On June 20, 2022, Governor Pedro Pierluisi signed into law Act No. 41-2022, instituting drastic changes to labor and employment laws in Puerto Rico and extending employment rights for employees in the private sector. In doing so, the governor rejected the Financial Oversight and Management Board for Puerto Rico’s position that the bill is inconsistent with the fiscal plan. The new law intends to restore certain rights that had been eliminated or reduced by the 2017 Labor Transformation and Flexibility Act (“2017 Labor Reform”) and, further, to create additional rights for part-timers and students. It is important to note that unless an employer qualifies as a microbusiness1 or as a small2 or medium-sized3 business, it has 30 days to comply with the Act.
As further addressed below, among the many changes incorporated are: amendments to the formula for calculating severance payment and the language of the “just causes” for termination under the Unjustified Dismissal Act, the hours of work required to accrue vacation and sick leave as well as the monthly accrual rates for these benefits, meal period provisions, and Christmas Bonus provisions. Given the above, it is important for employers to move quickly with their payroll experts to make the necessary changes to their systems to comply with the new law and seek out legal guidance to ensure their policies, manuals and procedures are in alignment with the Act’s many provisions.
The following is a summary of the key aspects of...
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