P.R. Laws tit. 29, § 175
Except in those cases provided in this section, no employer may deduct or withhold for any reason whatsoever, part of the salary earned by his or her workers or employees except:
(a) When the laborer authorizes his employer in writing to deduct from his wages a certain sum to be paid as assessment to any association organized under §§ 41–55 of Title 6 for the rendering of hospital services in Puerto Rico.
(b) When the laborer authorizes his employer in writing to deduct from his wages a certain sum for the purchase of savings bonds issued by the Government of the United States or by the Government of the Commonwealth of Puerto Rico; Provided, That the employer shall carry out the purchase of these bonds in behalf of the laborer; and Provided, also, That such deductions and the accounting thereof, and the investing of same in the purchase of savings bonds, as well as the delivery of the latter to the laborers, shall be made subject to the rules to be promulgated for the purpose by the Secretary of Labor and Human Resources.
(c) When the laborer authorizes his employer in writing to deduct from his wages a certain sum for the purchase of shares of stocks or payment of loans and interest or other debts the laborer may have with any credit union heretofore or hereafter organized pursuant to the laws of Puerto Rico; Provided, That the employer shall be obliged to make such payments to the Treasurer of the credit union by check drawn to the order of said credit union, provided said official or Treasurer has furnished proper bond as custodian of the funds of the credit union. If the employer fails to pay the sum deducted under this subsection within a term of not more than fifteen (15) days after the deduction was made, he may be compelled through civil action to satisfy the unpaid amount plus an equal sum for the settlement of damages, in addition to the costs, expenses and lawyers’ fees and there may be used for such purposes the procedure for cases of claims established in §§ 3118–3132 of Title 32.
(d) When in a labor collective agreement entered into between an employer and an agent of his employees in an appropriate unit for collective bargaining, a check-off is stipulated for a union not organized or operating on the basis of unfair labor standards; Provided, That in the event of a labor collective agreement of this nature, the employer shall be obliged to deliver the stipulated assessments to the official or Treasurer designated by the union, provided said official or Treasurer has furnished proper bond as custodian of the funds of the unions.
(e) When the laborer in the agricultural phase of the sugar industry authorizes his employer in writing to deduct the sum the latter has paid for lunches consumed by the laborer during the course of the working week or has advanced to him so that the laborer may pay directly the cost of the lunches; provided, that the amount so paid or advanced never exceeds one dollar ($1) per lunch.
(f) When the laborer authorizes his employer in writing to deduct from his wages a certain sum for the purchase of shares of stock and payment of loans and interest owed by the laborer to any credit union organized under the Federal Credit Union Act of 1934, as subsequently amended (12 U.S.C.A., chapter 14); Provided, That the employer shall be obliged to make such payments to the treasurer of the credit union by check drawn to the order of said credit union, provided said official or Treasurer has furnished proper bond as custodian of the funds of the credit union. If the employer fails to pay the sum deducted under this subsection within a term of not more than fifteen (15) days after the deduction was made, he may be compelled through civil action to satisfy the unpaid amount plus an equal sum for the settlement of damages, in addition to the costs, expenses and lawyers’ fees and there may be used for such purposes the procedure for cases of claims established in §§ 3118–3132 of Title 32.
