Last Updated: October 2012
PUERTO RICO LABOR AND EMPLOYMENT LAW
McConnell Valdés LLC
Antonio Escudero Viera, Alfredo Hopgood and Miguel Rivera-Arce
Table of Contents
1. Puerto Rico Labor Law Guide
2. Minimum Wage
3. Verification of Identification and Authorization to Work
4. Administration for Child Support Enforcement (“ASUME”)
5. Independent Contractor
6. Contracts
7. Employment of Minors
8. Regular Hours and Overtime
9. Flexible Schedule
10. Meal Period
11. Uniforms
12. Regulations of Operation of Commercial Establishments
13. Employee Leaves
14. Vacation and Sick Leave
15. Family and Medical Leave Act (FMLA)
16. Schedule Uniformed Services Employment and Reemployment Rights Act (USERRA)
17. Compensation Procedures and Wages/Payroll Deductions
18. Christmas Bonus
19. Weekly Day Rest
20. Unemployment
21. Jury Duty
22. Unions
23. Drug Testing Act
24. Dismissal Act
25. American with Disabilities Act (ADA)
26. Act of Notification for the Adjustment and Retraining of Employees (“WARN”)
1. Puerto Rico Labor Law Guide
Applicable Law: 29 LPRA 1 et seq.
The Constitution of the Commonwealth of Puerto Rico establishes the framework for the
Puerto Rican labor law, through its Articles 15, 16, 17, and 18:
Section 15:
The employment of children less than fourteen years of age in any occupation
which is prejudicial to their health or morals or which places them in jeopardy
of life or limb is prohibited.
Section 16:
The right of every employee to choose his occupation freely and to resign
there from is recognized, as is his right to equal pay for equal work, to a
reasonable minimum salary, to protection against risks to his health or person
in his work or employment, and to an ordinary-workday which shall not
exceed eight hours. An employee may work in excess of this daily limit only if
he is paid extra compensation as provided by law, at a rate never less than one
and one-half times the regular rate at which he is employed.
Section 17:
Persons employed by private businesses, enterprises and individual employers
and by agencies or instrumentalities of the government operating as private
businesses or enterprises, shall have the right to organize and to bargain
collectively with their employers through representatives of their own free
choosing in order to promote their welfare.
Section 18:
In order to assure their right to organize and to bargain collectively, persons
employed by private businesses, enterprises and individual employers and by
agencies, enterprises and individual employers and by agencies or
instrumentalities of the government operating as private businesses or
enterprises, in their direct relations with their own employers shall have the
right to strike, to picket and to engage in other legal concerted activities.
Nothing herein contained shall impair the authority of the Legislative
Assembly to enact laws to deal with grave emergencies that clearly imperil the
public health or safety or essential public services.
2. Minimum Wage
Applicable Law: P.R. Act No.180 of July 27, 1998, 29 LPRA §250 et seq. and the Fair Labor
Standards Act (FLSA) of 1938, 29 USC §201 et seq.
The minimum hourly wage for a business covered by the Fair Labor Standards Act of 1938,
29 USC §201 et seq. is $7.25.
P.R. Act No. 180 of July 27, 1998, 29 LPRA §250 establishes that the jurisdiction will
follow any increase in the U.S. Federal minimum wage for all industries covered by the
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FLSA. Non-exempt employees must be paid at least the required minimum wage. P.R. Act
No. 180 requires enterprises that are not covered by the FLSA, to pay a minimum of 70% of
the applicable Federal minimum wage. The Secretary of Labor and Human Resources has the
authority to decrease the percentage rate in order to safeguard employment in the enterprises
not covered by the FLSA.
3. Verification of Identification and Authorization to Work
Applicable Law: Immigration Reform and Control Act (IRCA), 8 USC §1324a et seq.
All employers in Puerto Rico have the responsibility to verify the identity and work eligibility
of its employees. The official Federal-issued form to accomplish such verification and
confirmation is Form I-9. The form details all documents that may be used to confirm an
employee’s identity and authorization to work in the U.S. and Puerto Rico. An employer who
does not comply with the requirements established by the Immigration Reform and Control
Act (IRCA) will be subject to penalties.
4. Administration for Child Support Enforcement (“ASUME”)
Applicable Law: P.R. Act No. 5 of December 30th, 1986, 8 LPRA §501 et seq.
The Administration for Child Support Enforcement (“ASUME”) was created by P.R. Act
No. 5 of December 30th, 1986, 8 LPRA §501 et seq. The Agency is responsible for creating
and implementing the Commonwealth of Puerto Rico’s public policy regarding child support
as well as the Program for the Support of People of Advanced Age (“PROSPERA”).
ASUME imposes various responsibilities upon employers to guarantee that all individuals
who are employed within the Commonwealth comply with their child support duties.
The employer’s responsibilities include the following:
Registry of New Employees
Federal legislation requires Puerto Rico to have a
registry of all new employees as of October 1, 1997.
The Administration for Child Support Enforcement
(ASUME) is the official governmental organization
that manages the employee register. All employers
must submit the required information of new
employees to the State New Hire Register (RENE)
within twenty (20) days of recruitment, using the
ASM-5 Form (New Hire Report) provided by
ASUME.
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The employer’s responsibilities include the following:
Order of Retention of Earnings
Either a Court or ASUME can request that an
employer retain, or discount, the wages of an
employee who owes child support payments in the
amount owed, in order to comply with their support
responsibilities. Said orders are mandatory and are
effective on the date of notification. They will
continue in effect for as long as the child support
obligation subsists, or until the order is modified or
revoked by the Court or ASUME. Retentions should
be executed no later than seven (7) business days
after the order comes into effect, and the employee is
paid. From then on, the employer will continue to
retain the amounts within seven (7) business days
from the next payment to the employee. The
employer should include with the retentions sent to
ASUME, a list with the: name, social security
number of the employee, ASUME or the Court’s
case number, the amounts retained, and the date of
retention. Employers can, instead of making the
physical payments to ASUME, transfer the
retentions electronically to the Automatic Clearing
House (ACH). By doing so, employers do no need to
submit the ASM-4 form.
Employers who fail to retain the If employers stop retaining or remitting the amounts
ordered
amount
from
the owed by the employee pursuant to the retention
order, or fail to comply with any of the
employee’s wages.
responsibilities imposed on them by the law, the
Court or ASUME (after notifying the employer and
issuing a notice for a hearing) could:
Order the employer to pay whatever was not retained
or remitted, plus: impose fines; impose interests on
the defaulted payments; command the execution of
all previous orders for payments, utilizing the
employer’s property as collateral.
Termination of Employment
After termination of an employee, employers must
request a certificate of debt from ASUME, which
will detail any amounts to be retained from the
employee’s salary at the time of liquidation, in order
to remit to ASUME to cover for the employee’s
debts.
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5. Independent Contractor
Applicable Law: Puerto Rico and Federal Case Law
Puerto Rican law allows employers to recruit employees for permanent or predetermined
definite-term durations. A third option is available for employers: the independent contractor.
