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August 2022: Puerto Rico Governor Signs New Employment Law Reform Bill into Law 

01 Aug


Update Applicable to: 
All employers with businesses in Puerto Rico.

What happened?
On June 20, 2022, Puerto Rico’s Governor signed into law House Bill 1244 (HB 1244) into law, which amends and partially repeals the Labor Transformation and Flexibilization Act, Act No. 4-2017 (Act No. 4 or Labor Reform of 2017), as well as amends several other employment statutes.

What are the details? 
Unless an employer is a small or medium-sized business, the employer must comply with HB 1244 by July 20, 2022.

Micro, small, and medium-sized businesses must comply by September 18, 2022. The definitions of these terms for the law follow:

  • A medium-sized business generates a gross income of less than $10 million annually and has 50 employees or fewer.
  • A small-sized business generates a gross income of less than $3 million each year and has 25 or fewer employees.
  • A micro-sized business generates a gross income of less than $500,000 yearly and has seven or fewer employees.

Here is a summary of several of the changes:

For more information, please see the links below:

House Bill 1244 (HB 1244)

Article 1 – Article 2 – Article 3

What do employers need to do?

Employers should review the links above, review their policies and practices, and train their supervisors on the new requirements to ensure they comply with the law.

Need help understanding how changes to employment laws will affect your business?

Learn more about how Vensure's Puerto Rico PEO services can help you navigate complex employment laws and keep your business compliant.

This communication is intended solely for the purpose of conveying information. The present post might incorporate hyperlinks directing readers to websites managed by third-party entities. The inclusion of any links within this communication is meant to serve as points of reference and could encompass opinion articles from various law firms, articles from HR associations, official websites, news releases, and documents of government agencies, and other relevant third-party sources. Vensure has no authority over these external websites and bears no responsibility for their content. Furthermore, Vensure does not endorse the materials present on these websites. The contents of this communication should not be interpreted as legal advice or as a legal standpoint concerning specific facts or scenarios. Nor should it be deemed an exhaustive compilation of facts potentially pertinent to federal, state, or local laws. It is strongly advised that employers solicit legal guidance from an employment attorney when undertaking actions in response to any legal updates provided. This is due to the possibility of future alterations occurring in federal, state, and local laws, regulations, as well as the directives and guidelines issued by governing agencies. These changes may transpire at any given time, potentially rendering certain portions of the content within this update void or inaccurate.

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