(g) When the laborer authorizes his employer in writing to deduct from his wages a sum stipulated by the laborer or stipulated in a labor collective agreement entered into between an employer and a representative of his employees in an appropriate unit for collective bargaining as an assessment or payment toward any plan or group, pension, saving, retirement, allowance, annuity life, life, accident and health and hospital insurance policy, any combination of these plans, or any similar social security plan authorized by the laborer and by the union in case there exists a labor organization duly certified or recognized to bargain collectively with the employer or authorized by the laborer and the Secretary of Labor and Human Resources in the case of the nonexistence of such labor organization duly certified and recognized, but in both cases for the sole benefit of the laborers or their dependents or beneficiaries; provided, that the employer contributes with a sum not less than the sum contributed by the laborer and subject to the condition that said deduction shall be used by the employer to pay the cost of said benefit or for the said purposes:
(1) An insurance company, acceptable to the union or, in default thereof, to the Secretary of Labor and Human Resources, which has issued a contract insuring the employees and is authorized to operate in Puerto Rico under the supervision of the Commissioner of Insurance of Puerto Rico, or
(2) a trust bank acceptable to the union or, in default thereof, to the Secretary of Labor and Human Resources, authorized to operate in Puerto Rico under the supervision of the Secretary of the Treasury. If the deductions are not used as aforesaid, no deduction shall be made until the plan or insurance policy has been approved in writing by the Secretary of Labor and Human Resources of Puerto Rico. Every plan or policy under this section shall be filed with the Department of Labor and Human Resources of Puerto Rico before it takes effect. No deduction shall be made for any plan or insurance which permits the employer to receive, take or withhold for his own use and benefit the total or any part of the sum deducted. All plans shall contain appropriate provisions to permit the voluntary retirement of any laborer in a manner consistent with the continuation and due operation of the plan.
(A) Any insurance company doing insurance business in Puerto Rico in the branch of life, accident and health, [or] hospital insurance, by deducting the corresponding premiums from the wages of the laborer or employee, shall notify directly, and in the most effective manner that the Commissioner of Insurance of Puerto Rico may by regulations promulgate to such effects, the laborer and employee, the due date or cancellation of the insurance at least twenty (20) days in advance of the date of expiration of the grace period of his respective policy of certificate. Otherwise, the policy shall continue in force for all effects, until the notice requisite to employees is complied with. On and from the date of the notice shall begin the grace period provided in the proper provisions of the Insurance Code, §§ 101 et seq. of Title 26.
(B) Likewise, any insurance company offering the kinds of insurance above mentioned through the deduction of premiums from the wages, shall transmit directly to the laborer or employee the policy issued in the cases of individual policies. In the case of group insurance, the insurer shall transmit directly to the laborer or employee a certificate containing at least the following information:
(i) Name and address of the insurer and his authorized representative in Puerto Rico.
(ii) Number of the master policy.
(iii) Number of the certificate.
(iv) Protection to which the insured is entitled.
(C) It is provided that the contents of this subsection (g) shall prevail over any provision inconsistent with the Insurance Code of Puerto Rico, §§ 101 et seq. of Title 26.
(h) Whenever an employee of any public corporation, including those that operate as private enterprises or businesses, agency or government instrumentality of the Commonwealth, including municipalities, authorizes in writing to deduct from his salary a certain sum to cover the payment to the Retirement System of said public corporations, agency or instrumentality of the Commonwealth, of principal and interest, insurance policy premiums, taxes, deed and appraisal fees and other incidental expenses related to the acquisition, construction, enlargement or improvement of homes for such employees through the Retirement System or for the cancellation of mortgages on such homes.
Whenever an employee authorizes in writing to withhold from his salary a specific sum to cover payment of principal and interest on personal loans to his Retirement System.
(i) When the employer or his agent may have advanced to the laborer any amount in the lawful money of the United States of America, he shall have the right to deduct such sum from the wages of the latter which correspond to the week in which the advance was made. However, no amount shall be retained from his wages in excess of the total amount so advanced.
(j) When the employee authorizes, voluntarily and in writing, his employer to deduct from his/her salary a determined amount to contribute to charitable institutions of the Comminwealth or to the schools of the community attached to the Department of Education, or both, pursuant to the following:
(1) The employer shall state in the payrolls, on the basis of the employee’s authorization, the amount that is to be withheld for this purpose; the institutions, federations, or groups of institutions and intermediate entities that the employee wishes to help; and the proportion of the money that is to be given to each. The deduction shall not exceed three percent (3%) of his/her yearly wage deducted proportionally each month.
The payroll deduction mechanism provided in §§ 171—177 of this title shall not be used by any institution or group that receives a legislative appropriation for its operations, but that shall not impede it from receiving funds from an intermediate entity that obtains them through the payroll deduction system.
