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First phase of amended Labor Reform goes into effect


Labor & Human Resources Secretary Gabriel Maldonado González, at left

By The Star Staff


Despite the opposition of the Financial Oversight and Management Board, Gov. Pedro Pierluisi Urrutia and Labor & Human Resources Secretary Gabriel Maldonado González said Labor Reform, as approved in Act 41-2022, went into force Wednesday for all employers in Puerto Rico that are not micro, small or midsize businesses.


“Facing the entry into force of Act 41, better known as the amendments to the Labor Reform, at the Labor Department we have been very active in guiding agency employees, employers, workers and the general public regarding the changes to several laws that deal with issues such as unjustified dismissals, the accumulation of vacation and sick leave, the annual bonus, the work day and other issues that deal with employee-employer relations in our jurisdiction,” Maldonado Gonzalez said in a written statement. “The call we make to employers, workers, labor lawyers and union groups is that they get their bearings. We are available to help and guide them to guarantee compliance with the Law.”


“Currently, Act 41 and the amendments introduced by it to the Labor Reform are in force,” he added. “Once the law was signed, the government submitted to the [oversight] Board the certification required by PROMESA [the Puerto Rico Oversight, Management and Economic Stability Act] within the term provided for it and, in addition, will be attending to the additional information requested by the Board. … Currently, the most important thing is to guide citizens around the changes and the fact that the law is in force for many employers as of today.”


For microenterprises, and small and midsize businesses -- only those that meet the definitions under Law 62-2014, Act 41-2022 -- will enter into force on Sept. 18.


Maldonado González clarified that a letter issued by the oversight board requesting that the government immediately suspend the application and compliance with Act 41-2022 does not constitute a legal mandate or immediate action. The board will have to sue in federal court to paralyze or annul the law.


On June 20, Pierluisi signed into law Act 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 oversight board’s position that the bill was 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 and, further, to create additional rights for part-timers and students.


Under Act 41, the number of hours non-exempt employees must work in order to accrue sick and vacation leave has again been lowered to 115 hours per month. The Act lessens the number of hours employees must work in order to be eligible to receive Christmas bonuses to 700. It reintroduces a rebuttable presumption that all terminations lack just cause and that any employment action lacking just cause is a result of illegal discrimination, and amends the formula for statutory severance payments. The new law reduces the probationary period for both exempt and nonexempt employees to three months and increases the statute of limitations for wrongful termination claims, wage claims, accrued vacation and sick leave claims, and claims arising out of employment agreements from one year to three years.


The new law provides that nonexempt employees must take their meal periods between the end of the third and beginning of the sixth hour of work unless the employer and employee agree otherwise in writing. Employers must now provide employees who work more than 10 hours in a single day with a second meal period.

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