The independent contractor is not considered an employee as long as certain requirements are
met. If in fact an employee is labeled as an independent contractor, his or her relationship
with the employer will not be covered by most of the labor and employment legislation of the
jurisdiction.
Among the factors considered by the courts in determining whether an individual is an
independent contractor are:
1.
2.
3.
4.
5.
6.
7.
Nature, extent and degree of control by the principal.
Degree of permanence, stability and dependence of the relationship.
The amount of the alleged contractor’s investment in facilities and equipment.
The alleged contractor’s opportunities for profit and loss.
The degree of independent business organization and operation.
Form of compensation and withholding of taxes
The amount of initiative, judgment, or foresight in open market competition with others
required for the success of the claimed independent contractor.
6. Contracts
a. Employment Contracts
Applicable Law: P.R. Act No. 379 of May 15, 1948, 29 LPRA §271 et seq.
An employment contract in the jurisdiction of Puerto Rico can be agreed upon and
executed through both written and oral negotiations and pacts, whereby an individual
agrees to work for an employer in exchange for remuneration. P.R. Act No. 379 of May
15, 1948, 29 LPRA 288, establishes that employers who do not stipulate the wages
payable to its employees will be required to pay the wage requirements established by
law. Along the same lines, employment contracts that do not establish termination dates
for the employee or the service rendered, will be considered as indefinite-term
employment contracts.
b. Probationary Period Contracts
Applicable Law: Act No. 80 of May 30, 1976, 29 LPRA §185(h)
The purpose of a probationary period employment contract is to allow the employer to
assess an employee’s skills to perform the job requirements. Under this type of contract,
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an employer is not required to prove just cause for the termination. In order for the
probationary contract to be valid, it must meet the following requirements:
•
It must be in writing.
•
The contract must be signed by both parties before the first day of employment.
•
The contract must specify the first and last day of employment.
•
The maximum period of employment under a probationary contract is 90 days. If
there is written consent from the Secretary of Labor and Human Resources or it is
specified in a collective bargaining agreement, the contract may be extended to a
total of 120 days.
If the employee continues to work after the stipulated period, he/she would acquire all the
rights of an employee just as if he/she had been contracted without a definite term.
Every temporary employee contracted to continue working for the same employer shall be
credited with the time worked as a temporary employee for up to a maximum of half the
time required as probationary period for the position, provided the position to be held by
the employee entails the performance of the same tasks and duties of the position held by
the employee as temporary employee.
c. Temporary Contracts and Temporary Service Companies
Applicable Law: P.R. Act No. 80 of May 30, 1976, 29 LPRA §185 et seq. and P.R. Act No.
26 of July 22, 1992, 29 LPRA §575
P.R. Act No. 80 establishes that indefinite-term employees terminated without “just
cause” are entitled to a severance payment, which is based on years of service. The
burden of proving just cause for termination of employment rests on the employer.
Although employees hired for a fixed period of time (temporary employees) are not
covered by Act No. 80, this statute provides a set of criteria that must be met in order for a
temporary employment contract to be valid. Moreover, it establishes that if an employee
renders recurring type services under a temporary employment contract, he or she may be
covered by Act No. 80 if the practice and surrounding circumstances tend to indicate an
expectancy of continuous employment.
Act No. 80 establishes that every separation, dismissal, or termination of a temporary
employee, or the non-renewal of his or her contract, shall be presumed to constitute an
unjust dismissal, except when it involves employees who are fired within the probationary
period or are contracted for a specific bona fide period of time, or for a specific service.
Therefore, “bona fide” temporary employees are not covered by Act No. 80. A “bona
fide” temporary employment is valid only if:
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•
it is for a fixed period of time, or for a specific project or particular work;
•
it is in writing;
•
it establishes a specific date of commencement and termination, and is signed by
the employee before he or she commences to work; and
•
it states the purpose for the temporary employment, to wit: (1) to replace a regular
employee during his or her absence due to a legal leave; (2) to perform
extraordinary tasks of a definite duration (in which case the task must be
described); or (3) to perform in any project a particular activity of determined
short duration, not on a continuing basis.
Temporary service companies are organizations which supply temporary employees to
client companies. The employees work for a determined person or organization for a
limited time frame or a particular assignment. As a general rule, both the temporary
service company and the client company are considered joint employers. In other words,
both are legally responsible for the terms and conditions provided by Act. No. 26.
Temporary employees are entitled to the vacation and sick leave accruals established by
the temporary services companies. For all other mandates, the temporary employee enjoys
the benefits of the client company he/she is working for at the moment.
In cases of sexual harassment, job discrimination, or unjust termination, whoever
executed the illegal act, be it the temporary service company or the client company, will
be responsible.
If the employee takes a leave of absence, the temporary service company is responsible to
retain the employee’s position. If the temporary service company does not comply, the
client company where the employee was rendering services will be held responsible.
The temporary service company shall be responsible for the payment of the Christmas
bonus of the temporary employees, unless said employee has worked for the client
company for the seven hundred (700) hours as required by the law. In case the temporary
service company does not comply with this obligation, the client company shall be
responsible.
Temporary employees cannot be contracted for the following purposes:
1. As a method to destroy or keep labor unions out of the workplace.
2. To carry out illegal acts of discrimination.
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3. As means to elude compliance with the indemnity for release without just cause
laws of the jurisdiction.
4. In order to break, weaken or interrupt strikes or work stoppages.
7. Employment of Minors
Applicable Law: P.R. Act No. 230 of May 12, 1942, 29 LPRA §431 et seq.
The laws of Puerto Rico define a minor, for the purpose of employment, as any child under
eighteen (18) years of age. Minors are not allowed to work in occupations considered
dangerous or injurious to their life, health, education, safety or welfare. The forbidden
occupations are determined through regulations issued by the “Board for Determining the
Occupations Dangerous to Minors.” At a federal level, the Code of Federal Regulations (29
C.F.R. §570.50) establishes which occupations are considered hazardous for the employment
of minors.
P.R. Act No. 230 of May 12, 1942, establishes the mandatory requirement for all minors to
attend school. However, the law also allows for limited employment of minors by stating that
“no minor under sixteen years of age shall be employed, permitted, or suffered to work in
Puerto Rico in, or in connection with, any gainful occupation… provided, that minors
between fourteen and less than sixteen years of age may be employed outside class hours and
during school vacations”, as long as the occupation is permitted by law.
Act No. 230 regulates the minor’s weekly schedule:
•
No minor can work more than six consecutive days in a week.
•
The maximum daily hours that a minor can work are eight while the maximum
weekly hours are forty.
•
A minor must enjoy an hour lunch break after four hours of continuous work.
•
If Puerto Rico public schools are open, the total school hours and work hours cannot
exceed eight hours.
•
Minors between the ages of fourteen and sixteen are not allowed to work before eight
in them morning or after six in the afternoon.
•
Minors between sixteen and eighteen years old are not able to work before six in the
morning or after ten at night.
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•
The statute contemplates an exception for concerts or theatrical performances, in
which a minor is allowed to work up to midnight. The Secretary of Labor and Human
Resources must approve prior to the event.