(2) The employer shall remit the donations thus authorized, each month, to the institutions, entities and federations, or corresponding groups. If the employer does not remit the amounts authorized under this clause within a period not to exceed thirty (30) days from the day the deduction is made, the unpaid amounts may be required through civil action, plus a like amount for liquidation of damages, in addition to costs, expenses and legal fees, using for said purpose the complaint procedure established in §§ 3118 et seq. of Title 32. Any employer who does not comply with the above shall be guilty of a misdemeanor with a maximum penalty of imprisonment for six (6) months, or a fine which shall not be less than one hundred dollars ($100) nor more than five hundred dollars ($500), or both penalties in the discretion of the court.
(3) No employer shall be obliged to implement the payroll deduction system provided by this subsection, but if he agrees to it, he must permit the employee to revoke or modify his authorization at any time, by written notice to the employer, at least fifteen (15) days prior to the date the employee wishes to cease the payroll deductions for donations. No deduction whatsoever shall be made for this purpose, that allows the employer to receive, take or retain for his own use and benefit, all, or any part of the deducted amounts. Any employer who does not comply with the above shall be guilty of a misdemeanor, with a maximum penalty of six (6) months of imprisonment, or a fine which shall not be less than one hundred dollars ($100) nor more than five hundred dollars ($500), or both penalties, in the discretion of the court.
(4) The entities or organizations desiring to avail themselves of the benefits of the payroll deduction system provided by §§ 171–177 of this title shall present to the Secretary of the Treasury a financial statement attested by a certified public accountant, which certifies that the same is in conformity with generally accepted accounting principles. The operations and financial statements of such entities shall be subject to inspection by the Secretary of the Treasury. In addition thereto, said entities or organizations shall submit to both Legislative Houses not later than January 31 of each year, a complete report of their income and expenses, distribution of donations, auditing, and any other information which shall enable the Legislature to examine and evaluate the results of the implementation of the system established by §§ 171–177 of this title.
(5) Any employer who dismisses or suspends an employee, or discriminates against him in any way, or threatens to commit any such actions against him for refusing to allow deductions of specific amounts of money to be donated to charitable institutions, shall be guilty of civil liability for a sum equal to twice the amount of damages said action has caused the employee or former employee; or for a sum not less than fifty dollars ($50) nor more than one thousand dollars ($1,000), in the discretion of the court, if pecuniary damages cannot be determined, or when twice the amount is less than fifty dollars ($50); or for a sum equal to twice the amount of damages the action has caused the employee or former employee, and an additional sum, which shall not exceed one thousand dollars ($1,000), in the discretion of the court.
It shall be presumed that any of the actions mentioned in § 174 of this title were caused by the fact that the employee or former employee had not authorized the deduction of certain sums of money from his wages to be donated to charitable organizations, when the employer has acted without just cause, or within three (3) months before, or six (6) months after any donation was given. This will be a disputable presumption. Any employer who acts in the manner described above, shall be guilty of a misdemeanor with a maximum penalty of six (6) months of imprisonment, or a fine which shall not exceed five hundred dollars ($500), or both penalties, in the discretion of the court.
(6) No employer or union official, personally, or through his agents, or any other person, shall, in any way, induce or harass an employee under threat of injury with regard to his working conditions, for the purpose of having him authorize deductions from his wages for any charitable organization.
(7) For the purposes of this clause, the following terms shall have the meaning indicated hereinbelow:
(A) Employee.— Shall mean and include the employees of private enterprises, who earn an annual wage of six thousand dollars ($6,000) or more in the enterprise.
(B) Charitable institutions.— Shall mean and include those organizations registered in the Department of State as nonprofit organizations, organized under the laws of Puerto Rico, which are exempted from the payment of income taxes under the provisions of § 8501 of Title 13, as provided by the Secretary of the Treasury, and exempted from the payment of income taxes under the Federal Internal Revenue Code. Charitable institutions must provide health, welfare, recreational, rehabilitation or preventive services directly to the people. They must have an adequate accounting system, bylaws, and hold the license issued by the respective government agency, as required by the Government of Puerto Rico to provide the services offered, and receive a yearly audit of their financial books, by a public accountant certified under the laws of the Commonwealth of Puerto Rico.
