eliminate any arrears of any outstanding debt owed to the Puerto Rico State Insurance Fund Corporation ("SIFC") that oversees workers' compensation funds.  Law No. 174 grants a 20% discount of the SIFC debt as long as the employer pays the debt within 180 days from the date of the publication of the guidelines.

With its enactment, Law No. 174 amends Article 2 of Law No. 15 of January 3 of 2014.  Law No. 15 provides incentives, such as the elimination of interests, surcharges and administrative expenses of past due amounts owed to SIFC, the Unemployment Insurance Fund, the Chauffeurs Insurance Fund and the Non-Occupational Disability Insurance, as well as the creation of interest-free payment plans, among others. 

Law 174 further instructs the SIFC to adopt and publish the necessary regulations and guidance for implementing the incentive plan within 30 days of the law's enactment.  From the date the guidelines are published by the SIFC, employers will be required to pay their debt before the end of the 180-day window. 

Employers that need to ascertain the full amount of their debt with the various governmental agencies or establish a payment strategy should seek legal counsel. 

Puerto Rico Treasury Issues Further Guidance Clarifying the Prepayment Window Rules: Employers May Need to Take Immediate Action to Comply with the Rules

By Carlos J. Villafañe-Real and Ana María Bigas-Kennerley


On September 29, 2014, the Puerto Rico Treasury issued Tax Policy Circular Letter No. 14-02 ("CL 14-02") to provide answers to the most frequent questions made by plan sponsors and plan administrators of retirement plans in connection with the pre-payment rules and procedures originally established through Administrative Determination No. 14-16 of August 6, 2014 ("AD 14-16").  This new guidance overrides and clarifies prior understandings under AD 14-16 with respect to the discretion of the plan administrator or sponsor to recognize pre-payments under the plan.  As such, employers may be required to take new measures in order to comply with the new pre-payment rules. Continue reading this article here.