Puerto Rico Passes Pay Equity Law, Restricts Salary History Requests

Puerto Rico Passes Pay Equity Law, Restricts Salary History Requests

Earlier this month, Puerto Rico became the latest US jurisdiction to mandate that employers pay men and women equally for the same work, when Governor Ricardo Rosselló signed the Puerto Rico Equal Pay Act, a bill modeled on the federal Equal Pay Act of 1963 but updated with some new provisions regarding salary histories and pay transparency. Jackson Lewis attorneys Maralyssa Álvarez-Sánchez and Juan Felipe Santos outline how the new law aims to enforce gender parity in compensation at the National Law Review :

Pay Discrimination Prohibition. Like the federal Equal Pay Act, Act 16 establishes a general prohibition of pay discrimination based on sex among employees in jobs that require equal skill, effort, and responsibility, and that are performed under similar working conditions, except where such payment is made pursuant to (i) a seniority system; (ii) a merit system; (iii) a system which measures earnings by quantity or quality of production; or (iv) a differential based on any other factor other than sex.

Past Salary History Inquiries Prohibited. Act 16 prohibits employers from inquiring into an applicant’s past salary history, unless the applicant volunteered such information or a salary was already negotiated with the applicant and set forth in an offer letter, in which case an employer can inquire or confirm salary history.

Pay Transparency. Act 16 forbids employers from prohibiting discussions about salaries among employees or applicants, with certain exceptions for managers or human resources personnel. It also contains an anti-retaliation provision protecting employees who disclose their own salary or discuss salaries with other employees, object to any conduct prohibited by the law, present a claim or complaint, or participate in an investigation under Act 16.

Banning or restraining employers from asking candidates for salary histories has been popping up in similar pay equity bills, most notably one passed in Massachusetts last year—the first state to do so. Subsequently, New York City has banned these inquiries for government jobs, and Philadelphia has banned them outright. Democrats in the House of Representatives have even introduced legislation to do so on the federal level, but that bill is not likely to go anywhere in the current Congress. Meanwhile, more and more employers are pledging to curb gender pay gaps in their workforce, as this issue remains subject to strong public scrutiny.

Also worth noting is that the Puerto Rican legislature passed this law not long after Rosselló signed a controversial labor reform package that eases labor regulations to reduce the cost of doing business on the island, hopefully helping to revitalize its battered economy. That Puerto Rico’s territorial government sees the pay gap as an issue worth addressing in law, even while in the process of easing its overall regulatory climate, goes to show how wide the consensus has grown that pay disparities based on gender are unacceptable.