An employer who hires a minor must comply with the Job Description (Form NNT-16) and
School Record (Form NNT-70) forms of the Department of Labor and Human Resources of
the Commonwealth of Puerto Rico. The employer must submit both forms along with an
original birth certificate of the minor in order for the Department of Labor and Human
Resources to issue a certificate authorizing the minor to work. The certificate must be
returned to the Department once the period of employment expires. Any violation to the act
might result in sanctions.
8. Regular Hours and Overtime
Applicable Laws:
• P.R. Act No. 379 of May 15, 1948, 29 LPRA §271 et seq.
• Fair Labor Standards Act (“FLSA”)
P.R. Act No. 379 of May 15, 1948, 29 LPRA §271 et seq, as amended, along with the Federal
Fair Labor Standards Act (“FLSA”) govern the wage and hour requirements for non-exempt
employees in Puerto Rico. Under the FLSA and Act No. 379, regular hours apply to all
employees with the exclusion of executives, professionals, administrators, travel agents,
traveling salespersons, domestic employees, and motor vehicle sales persons who earn
commissions. The list of exclusions is included in Regulation No. 13 of the Commonwealth’s
Minimum Wage Board and is kept up to date with FSLA regulations.
The FLSA applies to: employers with an annual business volume exceeding $500,000; or,
employers who do not meet the stated annual volume but whose employees are engaged
directly in interstate commerce or in the production of goods for interstate commerce.
P.R. Act No. 379 dictates a maximum of eight regular hours of work per day, and a maximum
of forty regular hours of work per week.
Under Puerto Rican law, FLSA-covered employees who work in excess of eight regular hours
during a twenty four hour period must be compensated at one and a half times their hourly
wage, unless a Mandatory Decree or Wage Order of the Puerto Rico Minimum Wage Board
established a higher overtime rate. If the worker does not belong to an FLSA-covered
industry, but has worked for more than eight regular hours during a twenty four hour period,
the compensation will equal double their regular hourly wage, as long as their work hours do
not exceed forty hours. This last condition may also be waived as long there is a Mandatory
Decree or an agreement between the parties.
Weekly:
Under Federal Law
Daily:
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• The workweek is a fixed and regularly
•
recurring period of seven consecutive
24-hour periods. It does not need to be
calendar nor the same for all
employees. The beginning of the
workweek, once established, may be
changed only if the change is intended
to be permanent and is not designed to
circumvent the overtime requirements
of the FLSA.
FLSA requires employers to pay at a
rate of time and one half (1½) the
regular rate for all hours worked in
excess of forty (40) hours during the
workweek.
• There is no requirement to pay
daily overtime
under Federal law.
compensation
Under Puerto Rico Law
Weekly:
Daily:
• Puerto Rico’s overtime pay applicable
• FLSA-covered employees who
to employers and employees covered
work in excess of eight (8) regular
by the FLSA is the same provided by
hours during a twenty four hour
the Federal statute, that is, time and one
period must be compensated at
half (1½) the regular rate for all hours
one and a half times (1½) their
worked in excess of forty (40) hours
regular hourly wage, unless a
during the workweek.
Mandatory Decree or Wage Order
• Employers not covered by the FLSA
of the P.R. Minimum Wage Board
must pay their employees at two (2)
established a higher overtime rate.
times their regular rate for any hours
• Employers not covered by the
worked in excess of forty (40) hours
FLSA must pay their employees at
during the workweek.
two (2) times their regular rate for
any hours worked in excess of
eight (8) regular hours during a
twenty four hour period.
• There is a recurring problem with
daily
overtime.
While
the
workweek is fixed, the Puerto
Rico Department of Labor has
taken the position that the day is
not. For purposes of daily
overtime computation, the P.R.
DOL takes into account any
twenty-four (24) hour period.
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Failure to comply with the law regarding the payment of wages, including overtime, will
result in the employer being liable for: (1) the principal amount not paid, plus (2) a penalty in
the amount of an equal sum. The employer may also be liable for other costs, expenses,
interests, and attorneys’ fees.
The statutory time limitation for claims regarding unpaid wages is three (3) years beginning
on the date of termination of employment.
Summary Table of Regular Hours and Overtime in Puerto Rico
Weekly Hours and Overtime
Maximum
Rate
Overtime
Rate
Hours
Per Week
Per Week
40
Hourly
Excess of 40
1.5x hourly wage
hours
40
Hourly
Excess of 40
2x hour wage
hours
Daily Hours and Overtime
FLSA covered
employers
Employers not covered
by FLSA (only P.R.
Act No. 379 is
applicable)
8
8
Hourly
wage
Hourly
wage
Excess of 8 hours
per day
Excess of 8 hours
per day
1.5x hourly wage
2x hourly wage
9. Flexible Schedule
Applicable Law: P.R. Act No. 83 of July 20, 1995, 29 LPRA §271
A flexible work schedule may be established by mutual agreement between the employer and
the employee, as indicated by Puerto Rico Act No. 83 of July 20, 1995 (Act No. 83). Either
side can refuse to enter into such an agreement.
If agreed upon, the law allows for the employee to advance the work period or delay the meal
period for up to three hours. The hours resulting from the change are not considered overtime.
Act No. 83 benefits employers by allowing employees to adjust their starting and quitting
times for reasons of personal convenience. By this adjustment, employers do not incur the
obligation of paying the overtime premium that would otherwise accrue if the employee
reported for duty the following day without having had the minimum rest period between
shifts.
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The following requirements must be met to validate all flexible work schedules:
1. Existence of a voluntary agreement between employer and employee. No reprisals may be
taken against an employee solely because of a refusal to enter into a flexible hours
agreement.
2. The employee may start the workday up to three hours earlier or later than his regular
starting time, without incurring in daily overtime, as long as no work is performed during
a rest period of at least twelve consecutive hours between the end of one shift and the
beginning of the next, and the employee does not work more than eight hours during the
workday.
3. The employee’s shift must be worked consecutively. The only valid interruption will be
the regular meal period, as provided by law.
4. It is prohibited to fraction an employee’s daily work shift which is subject to a flexible
schedule.
10. Meal Period
Applicable Law: P.R. Act No. 379 of May 15, 1948, 29 LPRA §271et seq.
Per disposition of P.R. Act No. 379 of May 15, 1948, 29 LPRA §271, all employers are
required to grant their non-exempt employees a daily meal break. The break will consist of a
minimum of one hour commencing not before the end of the third (3rd) hour of work and not
later than at the beginning of the sixth (6th) hour of work.. The law is intended to protect
workers by preventing them from working over five consecutive hours without taking their
meal break.
Act No. 379 entitles employees who are requested or allowed to work during the mandatory
meal times to a remuneration of two times their regular hourly rate. This penalty is
independent from any entitlement to overtime pay. For example, a non-exempt employee who
works nine consecutive hours must be paid both the meal period at double time and the ninth
hour at the applicable daily overtime rate.
