Businesses with employees in Puerto Rico should be mindful that the employment laws of this U.S. territory with commonwealth status differ significantly from—and often go beyond—those of other U.S. jurisdictions. Some examples include the following:

  1. NOT an “at-will” jurisdiction
    1. Terminations must be for “just cause”
    2. The employer has the burden of proof
    3. First-offense terminations are not favored by the courts
  2. ALL proceedings in the local court system are in SPANISH.
  3. Plaintiffs in civil cases before local courts do NOT have a right to a jury – so the question of whether to remove matters to federal court is not that simple.
  4. Federal laws apply, but local statutes generally provide more rights and benefits to employees, some of which have no equivalent in ANY U.S. jurisdiction. Examples of local entitlements include:
    1. Daily overtime
    2. Christmas bonus
    3. Meal periods
    4. Weekly day of rest
    5. Paid vacation and sick leaves, as well as other statutory leaves
    6. Longer job-protected leaves
    7. Paid maternity and breastfeeding leaves
    8. Paid jury and witness leaves
    9. Paid military leave
    10. Constitutional right to privacy that operates against private entities (including employers)
  5. Fair employment statutes on the following provide greater anti-discrimination protections to employees than other U.S. jurisdictions:
    1. Sexual orientation and gender identity
    2. Social origin or condition
    3. Political affiliation or ideas
    4. Domestic violence – accommodation issues
    5. Marriage – accommodation issues
    6. Mandatory protocols to deal with domestic violence and sexual orientation/gender identity discrimination
  6. Although there is no right to punitive damages in local courts, local statutes provide for automatic doubling of damages awards in discrimination, retaliation and wage-and-hour cases.
  7. Many of the employment-related insurance programs are run exclusively by the local government:
    1. Workers’ compensation insurance (no private alternative)
    2. Non-occupational disability insurance (private insurance is permitted under certain circumstances)
    3. Chauffer’s social security (no private alternative)
    4. Unemployment compensation
  8. The use of alternative dispute mechanisms in employment claims is not prevalent or mandated by local court rules.
  9. Employers in the retail industry must follow Puerto Rico’s Closing Law as to hours of service and other issues and provide certain additional holidays.
  10. Employers MUST report every new hire to the Administration for Child Support Enforcement
    • steep penalties are assessed for non-compliance.

The employment implications of operating in Puerto Rico can be challenging, but proper planning can go a long way to mitigating the risks.