Financial Oversight and Management Board Recommend Sigificant Changes to Puerto Rico Laws

February 6, 2018

In its February 5, 2018 letter to Governor Ricardo Rosselló the Financial Oversight and Management Board (FOMB) submitted to the government its recommendations regarding the reforms which should be implemented by the Government in order, according to the FOMB for Puerto Rico, to become a more attractive venue for business and economic growth. The Board's proposals for reform in the labor area would result in significant changes to the Labor Transformation and Flexibility Act signed into law on January 26, 2017 as well as to other standing local labor legislation.

These recommendations for reform as proposed by the FOMB in its letter are as follows:

  • Becoming an at-will employment jurisdiction, similar to 49 of 50 mainland states, in order to reduce the cost and risk of hiring new employees;
  • Make employer provision of severance pay and a Christmas bonus optional, as under the Federal Fair Labor Standards Act. To the Board's knowledge, no mainland state requires either severance pay or the payment of a Christmas bonus;
  • Reducing requirements for vacation and sick leave to mainland levels. Current requirements for paid leave causes employers to reduce wages and hire fewer employees. No state requires that employers provide vacation pay. Only nine of the 50 mainland states require any paid sick leave, and none of the nine who do mandate paid sick leave require as much leave as does Puerto Rico.

It is evident that these modifications should they materialize undoubtedly would provide a drastic change to the present labor legislation landscape in Puerto Rico.

As always we will keep you informed of any forthcoming changes regarding this important development.

Goldman Antonetti & Córdova, LLC stands ready to assist you and your business to adjust to changes in the law. If you need further assistance in this area, please feel free to contact the following members of our firm:

Luis Antonetti, Esq.
787.759.4111
[email protected]

Vicente Antonetti, Esq.
787-759-4112
[email protected]

Angel Berberena, Esq.
787.759.4143
[email protected]

José Fas, Esq.
787.759.4156
[email protected]

Amelia Fortuño, Esq.
787.759.4231
[email protected]

Romel Meléndez, Esq.
787.759.4115
[email protected]

Luis Ortiz Abreu, Esq.
787.759.4110
[email protected]

Howard Pravda, Esq.
787.759.4101
[email protected]

Gabriel Quintero, Esq.
787.759.4130
[email protected]

Francisco Ramírez, Esq.
787.759.4132
[email protected]

Jorge Rodriguez Micheo, Esq.
787.759.4102
[email protected]

Javier Vazquez, Esq.
787.759.4113
[email protected]

Disclaimer:

Although the information included in this document may concern legal issues, it is not a legal opinion or professional advice and clients shall not use it as such. We assume no responsibility or liability of any kind for any information contained herein, and we expressly disclaim all liability for any claim for damages arising from the use, reference to, or reliance on, such information. If legal or other expert assistance is required, the services of a competent professional should be sought.

Goldman Antonetti & Córdova, LLC | 787-759-8000 | www.gaclaw.com