Puerto Rico Employment Law 101

Puerto Rico has been a commonwealth of the U.S. since 1952, and the 3.2 million citizens of Puerto Rico also have automatic U.S. citizenship.

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.

However, in 2021 Puerto Rico passed a new minimum law.

Like many states with minimum wage laws, the legislation calls for rates to increase gradually:

• $8.50 – Jan. 1, 2022
• $9.50 – July 1, 2023
• $10.50 – July 1, 2024, unless a review board determines it to not go into effect

Currently, the U.S. federal minimum wage is $7.25 per hour.

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.

Employees’ mandatory Christmas bonus is 3 percent of their salary, capped at $600 for employees who work more than 1,350 hours that year. Also, if an employer has 15 workers or less, they only have to pay a maximum of $300 per employee.

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 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 postings, employers in Puerto Rico are required to display a variety of workplace postings to remain compliant with Puerto Rico employment law.

Required Federal Postings

• Equal Employment Opportunity Is the Law
• Federal Minimum Wage Notice
• Employee Polygraph Protection Notice
• Family and Medical Leave Act (FMLA)
• Uniformed Services Employment and Reemployment Rights Act (USERRA)

Required Puerto Rico Commonwealth Postings

• El Discremen es Ilegal (discrimination is illegal)
• Negociado De Normas de Trabajo (Bureau of Labor Standards laws)
• Lay para prohibir y prevenir al Acoso Laboral (anti-workplace harassment)
• Carta de Derechos de la Mujer Trabajadora Secor Privado (women’s rights)
• Sobre Las Restricciones en el Uso Del Numero de Seguro Social (use of Social Security number)
• Seguridad y Salud en el Trabajo (security and health at work)
• Sinot Seguro por Incapacidad No Occupactional Temporal (disability insurance)

This Employment Law News blog is intended for market awareness only, it is not to be used for legal advice or counsel.