Act No. 379 establishes that meal breaks may be reduced by written agreements between the
employers and the employees, or the unions which represent them, as long as all parties are
benefited by the reduction. Meal period reductions cannot exceed thirty minutes with the
exception of nurses, security guards, and croupiers; in which case, the period may be reduced
to twenty minutes.
Act No. 379 grants a second meal break to any employee who works for a period longer than
five hours after their first meal break. This meal break may be reduced or waived if the
employee only works two hours or less in excess of his/her regular shift. The waiver must be
stipulated in writing.
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11. Uniforms
Applicable Law: P.R. Act No. 180 of 1998
P.R. Act No. 180 of 1998 establishes that any employer, who requires the use of uniforms in
the workplace, will have to provide them free of charge to its employees. Act No. 180 does
not require the employer to cover the cost of laundering the uniforms provided to its
employees, although the Puerto Rico Department of Labor has taken the position that the
employer should cover such cost. Nonetheless, the Department has been lax on this matter
since it has not been adopted by law.
12. Regulations of Operation of Commercial Establishments
Applicable Law: Closing Law of Puerto Rico, 29 LPRA §301 et seq.
The Closing Law of Puerto Rico requires the closing, during certain holidays and on Sundays,
of certain retail establishments opened to the general public.
Partial Closing Day:
5am – 11am
Sunday
Drugstores and other commercial establishments that operate pharmacies may open on
Sundays between 5:00 a.m. and 11:00 a.m., but can only sell certain items. Commercial
establishments not exempted from the applicability of the Closing Law must close their
operations in the following days:
Full Day Closing:
January 1st
January 6th
Good Friday
Easter Sunday
Mother’s Day
Father’s Day
General Elections Day
Thanksgiving Day
December 25th
Drugstores and other commercial establishments that operate pharmacies may open on Full
Day Closings, but can only sell certain items.
Work performed during the closing hours on Sunday and during the Full Day Closing is at the
discretion of management and has no time limitation. This work, however, is limited to
anything related to the continuity of the operations and maintenance of facilities. Non-exempt
employees will be paid double their regular hourly rate of pay for their time worked during
the days and hours of mandatory closing to the public.
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The Closing Law establishes that the following business establishments are not subject to the
mandatory closing hours/days:
•
hotels, inns, condo-hotels, airports, seaports;
•
those located within the demarcation of an old or historic zone dedicated primarily to
the sale of goods or to provide services of tourist interest;
•
those located in places exclusively engaged in the development of cultural, artisan,
recreational or sports activities;
•
those dedicated mainly to the preparation and the direct sale to the public of cooked
meals;
•
pharmacies;
•
gasoline stations and business establishments located therein;
•
bookstores, newsstands, booths or kiosks for the sale of books, magazines,
newspapers and literary or musical publications or recordings;
•
those that operate as part of the facilities of a funeral home or cemetery;
•
the establishments located in the marketplaces;
•
those operated exclusively by their owners or their relatives within a second degree of
consanguinity or affinity;
•
and those that are owned by natural or legal entities and that do not have more than
twenty five employees in their weekly payroll, including employees by contract.
The law establishes a minimum hourly rate of $11.50 to be paid to all non-exempt employees
of a covered establishment who work on Sundays. The following entities are excluded from
the new minimum hourly rate of $11.50 for Sunday work:
1. establishments operated exclusively by their owners or their relatives within a second
degree of consanguinity or affinity;
2. those that are owned by natural or legal entities and that do not have more than twenty
five employees in their weekly payroll, including employees by contract;
3. the commercial establishments that operate in hotels, inns, condo-hotels, airports,
seaports;
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4. those located in places exclusively engaged in the development of cultural, artisan,
recreational or sporting activities;
5. those dedicated mainly to the preparation and direct sale of cooked meals to the
public;
6. bookstores, newsstands, booths or kiosks for the sale of books, magazines,
newspapers and literary or musical publications or recordings;
7.
galleries, workshops, centers, booths that sell Puerto Rican works of art and artisanry;
8. establishments located in the marketplaces;
9. and those that operate as part of the facilities of a funeral home or cemetery.
13. Employee Leaves
Applicable Law: See Table
Puerto Rican and Federal law requires employers to grant employee leaves under the
circumstances detailed below. Those described as paid leaves are mandatory by law, while
those described as optional may be paid by the employer to the employee if the employer so
chooses.
TYPE OF LEAVE
Vacation
(only applicable to
non-exempt employees)
Maternity
PAYMENT LENGTH
Paid
1¼ days/month
(15 days per year)
APPLICABLE LAWS
Act No. 180 of July,
1998, 29 LPRA §250
Paid
8 weeks
Sick
(only applicable to
non-exempt employees)
Witness in criminal crimes
Paid
1 day/month
(12 days per year)
Act No. 3 of March 13,
1942, 29 LPRA §467
Act No. 180 of July 27,
1998, 29 LPRA §250
Paid
Days summoned
Jury Duty
Paid
Breast-feeding period
Paid
Renewal of driver’s license
required to work
Military
Paid
Paid
Act No. 122 of July 12,
1986, 29 LPRA §193
Up to 15 days
Act No. 281 of September
27, 2003, 34 LPRA §1735
One hour a day
Act No.427 of December
for up to 12
16, 2000, 29 LPRA §478
months
and Act No. 95 of April
23, 2004
2 hours
Act No. 22 of January 7,
2000, Art. 3.02(b)
Cumulative length Act No. 62 of June 23,
up to five years
1969, Act No. 203 of
December 14, 2007, Act
No. 18 of March 18,
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Sports
Optional
Chauffeur´s Social Security
Optional
Automobile Accident
Optional
Family and Medical
Optional
State Insurance Fund
Optional
Non-Occupational Disability Optional
(“SINOT”)
Up to 30 days per
year
One year;
renewable
12 months
reinstatement
right
Six months
reinstatement
right
Up to 12
workweeks in a
12 month period
12 months
reinstatement
right
12 months
reinstatement
right
2003,, Act No. 26 of
March 18, 2010, and
USERRA
Act. No. 49 of June 27,
1987, 15 LPRA §1101
Act No. 24 of January 5,
2002
Act No. 428 of May 15,
1950, 29 LPRA §681
Act No. 138 of June 26,
1968, 9 LPRA §2051
August 5, 1993, 29 USCA
§2601
Act No. 45 of April 18,
1935, 11 LPRA§ 7
Act No. 139 of June 26,
1968, 11 L.P.R.A. §201 et
seq.
14. Vacation and Sick Leave
Applicable Law: P.R. Act No. 180 of July 27, 1998, 29 LPRA §250 et seq.
The statutory requirements for the accrual and enjoyment of vacation and sick leaves applies
to non-exempt employees in Puerto Rico as determined in P.R. Act No. 180 of July 27, 1998
(“Act No. 180”).
Employees who work more than 115 hours per month, and who are covered by the provisions
of Act No. 180, have the right to accrue vacation leave at a rate of 1 ¼ days per month and
sick leave at a rate of 1 day per month
Accrual Rate of Vacations and Sick Leave:
Per Month
Per Year
1¼ days per month
15 days
Vacations*
1
day
12
days
Sick Leave*
*Provided that the employee works at least 115 hours during the month
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Vacation and Sick Leave Mandatory Decree Guidelines:
Date of
Hire
Prior to
August 1,
1995
Employees covered by a mandatory decree (“MD”) with more than fifteen
(15) days of vacation and/or for more than twelve (12) days of sick leave per
year, will continue enjoying those benefits.
