Puerto Rico’s labor reform law, explained

by | Jan 26, 2017 | Headlines, Puerto Rico | Comments

The Puerto Rico Labor Transformation and Flexibility Act, also known as House Bill No. 453 and Senate Bill No. 212, has been signed into law, following several weeks of contentious debate. After passing the House on January 14th, the bill made its way to the Senate, where it was amended before being passed.

The law amends numerous past Puerto Rican labor laws, such as Act 180 of May 27, 1998; Act 379 of May 15, 1948; Act 148 of June 30, 1969; Act 80-1976; and Act 427-2000. Amending these acts will have numerous effects on the way employees and employers interact. Some of the changes will be:

  • Certain retail industries will be allowed to operate on Sundays and some holidays, without employee compensation, or with only time-and-a-half pay;
  • Independent contractors will no longer be included in within the “employment contract” concept;
  • Electronic means can be used to obtain signatures and send notices to employees;
  • Except in explicitly stated cases, local employment laws will be required to be used similarly to federal laws and regulations on the matter;
  • The amount of damages due to employment discrimination claims will have a maximum limit;
  • Meal periods will not be necessary for a shift lasting less than six hours, and only one meal period will be required in a shift lasting less than 12 hours;
  • Vacation time will no longer be accrued the same, with less accrued and a staggered schedule based on seniority;
  • Christmas bonuses will be reduced to two percent, with a maximum of $600 or $300, based on business size. There will also be a required number of hours to be eligible for a bonus;
  • A breastfeeding break, for part time employees working more than four hours, will be paid;
  • The time to file an unjust dismissal, or wage and hour, claims will be reduced from three years to one year;
  • The concept of flexible time is introduced, allowing employees who choose to do so, to work four days a week for ten hours;
  • And daily overtime, redefined to mean time worked over eight hours in a calendar day, will be paid at time-and-a-half; among other changes.

Many of these changes, including any changes to worker’s rights, will not be applicable to employees working before the passage of the bill.

The bill aims to create new jobs by giving new flexibility to employers, large and small. However, many in the Popular Democratic Party (PDP) have not been fond of the proposed changes, including San Juan Mayor, Carmen Yulín Cruz Soto, who calls it “unconstitutional.”