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Puerto Rico Credit Restrictions

December 5th, 2019 | Angela Preston, Senior Vice President and Counsel, Corporate Ethics and Compliance

Puerto Rico Credit Restrictions

On October 8, 2019, Puerto Rico Governor Vazquez signed into law Act No. 150-2019, (the “Act”) to restrict investigations into applicant and employee credit reports and histories. The Act effective upon signing, adds Puerto Rico to a growing list of state and local jurisdictions which have enacted limitations regarding employers’ access to and use of employee and applicant credit information.

Puerto Rico Laws: Credit Report

The Act’s stated intent is to increase access and introduce greater flexibility to the labor market. As such, it generally prohibits employers from obtaining an applicant or employee’s credit report from a credit reporting agency. The Act also prohibits employers from verifying or investigating that history. It further prohibits the following practices on the basis of credit history: refusing to hire applicants, dismissing or refusing to promote employees, or denying compensation or benefits.

Exceptions

The Act makes exceptions to the prohibitions on the following, provided that the employer obtains prior written consent from the applicant or employee:

  • Managerial positions
  • The employer or position is regulated by the Office of the Commissioner of Financial Institutions or federal agency (including but not limited to public policy agents, judicial branch and Justice Department employees), or a position for which a credit report is otherwise required by law
  • Positions with access to financial or personal information
  • Positions with access to trade secrets
  • Positions with fiduciary responsibility and regular access to cash or valuables in excess of $10,000 per day

Enforcement

Compliance with the Act is enforced by the Department of Labor of the Commonwealth of Puerto Rico, which receives and processes complaints in addition to conducting investigations and inspections as well as imposing enforcement actions. Fines include $1,000 for the first violation, and $2,500 for each subsequent violation.

Credit Report Puerto Rico: What Employers Need to Consider

Employers with locations or employees in Puerto Rico should consult with their legal counsel to determine the applicability of the Act or its exceptions to their business and employees. Sterling clients may contact their account representative with any questions, and to update or modify their services accordingly.

The full text of the Act 150-2019 can be found here.

Questions around credit reports? Our in-house experts can support you in enhancing your candidate screening process with credit reports and its impact on financial responsibility.

This publication is for informational purposes only and nothing contained in it should be construed as legal advice. We expressly disclaim any warranty or responsibility for damages arising out this information. We encourage you to consult with legal counsel regarding your specific needs. We do not undertake any duty to update previously posted materials.