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The Puerto Rico Supreme Court affirmed in part and reversed in part the Minimum Wage Board's Decree No. 22. The court rejected most of the hotel company's constitutional challenges to minimum wage classifications and rates, but found error in the Board's application of hospital meal-cost data to hotels without evidentiary support and remanded for recalculation of deductions.
Condado Beach Hotel Co. v. Minimum Wage Board
What Happened
The Condado Beach Hotel Company challenged a minimum wage order issued by Puerto Rico's Minimum Wage Board in 1953. The hotel disputed the wage rates and rules the Board set for its workers, arguing they were unconstitutional and improperly calculated.
What the Court Decided
The Puerto Rico Supreme Court mostly sided with the Minimum Wage Board. The court upheld most of the wage classifications and rates. However, it found one significant problem: the Board had incorrectly used hospital meal cost data to calculate what deductions hotels could make from workers' pay, without proper evidence to support this. The court sent the case back to the Board to recalculate the deductions fairly.
Why This Matters for Workers
This ruling established that minimum wage laws can require employers to pay set wages, even if employers disagree. However, it also showed that when employers deduct meals or other costs from wages, courts will check whether those deductions are reasonable and based on actual evidence—not just guesses or inappropriate comparisons.
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