• Attorneys & Counselors

PR Senate Bill 919

Updated: Feb 3

To create “The Labor Reform Act of 2018”

After the Financial Oversight and Management Board for Puerto Rico filed before the Puerto Rico Legislature a written version of the bill, on April 26, 2018, senator Thomas Rivera Schatz introduced S.B. 919 in order to establish "The Labor Reform Act of 2018”. On that same day, the proposed bill was sent to the Federal Relations, Politics and Economics Commission of the Senate.

Article 2.1 of this bill intends to amend Article 2 of Act 180-1998 to include that, effective January first of the year following the repeal of Act No. 148 of June 30, 1969, as amended, all employers covered by said law must pay any employee of 25 years of age or more a minimum wage of no less than $7.50 per hour, unless the applicable federal minimum wage is higher or the employee is totally or partially exempt from the federal minimum wage provisions. Also, this Article provides for an increase of the minimum wage to $7.75 when the labor participation rate in Puerto Rico exceeds 45%; an increase to $8.00 when the labor participation rate in Puerto Rico exceeds 50%; and an increase to $8.25 when the labor participation rate in Puerto Rico exceeds 55%. These proposed increases will not apply to the small and medium-sized employers known as PyMEs.

If approved by the Puerto Rico Legislature, S.B. 919 will repeal: (1) Act No. 148 of June 30, 1969, as amended, effective September 30, 2018 (Notwithstanding, the rights, obligations and limitations provided by said law shall apply to the Christmas Bonus for year 2018); (2) any mandatory decree approved before the effective date of the Bill; (3) Article 5 of Act No. 180-1998; and (4) Act No. 80 of May 30, 1976, as amended, effective January 1, 2019. (Notwithstanding, the rights, obligations and limitations provided by said law continue to apply for dismissals occurring before the effective date of its repeal).

The repeal of Act No. 80 of May 30, 1976, as amended, will not affect any rights to which the employee was entitled before the approval of this law to obtain a relief for damages from tortuous actions by the employer unrelated to the mere termination of employment or the employment contract; to any additional relief provided by special laws and those granted for a dismissal with the main purpose and intent to violate clear public policy by the State or any applicable constitutional right of the employee. By repealing Act No. 80, a new legal standard will be established in Puerto Rico allowing the employee or the employer to terminate at will any employment contract of indefinite duration, without incurring in civil liability.

Article 4.3 of the proposed bill decreases the vacation leave and sick leave of employees that work a minimum of 130 hours per month to 7 days per year for each benefit. Article 6.1 proposes to amend Article 2 of Act No. 115-1991, as amended, to extend the protection of the law to employees that offer or attempt to offer testimony, statements or information, through internal proceedings established by the company, or before any employee or representative in a position of authority, alleging that the employer violated any employment law. Also, the bill will reduce the statute of limitations for the employee to file a civil action against the employer that violates Act No. 115-1991 from 3 years to 1 year from the date in which the violation occurred. The last proposed amendment to Article 5 of Act No. 115-1991 is in order to establish that the employer’s liability, in connection with the violations of said law, will be determined on the basis of the provisions of Articles 6.1 and 6.2 of Act No. 4-2017.

Article 6.1 of Act No. 4-2017 limits the amount of recoverable damages for mental anguish or suffering, other compensatory damages, and punitive damages, that an employee can received based on the number of employees of the employer and Article 6.2 establishes that when applying the provisions of any discrimination or retaliation in the workplace law, the provisions of federal legislation and regulations as well as the judicial interpretations thereof of courts with jurisdiction in Puerto Rico shall be recognized, in order to ensure consistency in interpretations regarding similar terms or provisions, unless the provisions of the local legislation require a different interpretation.

If you have any questions about Senate Bill 919 or the impact it may cause, feel free to contact us at your convenience at (787) 765-5656.