Employees covered by a MD providing for vacation and/or sick leave
benefits below the statutory limits, will continue to receive the benefits
provided by the specific decree covering the employer’s operation, until the
P.R. Secretary of Labor revises those benefits to equate them with the new
statutory limits as soon as the economic conditions of the particular industry
allow this to be done.
After
August 1,
1995
Employees will only be entitled to the lesser benefit provided by the
statutory limits as stated in Act No. 180 or the one provided by the
mandatory decree applicable to the industry in question.
Employees are not entitled to accumulate vacation leave during the probationary period of the
first 90 days of work. However, if the employee becomes a regular employee, the accrual of
vacation will apply retroactively to the first day of work. Sick leave will be accrued from the
beginning of the probationary period.
a. Vacation and Sick Leave Benefits
Vacation and sick leave are enjoyed and paid based on the regular working day prevailing
at the time of payment and/or enjoyment of this benefit. The last two months of
employment of the employee in question may be taken in consideration in calculating
leave entitlement pay.
In the case of employees with different daily schedules, the regular day will be
determined by dividing the total regular hours worked during the month by the total
working days. In those instances in which the daily work schedule of the employees
cannot be determined, they will be computed on the basis of eight hours per day.
Vacation and sick leave time will be considered time worked for purposes of the accrual
of said benefits and will be equivalent to at least the regular hourly rate earned by the
employee during the month in which said leave was accrued. In the case of employees
whose salary is based on non-discretionary commissions or other incentives, the employer
may calculate the regular hourly salary by dividing the total commissions or incentives
earned during the year by fifty-two weeks.
- 17 -
b. Vacation
Vacation days may be enjoyed after the first full year of employment on a consecutive or
fragmented manner. Mutual agreement between the employer and the employee is needed
to fragment the vacations; nonetheless, the employee will always maintain a right to enjoy
at least five consecutive working days of vacation leave per year.
The employer will be responsible for establishing and/or authorizing the employee’s
vacation schedule so as to prevent any interruption of normal operations of the business.
Vacation leave may be accrued for up to two years, by mutual agreement between the
employer and the employee. If an employer fails to provide vacation leave to an employee
after he/she has accrued the same in excess of two years, the employer must grant the
employee vacation leave for the total number of days accrued, and pay the employee
twice the amount for the vacation accrued in excess of two years.
In case the employee’s employment is terminated for whatever reason after the first ninety
days of probationary employment, the employer must pay the employee the total vacation
leave he/she has accrued, even if it is less than one year’s accrual. At the written request
of the employee, the employer may “liquidate” or pay-off the vacation leave accrued by
the employee in excess of ten days.
c. Sick Leave
Except in cases of acts of force majeure, the employee must notify about his/her illness as
soon as possible and not later than the same day of his/her absence to work.
The enjoyment of sick leave does not excuse the employee from compliance with those
rules of conduct validly established by the employer. For example, an employer may
require that an employee who’s absence exceeds (2) working days provide a medical
certificate and periodical reports on his/her continuing health problems in compliance
with the rules of attendance. Sick leave not taken by the employee during the year will
remain accrued for successive years up to a maximum of fifteen (15) days.
Failure to comply with the payment of vacation and sick leave as required by law will
result in the employer being liable for the principal amount not paid, plus an equal sum as
a penalty for failure to pay; and costs, expenses, interest and attorney’s fees.
15. Family and Medical Leave Act (FMLA)
Applicable Law: Family and Medical Leave Act of 1993, 29 U.S.C. § 2601 et seq.
The Family and Medical Leave Act of 1993 requires employers with 50 or more employees in
a 75 mile-radius, to grant certain eligible employees up to 12 weeks per year of unpaid leave
time for the:
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1.
2.
3.
4.
Birth and care of a newborn child
Adoption or foster placement of a child
To care for a family member with a serious health condition, or
For treatment of the employee’s own serious health condition.
The FMLA applies concurrently with other Puerto Rico laws providing leave for the same
reasons, i.e., maternity, workers’ compensation, and non-occupational disability leaves. Any
paid or otherwise compensated leave taken under said laws may also count towards the
twelve-week leave entitlement provided by the Family and Medical Leave Act.
Employees are eligible for a family or medical leave if they have worked for the employer for
a minimum of a year or 1,250 hours during the previous 12 months. Additionally, to qualify
for said leave, employees must comply with certain notification and medical certification
requirements.
During the pendency of the leave, the employer will maintain the coverage of the employee’s
previous health plan and other health care benefits, without altering them. At the end of the
leave, the employee must be reinstated in his/her former position or an equivalent one with
the same benefits.
If the reasons for the unpaid leave also qualify for a paid leave entitlement, the employer can
require the employee to substitute his/her accrued sick, vacation or personal paid leave, for
any portion of the family and medical unpaid leave.
As of January 28, 2008, the National Defense Authorization Act of 2008 (H.R. 4986) has
been in effect. Its section 585 amends the FMLA to allow a spouse, son, daughter, parent or
next of kin to take a leave of absence up to twenty-six workweeks during a twelve-month
period to take care of a member of the U.S. Armed Forces, National Guard, or Reserve
suffering a service injury or illness. Additionally, the FMLA has also been amended by H.R.
4986, to provide, under certain circumstances, for employees to take up to twelve workweeks
if they are family members of a service member called up to active duty. Both leaves may be
taken on an intermittent or reduced schedule basis. The amendment also authorizes the
substitution of paid leave for unpaid leave. There are prior notification and medical
certification requirements that the employee has to comply with before taking family and
medical leave.
16. Uniformed Services Employment and Reemployment Rights Act (USERRA)
Applicable Law: USERRA, 38 U.S.C. §§4301-4335
Useful Link: http://www.dol.gov/vets/programs/userra/main.htm
The Uniformed Services Employment and Reemployment Rights Act of 1994 (USERRA)
was created to strengthen the Veteran’s Reemployment Rights (VRR) Statute. The act serves
as a protection for veterans and members of the Reserve who wish to regain their rights to
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civilian jobs and benefits. It serves as prevention against discrimination regarding the
recruitment, retention, promotion, and reemployment of veterans.
USERRA requires that employees notify, with as much anticipation as it is possible, the need
for the leave. Additionally, said leave cannot exceed five years.
Employee Rights under USERRA include:
1. An employee on a military leave has the same rights as employees on sick leave.
2. Employees maintain the same seniority rights when they return as they would have
enjoyed, had they remained working instead of joining the armed forces.
3. Before entering service, the employee has the right to enjoy any leave of absence with
pay that had been previously accrued.
4. Employees maintain the employer’s health coverage, even if they receive further
health benefits from the armed forces. The coverage will be up to 24 months or the
day after failure to return to his position, whichever is less.
