Puerto Rico Update: New Employment Benefits Approved

Published date23 September 2022
Subject MatterEmployment and HR, Contract of Employment, Employee Benefits & Compensation, Employee Rights/ Labour Relations
Law FirmSeyfarth Shaw LLP
AuthorAna Cid and Juanita Vera-Trujillo

On June 20, 2022, Puerto Rico's governor signed Act No. 41, which modifies several of Puerto Rico's current employment statutory entitlements, providing greater employment benefits to employees in the private sector (the "Act").

The Act was intended to be effective within 30 days of its signature (on July 20) for large employers, and within 90 days (September 20) for microbusinesses, small and medium-sized businesses, if approved by Puerto Rico's Financial Oversight and Management Board'an entity that is empowered to temporally suspend the enforcement of Acts if it believes new legislation does not comply with Puerto Rico's fiscal plan.

However, on July 20, 2022, the Board released a statement instructing Puerto Rico's governor to suspend the implementation and enforcement of the Act. In spite of this, Puerto Rico's governor declared that the Act would not be suspended and that the Board would need to obtain such suspension via court ruling.

Although the Board recently filed a lawsuit challenging the governor's action and seeking for the Act to be declared null, it is not clear what and when a court will decide. To date, the court has not suspended the implementation of the Act, and therefore it is enforceable.

To avoid breaching the Act and incurring sanctions from the failure to implement its provisions, companies should review their current policies and practices, and adjust them to comply with the Act's rules.

The main employment conditions impacted by the Act are the following:

  • Probationary Period. Now, the probationary period may not exceed three months, unless employers notify the Secretary of Labor and Human Resources in writing otherwise.
  • Working Hours'Request for Change. Employees who regularly work 30 hours per week or more, and who have worked for the employer for at least one year, may now request a change of schedule, number of hours, or place where they perform their services.
  • Rest Day. Employees shall be entitled to one day of rest (24 consecutive hours) for every six days of work.

  • Employers who ask employees to work during the rest day will be obligated to compensate the hours worked during that day of rest at a rate equal to 1.5 X the rate agreed for regular hours. (Employees who are students are entitled to a rate equivalent to double the rate agreed for regular hours when they work during a rest day, unless they work for micro-enterprises or small and medium-sized businesses, which are allowed to compensate those employees at a rate...

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