(C) Federation or group of charitable institutions.— Shall mean and include those entities composed of a series of charitable institutions that give direct services individually, but have joined together with the purpose of raising the funds needed for their operations. They shall have to comply with the requirements stated for charitable institutions, with the exception of those requirements connected with the services they give to the people.
(D) Intermediary entity.— Shall mean and include an entity that does not give direct services, whose purpose is to obtain the funds, and convey them to be used by those entities or organizations that give or offer the services.
None of the officers of the organizations that are benefited thereby may be members of the Board of Directors of the Intermediary Entity.
(E) School of the community.— Means a study community composed of its students, teaching and classified personnel, the parents of the students and the population it serves. It has teaching, administrative and fiscal autonomy. It shall be organized and administered in a democratic manner to carry out its fundamental mission which is to develop in its students the values, knowledge, skills, habits, attitudes and achievements that shall allow them to know themselves better, incorporate, participate and contribute to the development of Puerto Rican society. The participation of the community in the school shall be intensive and proactive in the detection and solution of common problems. The school serves the community and the neighborhood where it is located.
The community school may impart education at different levels, namely, pre-school, elementary and secondary through academic, vocational, technical and special programs.
This school shall be fully autonomous, and responsible for its operation.
(k) When the worker authorizes his employer, in writing, to withhold a specific amount from his wages as a contribution to an individual retirement account, whether it is an individual retirement account established by the employee, or by the employer for the exclusive benefit of his employees or their beneficiaries; Provided, That the sums withheld by the employer shall be deposited by the latter in one of the institutions described in § 8569 of Title 13 no later than three (3) working days after the date on which they were withheld.
(l) When it is a contribution of the worker or employee to any plan that is subject to the provisions of the “Federal Employee Retirement Income Security Act of 1974” known as E.R.I.S.A. by its English acronym.
(m) When the worker authorizes his/her employer in writing to deduct from his/her wages a certain sum as payment for his/her tax debt, provided the worker submits with his/her request for such a deduction, a copy of the payment plan duly subscribed and certified by the Secretary of the Treasury, solely indicating the sum that he/she wishes to have deducted from his/her salary, and the term of duration of said deduction. Provided, That the employer shall be bound to remit to the Department of the Treasury the amount withheld from the worker within a term of not more than ten (10) working days as of the due date of each payment. Any employer who refuses to effect the requested deduction and to remit the same to the Department of the Treasury, pursuant to this subsection, shall be subject to the penalty imposed by § 8150(c) of Title 13, known as the “Puerto Rico Internal Revenue Code of 1994”.
(n) When the worker authorizes his or her employer in writing to deduct from his or her salary a specific sum for purchasing shares of stock issued by the corporation or company for which he or she works. The employer shall make the disbursements in the manner established in the regulations promulgated in § 176 of this title. The disbursement shall be made to the person in charge of receiving the same in the company or corporation in question. Should the employer fail to deliver the amount authorized by the employee, he or she shall be subject to the provisions of subsection (c) of this section. Any employer, corporation or company that expressly or implicitly compels any of its employees to purchase one or more shares of stock of that entity or who takes any adverse action against any employee who refuses to purchase said shares of stock and is found by the Secretary of Labor and Human Resources to be in violation thereof, shall be sanctioned according to provisions of § 177 of this title.
Every document indicating the authorization of the employee must include the following warning in capital letters: “YOU ARE NOT COMPELLED TO PURCHASE ANY SHARE OF STOCK ISSUED BY THIS CORPORATION OR COMPANY. YOUR DECISION IS TOTALLY VOLUNTARY AND IF YOU DECIDE NOT TO PURCHASE, THIS CORPORATION OR COMPANY CANNOT TAKE ANY ADVERSE ACTION AGAINST YOU. IF YOU FEEL COERCED AS TO YOUR DECISION WHETHER TO PURCHASE ANY SHARE OF STOCK ISSUED OR IF YOU FEEL THAT THE COMPANY HAS TAKEN ANY ADVERSE ACTION AGAINST YOU, YOU MAY FILE A COMPLAINT WITH THE LEGAL DIVISION OF THE DEPARTMENT OF LABOR AND HUMAN RESOURCES AND IF FOUND GUILTY OF VIOLATING THIS AGREEMENT, THE COMPANY SHALL AGREE TO REIMBURSE TO YOU THE AMOUNT DEDUCTED FROM YOUR SALARY PLUS A SUM EQUAL TO FIVE TIMES THE AMOUNT DEDUCTED.”
