Puerto Rico Labor Law Requirements 101

Puerto Rico has been a commonwealth of the United States since 1952, and the 3.7 million citizens of Puerto Rico also have automatic U.S. citizenship. The World Bank Group ranks Puerto Rico #40 on its list of countries rated for ease of doing business.

Employment law in Puerto Rico is covered both by U.S. labor law and Puerto Rico’s Constitution, which affirms the right of employees to choose their occupation, to have a reasonable minimum salary, a regular workday not exceeding eight hours, and to receive overtime compensation for work beyond eight hours.

The Puerto Rico Department of Labor and Human Resources is responsible for overseeing the legislation affecting workers and employment programs in Puerto Rico.

Puerto Rico Minimum Wage

The Minimum Wage, Vacation, and Sick Leave Act of Puerto Rico (Minimum Wage Act) was enacted in 1998. The Minimum Wage Act establishes that the federal minimum wage fixed by the Fair Labor Standards Act (FLSA) applies automatically to non-exempt employees in Puerto Rico who are covered by the FLSA. Currently, the U.S. federal minimum wage for non-exempt employees is set at $7.25 per hour. Employers not covered by the FLSA must pay a minimum wage to non-exempt employees of at least 70% of the applicable federal minimum wage.

Puerto Rico Overtime

Employees covered by the FLSA are entitled to overtime pay at a rate of 150 percent of their regular wage (commonly known as “time and a half”). If employees are not covered by the FLSA, they are entitled to a rate of two times their regular compensation rate for every hour worked beyond forty within a week.

Puerto Rico Christmas Bonus – ¡Feliz Navidad!

Known as el Bono de Navidad in Spanish, the Christmas Bonus is a mandatory annual payment to employees based on their earned wages for the year; however, Puerto Rico’s credit rating was recently lowered to “junk” status, and legislators are considering a reduction in the Puerto Rico Christmas Bonus as one measure to spur the economy.

For now, the Christmas Bonus rates are based on company size.

  • 15 or fewer employees: Bonus of 3 percent of employee’s earned wages
  • 16 or more employees: Bonus of 6 percent of employee’s earned wages

The bonus must be paid between December 1 and December 15 of each year.

No At-Will Employment in Puerto Rico

What do Puerto Rico and Montana have in common besides having Spanish names? Employees in Puerto Rico and Montana are not at-will employees, meaning that employees in Puerto Rico (and Montana) cannot be fired anytime, for any reason.

Employers in Puerto Rico (and Montana) should anticipate more difficulty than in other locations in the U.S. as Puerto Rico law favors employees.

Employers must demonstrate just cause for employee termination or risk paying a premium (una mesada) to the discharged employee that can be a severance package on steroids – including two months’ salary (minimum) plus progressive compensation depending on length of service.

How can employees in Puerto Rico be fired? Example of just cause for termination include:

  1. Documented pattern of improper or disorderly conduct.
  2. Measurable work performance issues (efficiency, quality, etc.).
  3. Violations of reasonable written rules.
  4. Closing of business operations.

Puerto Rico Labor Law Posting Requirements

In addition to required Federal labor law posters, employers in Puerto Rico are required to display a variety of work place postings to remain compliant with Puerto Rico labor law.

Required Federal Postings

  • Equal Employment Opportunity Is the Law
  • Federal Minimum Wage Notice
  • Employee Polygraph Protection Notice
  • Family and Medical Leave Act (FMLA)
  • Job Safety and Health “It’s the Law!” (OSHA)
  • Uniformed Services Employment and Reemployment Rights Act (USERRA)

Required Puerto Rico Commonwealth Postings

  • Working hours (29 L.P.R.A. § 283): Employers must display a printed notice of the:
  • Number of working hours required daily from employees for each day of the week.
  • Time to begin and end work.
  • Time to begin and end the period for taking food within the regular working hours.
  • Ley de Seguridad y Salud (Safety and Health Act)
  • SINOT Sistema de Compensasion por Accidentes del Trabajo (Workers’ Compensation)
  • Antidiscrimen “Discrimination Is Illegal”
  • Negociado De Normas de Trabajo

 Another Bonus: The National Anthem of Puerto Rico

Enjoy the Puerto Rico national anthem, La Borinqueña

Big Changes to Oklahoma Worker’s Compensation Process and Posting

In 2013, the Oklahoma Supreme Court upheld the constitutionality of a new Oklahoma workers’ compensation law that phased out the Oklahoma Workers’ Compensation Court, replacing it with an administrative system, the Oklahoma Workers Compensation Commission (OWCC), effective February 2014. The OWCC will handle workers’ compensation claims made by injured workers instead of the Workers’ Compensation Court.

