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

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:

• Probationary PeriodsVacation and Sick Leave
• Vacation Payout
• Annual (Christmas) Bonus
• Unjust Dismissal Law
• Meal Periods
• Day of Rest

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.