5. All military service time will count towards the employee’s benefits and retirement
plan.
Leave
Employee’s Responsibility
Employer’s Responsibility
1 – 30
days
Report to work during the
next scheduled work shift
after a reasonable time of
rest.
Reinstate the employee to the
position held before the leave.
31 – 90
days
Report to work within 14
days of the end of service.
Reinstate the employee to the
position held before the leave.
91- 180
days
Report to work within 14
days of the end of service.
Reinstate the employee to the
position held before the leave
or the next in scale according
to the employee’s seniority.
Over
180
days
U.S.: Report to work within
90 days of the end of service.
P.R.: Request reinstallation
within 180 days of the end of
service, as long as the service
was of regular military duty
(Act No. 203 of December
23, 2007).
Reinstate the employee to the
position held before the leave
or the next in scale according
to the employee’s seniority.
- 20 -
Possible Dismissal
Without a just
cause, the employer
cannot dismiss the
employee for 180
days.
Without a just
cause, the employer
cannot dismiss the
employee for 180
days.
Without a just
cause, the employer
cannot dismiss the
employee for one
year
17. Compensation Procedures and Wages /Payroll Deductions
Applicable Law: P.R. Act No. 17 of April 17, 1931, 29 LPRA §173 et seq.
a. Compensation Procedures
According to Puerto Rico law, employees must be paid on a weekly basis, a bi-weekly basis,
or every 15 days. Mutually agreed upon pay advances can be lawfully deducted from the next
paycheck by the employer.
Employees have the right to choose their preferred payment method. The primary methods of
payment of salaries in Puerto Rico include:
1.
2.
3.
4.
5.
Cash
Check
Direct Deposit
Electronic Transfer of Funds
Payment to a Payroll card
At the moment of selecting their preferred wage payment method, employers are required to
provide their employees information regarding electronic fraud and the degree of
responsibility of the employee, the employer as well as the bank in such cases. Further,
employers are also required to deliver to each employee a voucher as evidence of the salary
deposited or transferred. The employee has the option of having the voucher delivered
through electronic means.
Please consult Act No. 17 to review the salary deduction guidelines, since many deductions
are prohibited unless covered by law or the Act.
Crucial Information for Employers:
1. Returned checks may result in a 100% penalty for the employer
2. Employers who do not compensate their employees within 10 days of the official pay
day will commit a criminal offense that could result in prison time or other penalties.
3. Employers who default on their payments may be reported to the Secretary of Labor.
b. Payroll Deductions
Under P.R. Act No. 17, deductions from an employee’s wages are generally prohibited,
unless they are covered by one or more of the following exceptions or are otherwise
authorized by law:
- 21 -
1.
for payment to a non-profit association authorized to render medical services in
Puerto Rico;
2.
for the purchase of United States or Puerto Rico Savings Bonds;
3.
for payment to a properly organized credit union operating either under Puerto
Rico or Federal law;
4.
for check-off of union dues;
5.
as the employee’s contribution towards any type of plan not covered by ERISA,
such as pension, saving, or retirement plan, or an annuity life, life, accident or
health insurance plan or any combination of these plans, if the total employee
contribution to any combination of these plans does not exceed the total Company
contribution and prior authorization for the deduction has been obtained from the
Secretary of Labor of Puerto Rico. Obtaining such approval is normally a routine,
but time consuming procedure;
6.
to cover salary advances from the wages which correspond to the week in which
the advance was made; however, no amount can be retained from an employee’s
wages in excess of the total amount that was advanced;
7.
for contributions to charitable institutions in Puerto Rico;
8.
for contributions to individual retirement accounts;
9.
for contributions to ERISA benefits plans;
10.
for a tax debt payment plan, authorized in writing by the employee, and authorized
and certified by Puerto Rico’s Treasury Secretary;
11.
for contributions made by the employee to the local community schools;
12.
for buying stocks issued by the Company for which the employee works, when
this is authorized by the employee in writing and in compliance with certain
requirements established by Puerto Rico Act No. 249 of August 30, 2000;
13.
for donations to the fund-raising campaigns of the University of Puerto Rico.
Other deductions that are required or authorized by law include those for normal payroll taxes
or as garnished amounts.
- 22 -
18. Christmas Bonus
Applicable Law: P.R. Act No. 148 of June 30, 1969, 29 LPRA §501
The privilege of an annual Christmas bonus applies to all employees in Puerto Rico, including
executives, professionals, administrative employees, and outside salespersons.
Employers must pay a Christmas bonus to all employees who worked a minimum of 700
hours during a one year period beginning on October 1st and ending on September 30th of the
following year, as long as the employer has generated sufficient profits to do so.
The law establishes that the payment period for the bonus is from December 1st to December
15th of each year, but allows for a different payment date as long as it is agreed upon by both
the employer and the employee. This agreement must be in writing.
The law provides for the payment of 6% of the employee’s total salary up to a maximum of
$10,000. However, all employers who employ fifteen employees or less, shall pay a bonus of
3% of the employee’s total salary up to a maximum of $10,000.00.
Employers who fail to pay the Christmas bonus on time to its employees will face the
following penalties:
Time of Overdue Payment
Up to 6 months
More than 6 months
Penalty
50%
100%
Payment
bonus payment x 1.5
bonus payment x 2
Other provisions for the annual Christmas bonus include:
1. Total bonus payments may not exceed 15% of the company’s net profits derived from
their Puerto Rico operations.
2. Employers seeking to be partially or completely exempt from their legal obligation to
pay Christmas bonuses because of insufficient profits must submit their certified
financial statements to the Secretary of Labor and Human Resources by November
30th. If the filing is timely completed, the law authorizes the Secretary of Labor to
assign auditors to inspect the Company’s books and records in verification of the
profit and loss statement.
3. Employers legally obligated to pay employees who no longer work for the company at
the time of payment of the Christmas Bonus, and who cannot be located, are required
to deposit the amount at the Department of Labor and Human Resources.
Exclusions and exceptions:
- 23 -
1. Persons employed in farm activities, household duties, family residence or charitable
nonprofit institutions.
2. Those who work as officials and employees for the Commonwealth of Puerto Rico, its
municipalities, public corporations, or who hold office, position or employment of a
continuous or irregular character.
3. Workers or employees who receive an annual bonus by collective agreement unless
the agreed bonus is less than provided by law.
19. Weekly Day of Rest
Applicable Law: Puerto Rico Act No. 289 of 1946, 29 LPRA §295
The day of rest is a calendar period of twenty-four consecutive hours during a calendar week.
No work should be performed by non-exempt employees if any work has been performed
during all the other six calendar twenty-four hour periods of the week. The day of rest need
not fall on any particular calendar day.
The penalty for failing to grant a day off pursuant to Act No. 289 is double the amount the
hourly rate of the employee for all hours worked on a day a day of rest. Any absence in the
previous six calendar twenty-four consecutive hour periods, regardless of the reasons for the
absence, will render the employee ineligible to receive this payment.
20. Unemployment
Applicable Law: Act No. 74 of June 21, 1956, 29 LPRA §701 et seq.
