Private sector leaders urge governor to veto new labor reform
By The Star Staff
Private sector leaders urged Gov. Pedro Pierluisi Urrutia on Wednesday to veto the proposed new labor reform law that would ease labor laws by repealing a prior labor reform.
“During the past few months, we have been making a claim before the Puerto Rico Legislature to stop the legislative process on House Bill (HB) 3, which sought to amend the so-called Labor Reform, until a holistic and responsible analysis was carried out, and economic impact studies,” Mateo Cidre, president of the Puerto Rico Restaurants Association, said in a statement.
The presidents of nine associations, including the United Retailers Center, the island Chamber of Commerce, the Chamber of Food Marketing, Industry & Distribution (MIDA by its Spanish acronym) and Made in Puerto Rico along with those representing restaurants, retail trade, hotels & tourism, farmers and community pharmacies, presented serious concerns about the difficult situation in which Puerto Rico finds itself. In addition, they indicated that the proposed reform law, which would enter into force immediately, without a transition period for most employers, would have a negative impact on fragile industries such as pharmaceuticals, hospitals, tourism and restaurants.
The bill would ease labor laws as they were before the labor reform approved by the past administration. Once the bill becomes law, the caps on discrimination claims are to be eliminated, vacation time is to be increased to 1.25 days per month for full-time employees, and a new benefit of half a day per month in accrued vacation time and one day for sickness leave is to be created for part-time employees.
The bill also reduces the number of hours to qualify for a Christmas bonus to 700 hours and, for small-to-midsize enterprises, to 900 hours; the prescriptive period is increased to three years. The presumption that a dismissal is unfair is reversed in favor of the employee while the probationary period for new workers is reduced to three months with the possibility of extending an additional three months with prior notification.
The legislation also notes that overtime in excess of 10 hours will be paid double time in flexitime agreements and without flexitime agreement at time and a half, among other benefits.
“Our only interest is that any bill that is approved, that tries to modify structural issues such as labor, that changes the rules of the game for the employer and that represents more increases in the costs of doing business, be analyzed responsibly and not hastily,” MIDA Executive Director Manuel Reyes Alfonso said.
Cost increases for companies result in higher inflation for citizens and fewer jobs, the head of MIDA noted. In addition, he said, it must be emphasized that in Puerto Rico there is no problem of lack of labor legislation since, even after the 2017 reform, the U.S. territory has more legislated benefits than any state.
“To this we must add that a month ago we had a minimum wage increase that is higher than that of 20 states that have a per capita income that triples ours and their governments are not bankrupt,” Reyes Alfonso said. “Our real problem is the lack of economic growth and that is where the Legislature needs to focus. It is important that at this time we do not add to the inflation problem or put businesses on the island at risk. We need to stabilize the economy and provide certainty to companies so that they can continue investing in the island.”
The businessmen establish in their letter to the governor that the approved bill did not take into consideration the difficult economic situation of the island, aggravated by the natural disasters of recent years and the public health emergency caused by COVID-19. All those factors have added to the current shortage of labor and has prompted employers to increase the salary offer, add bonuses, incentives and fringe benefits in order to recruit personnel to ensure service is not negatively affected.
“The proposed amendments to Act 4-2017 have a considerable impact on Puerto Rican employers, from micro-enterprises to large companies. Any proposed legislation must be processed responsibly and be supported by an empirical foundation, which we know does not exist for this bill that has just been approved,” said Ivis González, an official from Farmacias de la Comunidad (Neighborhood Pharmacies Association). “In addition, we are greatly concerned that [lawmakers] continue to pass isolated measures that, beyond promoting investment and economic development, perpetuate the economic crisis we are experiencing.”
According to the most recent “Employment and Unemployment in Puerto Rico” report, published by the Department of Labor and Human Resources, the private sector represents over 80% of all employed persons on the island. According to business sector leaders, measures like HB 3 threaten the stability and permanence of those jobs and support their request to the governor to veto the approved measure.