(o) When the worker or employee authorizes his/her employer in writing to deduct from his/her salary a specific sum to serve as a contribution or payment for any insurance plan or policy or savings, retirement, pension or annuity plan or life, accident, health and hospital insurance or any combination of such a plan or any similar insurance plan, that shall solely benefit and be convenient for the worker or employee and his/her dependents or beneficiaries. For that purpose, this subsection shall apply and govern in the following manner:
(1) To enable the deductions, for both the insurance plans sponsored by the employer and the individual selection plans on the part of the employee. In this last case, whereby the employer does not necessarily contribute any amount whatsoever to the amount the worker contributes, the former will not participate in selecting the insurance or benefits plan, either through his/her agents or through any other person. The employer may not in any manner whatsoever pressure an employee by inferring that the conditions of his/her employment are threatened so that the latter may authorize deductions from his/her salary for a particular plan. The employer shall have the option of agreeing to the petition of the worker or employee for a payroll deduction.
(2) When the worker or employee authorizes his/her employer in writing to deduct a specific sum from his/her salary to serve as a contribution or payment for any individual benefits plan, the employer shall make the disbursements as provided in said individual plan.
(3) If the employer fails to remit the amount authorized by the employee for the payment of his/her policy, the former shall incur civil liability for a sum equal to double the total of the amounts deducted and not remitted. If the employee would have needed to make use of the benefits of the policy and the same had been cancelled because the employer failed to make the payments, the latter shall answer for a sum equal to double the total amount of the benefits of the cancelled policy.
(4) The worker or employee shall be responsible for notifying the benefits plan in case he/she is on leave, during which time he/she is not being paid any salary whatsoever and thus no deductions are being made. In the case of employment termination, the obligation of making payroll deductions shall immediately cease and the worker or employee shall be solely and exclusively responsible for remitting the corresponding payment to his/her benefits plan.
(5) The worker or employee may withdraw his/her authorization for payroll deductions through a prior written notice delivered to the employer at least twenty (20) days before the next payroll payment is due. The worker or employee shall be responsible for notifying the benefits plan in writing about his/her decision to withdraw the authorization for payroll deductions for paying for the plan.
(6) This clause shall not affect in any manner whatsoever the provisions about permitted deductions set forth in subsection (g) of this section.
(p) When the worker or employee authorizes, in writing, his/her employer to deduct a specific amount from his/her wages as a contribution, gift, or donation to the fund raising campaigns of the University of Puerto Rico. It shall be the responsibility of the employer to make the corresponding disbursements and to remit the same to the University of Puerto Rico.
History —Apr. 17, 1931, No. 17, p. 194, § 5; May 8, 1945, No. 86, p. 308, § 1; Mar. 21, 1946, No. 168, p. 274, § 1; May 10, 1950, No. 269, p. 698, § 1; May 16, 1958, No. 6, p. 5; June 28, 1961, No. 128, p. 274; June 26, 1964, No. 102, p. 319; May 9, 1968, No. 39, p. 58; May 30, 1972, No. 42, p. 91, § 1; July 23, 1974, No. 195, Part 2, p. 76; Sept. 22, 1980, No. 7, p. 961, § 1; July 2, 1981, No. 23, p. 133, § 2; Apr. 14, 1982, No. 3, p. 5, § 1; Jan. 12, 1983, No. 6, p. 487, § 3; July 18, 1986, No. 141, p. 447; July 1, 1995, No. 74, § 3; Mar. 22, 1996, No. 16, § 1; Dec. 25, 1998, No. 326, § 1; July 16, 1999, No. 152, § 1; Aug. 30, 2000, No. 249, § 1; Sept. 28, 2007, No. 134, § 1; June 2, 2008, No. 82, § 1.