The Puerto Rico Employment Security Act, No. 74 of June 21, 1956, 29 LPRA §701 et seq,
covers all workers in the jurisdiction of Puerto Rico. Employers are required to pay the
Secretary of the Treasury a payroll tax that could be adjusted annually.
Employees may be eligible for unemployment benefits, for up to 26 weeks per year, if their
services were conducted in the United States, the U.S. Virgin Islands, and/or Canada, or as
long as the work is controlled from Puerto Rico and the employee is not covered by other
unemployment acts of any other State, the Virgin Islands or Canada. Unemployment
premiums are based on the employer’s experience rating.
21. Jury Duty
Applicable Law: P.R. Act No. 87 of June 26, 1964, 29 LPRA §152
P.R. Act No. 87 of June 26, 1964, requires leave and reinstatement of an employee called to
jury duty, provided reinstatement is requested within fourty-eight hours following the
termination of jury duty. The employee on jury duty is entitled to paid leave up to a
maximum of fifteen working days and to any jury duty pay for daily appearances provided by
the Government. If jury duty extends beyond fifteen days, the employee is entitled to credit
his time for jury duty to his/her vacation leave.
- 24 -
The employee must notify the employer that he or she has been called to jury duty at least
five days in advance in order to receive the benefits. The employee must also give the
employer a certification from the court clerk that he or she was called to jury duty.
The Criminal Code of Puerto Rico punishes every employer who authorizes, consents, or
carries out the discharge of a juror. It also criminalizes threats to discharge, actual discharge,
removal, reductions in salary, demotions, and attempts to impose demotions or onerous
working conditions on an employee due to the employee’s service as a juror for any court of
justice in the Commonwealth of Puerto Rico or the federal court sitting in the District of
Puerto Rico. A person or entity found guilty of violating of violating the Criminal Code shall
be subject to imprisonment for a period not exceeding six months or fined $500, or both, at
the discretion of the court.
The Federal Jury Duty Improvement Act of 1978 also protects employees who are called to
jury duty in federal cases. It prohibits the discharge, threat of discharge, and intimidation of
an employee due to his/her service as a juror. The employee must be reinstated at the
conclusion of his/her jury duty without any loss in seniority, and will continue to participate
in health benefits and other benefits enjoyed prior to his/her service.
In June 2007, the Chief Judge of the United States District Court for the District of Puerto
Rico issued a Standing Order urging employers to pay employees who perform jury service at
their regular rate of pay (not to count as vacation pay) for all the time they serve as jurors.
The Court informed that it will enforce these directives
22. Unions
Applicable Law: Taft-Harley Act or Labor Management Relations Act of 1947
The Taft-Harley Act or Labor Management Relations Act of 1947 applies to Puerto Rico in
order to regulate relations between employers and unions, union representation, elections,
negotiations of collective bargaining agreements and related matters.
23. Drug Testing Act
Applicable Law: Act No. 59 of August 8, 1997, 29 LPRA §161 et seq.
Puerto Rico Law does not impose mandatory drug testing for employees; therefore private
employers are not obligated to set up drug testing programs. However, any employer who
wishes to set up a drug testing program should comply with the requirements established by
the Law to Regulate Tests to Detect Controlled Substances in the Private Sector.
Employers that comply with the requirements of Act No.59 of August 8, 1997, limit their
liability against employee lawsuits. However, there are exceptions to the limitations of
liability established by Act 59. These exceptions include all acts that cause harm to the
employee as a consequence of the employer’s fraud, fault, or negligence. Nonetheless, the
limitations apply if the employee decides to accept benefits under the workmen’s
- 25 -
compensation statute in relation to the damages suffered as a result of the employer´s fraud,
fault, or negligence.
Employer’s who establish the drug testing programs must comply with the following
requirements (Act No. 59 of August 8, 1997, 29 LPRA §161b):
1. Tests shall be conducted in a uniform and consistent manner for all employees and
candidates for employment;
2. There must be a written program, adopted by the employer and notified to the
employees, which shall contain its effective date and shall identify the law that
authorizes its adoption. This notice shall be given at least sixty days before its
effective date and to candidates for employment upon filing a job application with the
employer.
3. Tests shall be administered according to the program adopted by the employer.
4. The employer shall pay the expenses of the controlled substances detection tests.
5. The employer shall deem as working time, the time needed to submit to the tests and
shall compensate the employees for such time, correspondingly.
6. The absences of an employee to attend a rehabilitation program may be charged, in
the first place, on sick leave, and then on vacation leave. Should all paid leave be
exhausted, the employee shall be entitled to leave without pay for a maximum of
thirty days.
7. The drug tests shall be made through a urine sample, except for those circumstances in
which it is not possible. The sample shall not be submitted to any type of test other
than that which is strictly necessary for the detection of controlled substances.
8. One person shall take the sample handed by the employee at the exact moment that
the employee abandons the bathroom. For greater reliability, the temperature of the
sample shall be taken in the presence of the employee who has been submitted to the
test, as a measure to determine if the sample has been adulterated.
9. In the event that the adulteration of a sample is determined, the same shall be
discarded and the employee shall be requested to provide a new one, this time in the
presence of a person of his/her same sex, who is a member of the laboratory
personnel.
10. Every sample with a positive result shall be submitted to a second corroborative
analysis by the gas spectrometry chromatography method. Only after having obtained
- 26 -
a positive corroborated result shall a supervising physician, contracted by the
laboratory conducting the tests, ask the person whose result was positive if he/she is
taking any medication that could have some effect on the result of the test.
11. The employee is entitled to contract another laboratory to obtain a second result from
the same sample.
12. If the test conducted by the employer is positive, and the second test made at the
request of the employee is negative, the employer may suggest three laboratories, of
which the employee must choose one, so that a third test can be conducted at the
expense of the employer. The result of this third test shall be binding on both parties.
13. Every employee may be submitted to a maximum of two tests each year, unless a duly
corroborated positive result has been obtained from one of such tests or as part of a
counseling, treatment or rehabilitation program.
14. Before the employer can take any disciplinary action based on the positive result of a
test, said result shall have to be verified through a confirming laboratory test. The
employee or candidate for employment shall have the opportunity to notify said
laboratory of any information which is relevant to the interpretation of said result,
including the use of prescribed or over the counter drugs.
No dismissal may occur as a result of a first positive drug test, though an employer’s policy
may state that the employee must submit to a rehabilitation program as a condition for
continued employment. Upon return from, and successful completion of, an appropriate
rehabilitation program, the employee will be subject to the necessary follow-up drug testing.
In the event an employee refuses to participate in a rehabilitation program, or if the results of
any drug tests conducted after the completion of a rehabilitation program are positive, the
employer may impose the corresponding disciplinary measures pursuant to its rules of
conduct. Upon imposing the disciplinary measures, the employer may do so taking into
account the relationship of the employee’s conduct with his/her functions, the effect on the
good and normal functioning of the employer’s business or enterprise, and the risk to the
safety of other employees and the public in general.
24. Dismissal Act
Applicable Law: P.R. Act No. 80 of May 30, 1976, 29 LPRA §185 et seq.