The new law also authorizes employers to opt out of the state’s workers’ compensation insurance provider as long as they provide equivalent coverage for injured workers.

Workers’ compensation is an insurance program that provides compensation for disability, and medical and rehabilitation benefits, for employees injured on the job. Oklahoma state law requires employers to provide workers’ compensation insurance for their employees, even if the employer only has one part-time employee. Employers with employees in Oklahoma must provide workers’ compensation coverage except where:

  • Domestic or household employees where total payroll is less than $10,000 annually.
  • Agricultural or horticultural employees where total payroll is less than $100,000 annually.
  • Certain licensed real estate sales persons and brokers.
  • Employees covered under Federal laws.

Significant Changes to the Oklahoma Workers’ Compensation Notice

Employers must post the Oklahoma Workers’ Compensation Notice posting (CC-Form-1A) that advises employees they are covered by the Workers’ Compensation Act (WCA) and that workers’ compensation counselor services are available at the OWCC. The notice must be posted and maintained by the employer in one or more conspicuous places on the work premises. The State also provides the form in Spanish.

As of February 1, 2014, the new CC-Form-1A supersedes Form 1A, which directed affected employees to follow the Oklahoma Workers’ Compensation Court procedures instead of new OWCC procedures.

Other significant changes include:

  • Accidental injury or death claim and cumulative trauma claim filing deadlines were reduced to one year of the date of injury or death. The State previously allowed two years. PLEASE NOTE: When first released, the posting stated a two-year limit. Below is the language directly from the current posting as of September 11, 2014 for clarification:
  • “Diagnostic” was removed from the list of covered services provided by employers under the WCA.
  • Other covered services were detailed to include:
  • First aid
  • Medical
  • Surgical
  • Hospital
  • Optometric
  • Podiatric
  • Nursing
  • Medicine
  • Crutches and other apparatus

All Oklahoma Required Postings Available in One Format

The revised Oklahoma Workers’ Compensation Notice is included on the GovDocs Oklahoma State-on-One poster, which includes postings required for employers in Oklahoma:

  • Workers’ Compensation Notice
  • Your Rights – Minimum Wage Act (Statutory Language Poster)
  • Your Rights – Minimum Wage Act (Plain Language Poster)
  • Oklahoma Law Prohibits Discrimination in Employment
  • Child Labor Law
  • State Public Occupational Safety & Health
  • Unemployment Insurance
  • No Smoking

Stay informed of labor law news in the U.S.

Most Common Worker’s Compensation Violations

Each U.S. state (and the federal government) has a Worker’s Compensation program that provides compensation to employees who suffer job-related injuries and illnesses. While the federal government administers a workers’ comp program for federal and certain other types of employees, each state has its own worker’s compensation laws and enforcement of workers’ compensation programs. For example, the Workers Compensation program in Texas is enforced by the state Department of Insurance. Their 2013 enforcement actions provide insight into typical violations of state Worker’s Compensation laws.

Record-keeping and Reporting Violations Lead Offenses

  • More than one-third of all violations related to record-keeping and reporting – including employers, insurance carriers, and physicians and medical services.
  • Payment delays or discrepancies were the second leading category of violations.
  • Most common examples of employer violations included failure to:
    • File and/or accurately complete forms, reports or records
    • File wage statement with injured employees
    • Pay income or indemnity benefits to injured employees in a timely manner
    • Pay correct amount of income benefits to injured workers
    • Provide Agency with requested information about workers’ compensation

Fines for Worker’s Comp Violations

Covering a range of violations for employers, physicians /medical services, and insurance companies, fines for a worker’s compensation violation averaged $7,400. Employers’ fines averaged only $3,000 per offense; however, in 43% of the violations, insurance carriers were found at fault. Fines leveled at insurance companies averaged more than $12,000 per violation.

Payment violations lead all categories for total fine amount. Insurance carriers are liable for these fines for cases where they have failed to pay income benefits or medical bill reimbursement to injured employees in a timely manner.

Learn More: Posting Requirements

Are you an employer wondering what you need to display in the workplace to stay compliant with Worker’s Compensation posting requirements?

Every state requires Worker’s Compensation and Unemployment Insurance postings, but not all states have the same posting requirements. You can learn which Workers Comp postings and Unemployment Insurance postings are required for your state here.