Puerto Rico Governor Pedro Pierluisi has signed into law changes reversing portions of the 2017 employment reform law. House Bill 1244 (HB 1244) rolls back and changes the statutory probationary period, vacation and sick leave accrual, and eligibility for the annual Christmas Bonus, among other requirements. The changes go into effect for most employers on July 20, 2022. For certain “small” and “mid-size” businesses as defined in the new law, changes will be effective on September 18, 2022.
A prior version of the bill, which included more major rollbacks, was vetoed by the governor in March 2022. Nevertheless, even under HB 1244, employers need to revise their policies and practices to comply with the substantial changes to Law 4-2017, commonly known as the Employment Law Reform.
Further, employers should keep an eye on the Financial Oversight and Management Board for Puerto Rico (the entity created by Congress to supervise the finances of the Government of Puerto Rico). The Oversight Board has communicated to the governor and the legislature its opposition to HB 1244. Under federal law, the Oversight Board has statutory authority to enjoin enactment and implementation of Puerto Rico local laws.
HB 1244 reduces the probationary period to 90 days, with the option to extend for an additional 90 days upon written notice to the Puerto Rico secretary of labor. If requested, the extension is automatic; the secretary of labor would have no statutory authority...
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