Under P.R. Act No. 80 of May 30, 1976, any person hired for an indefinite period of time,
and discharged without just cause, is entitled to receive a severance payment which is the
equivalent of: two month’s pay plus one week of pay for each full year of service, if he/she
has less than five years of service. If the employee has at least five but less than fifteen years
- 27 -
of service, he/she is entitled to receive three months’ pay plus two weeks per year of service;
and if more than fifteen years of service, the employee is entitled to receive six months’ pay
plus three weeks per year of service.
Act No. 80 establishes various situations under which a discharge of an employee is
considered as “just cause”. These include:
1. That the worker incurs in a pattern of improper or disorderly conduct.
2. The attitude of the employee of not performing his work in an efficient manner, or of
doing it belatedly and negligently or in violation of the standards of quality of the product
produced or handled by the establishment.
3. The employee's repeated violation of the rules and regulations established for the
operation of the establishment provided a written copy thereof has been opportunely
furnished to the employee.
4. Full, temporary or partial closing of the operations of the establishment.
5. Technological or reorganization changes as well as changes of style, design or the nature
of the product made or handled by the establishment, and changes in the services rendered
to the public.
6. Reductions in employment made necessary by a reduction in the anticipated or prevailing
volume of production, sales or profits at the time of the discharge.
Act No. 80 also establishes situations where the discharge of an employee is NOT considered
as “just cause”. These include:
1.
the mere whim of the employer, or without cause relative to the proper and normal
operation of the establishment;
2. an employee’s collaboration, or expressions, made pertaining to his/her employer's
business before any administrative, judicial or legislative forum in Puerto Rico when said
expressions are not of a defamatory character nor constitute disclosure of privileged
information according to law.
Employers must adopt rules of conduct that are both reasonable and non-discriminatory. An
employee who does not comply with the rules of conduct promulgated by the employer could
be subject to disciplinary action up to termination of employment. However, along the same
lines, employers who dismiss workers without just cause are imposed penalties.
- 28 -
Act No. 80 serves as the sole remedy for discharge without cause, although other actions such
as tort or discriminatory actions can also be brought against the employer, if they apply. The
law establishes the compensation awarded to those individuals hired for indefinite periods
and discharged without just cause. Although the law explicitly covers employees who are
hired for an indefinite period of time, it does not automatically exclude workers with a
defined work period, since in some instances, Act No. 80 may serve to protect them as well.
Nonetheless, the law will never apply to an employee that is working under a probationary
period.
Employees hired for a fixed period of time are not covered by Act No. 80, and if terminated
prematurely for grounds not justified under their contract’s terms, could sue for breach of
contract. However, an employee who renders services under a contract for a specific time
period would be covered under Act No. 80 if the practice and surrounding circumstances tend
to indicate an expectancy of continuous employment. In such a case, the employee will be
considered hired for an indefinite period of time and covered by Act No. 80.
In Puerto Rico, specific legislation regulates the relationship between temporary employment
agencies and client companies. Act No. 26 of July 22, 1992 imposes duties regarding
benefits, rights and working conditions of temporary employment agencies’ personnel.
25. Americans with Disabilities Act (ADA)
Applicable Law: The Americans with Disabilities Act (ADA), 29 USCA §706 et seq.
The Americans with Disabilities Act (ADA) applies to Puerto Rican companies and
individuals who employ fifteen or more employees. Its main objective is to protect all
qualified, disabled employees, from discrimination. ADA requires that employers grant all
qualified, disabled employees equal opportunities in all aspects of their jobs. The Act requires
employers to make reasonable accommodations for disabled employees or applicants. Failure
to comply with the Act could result in penalties against the employer which include:
1. Compensatory and punitive damages
2. Reinstatement of the employee with or without accommodation
3. Back and front pay as remedies.
Puerto Rican legislators passed Act No. 44 of July 2, 1985, as amended, which serves to
complement ADA. Act No. 44, which mirrors the ADA, also prohibits discrimination against
employees as a result of their physical and/or mental disabilities. The Act applies to both
public and private entities and provides administrative remedies that include fines of up to
$5,000.00 and cease and desist orders.
- 29 -
Per Act No. 355 of September 16, 2004 and the ADA, as amended, it is now a legal
obligation of all courts and administrative agencies to liberally interpret all statutes related to
the rights of disabled individuals.
26. The Worker Adjustment and Notification Act (“WARN”)
Applicable Law: 29 USCA §2101 et seq.
The Worker Adjustment and Retraining Notification Act of 1988 (“WARN”) requires that all
employers provide written notice to its employees or their representatives, a minimum of
sixty calendar days before any closing or massive lay-off. The notice must also be given to
the state dislocated worker unit and the mayor of the town where the plant is located. This
Federal law applies to Puerto Rico. There are no requirements under Puerto Rico laws with
respect to advance notification.
Employers required to provide such notice are those with 100 or more full time employees or
with 100 or more employees (full time or part time) who in the aggregate work at least 4,000
hours per week. WARN will not apply to an employer who does not meet the minimum
threshold previously established.
Although the sixty day notice period is mandatory, Congress recognized three situations
under WARN in which an employer can give less than sixty-days advance notice:
Exceptions
Natural Disaster
Faltering Company
(1) Applies to:
(a) Plant closings
(b) Mass layoffs
(2) Makes it lawful to provide less than sixty days notice if
a plant closing or mass layoff is due to a natural disaster,
such as flood, earthquake or drought.
(1) Applies to:
a. Plant closing
(2) Makes it lawful to provide less than sixty days notice
where, among other things:
(a) The employer was seeking additional capital or
business which the employer lacked at the time 60 days
notice of the closing would have been required.
(b) The capital or business, if obtained, would have
enabled the employer to avoid or postpone shutdown.
(c) The employer reasonably and in good faith believed
that giving notice would have prevented the employer from
obtaining the needed capital or business.
(3) This exception can be invoked in the event that the
closing of the plant becomes imminent a month or two
following the mass layoff.
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Unforeseeable Business This exception applies only to closings and layoffs that are
caused by unforeseeable business circumstances.
Circumstances
Important Terms Regarding WARN
Plant Closing
Mass Layoff
Part-Time
Employee
“. . . the permanent or temporary shutdown of a single site of
employment, or one or more facilities or operating units within a
single site of employment, if the shutdown results in employment
loss at the single site of employment, during any 30-day period for
50 or more employees excluding any part-time employees.”
A reduction in force which:
(1) Is not the result of a plant closing; and
(2) Results in an employment loss at the single site of
employment
during any thirty-day period for:
(a) At least 500 (excluding part-time employees) at a
particular site; or
(b) At least thirty-three percent (33½) of an employment
site’s full-time employees provided that at least fifty (50)
employees (excluding part-time) are affected.
(1) An employee who is employed for an average of fewer than 20
hours per week or
(2) An employee who has been employed for fewer than six (6) of
the 12 months preceding the date on which notice is required. This
definition has been interpreted to include even those workers who
have been hired as regular, full-time employees within the period
previously specified.
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