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Law 80 in Puerto Rico provides guidelines on wrongful termination and stipulates severance payments under certain conditions. It ensures that employees are fairly compensated and outlines the rights of both employers and employees. Understanding Law 80 is vital for businesses in Puerto Rico as they prepare their Puerto Rico Employee Time Reports (Nonexempt), ensuring they adhere to local labor laws and protect their interests.
Companies looking to hire workers from Puerto Rico must comply with Public Law 87. It requires employers who are recruiting on the island to obtain authorization by the Secretary of Labor and Human Resources of Puerto Rico, according to Odemaris Chacon, a labor attorney with Estrella, based in Puerto Rico.
As in the United States, the National Labor Relations Act (NLRA) applies in Puerto Rico to covered employers engaged in interstate commerce.
Restrictive covenantsNon-compete clauses in employment contracts are valid and enforceable in Puerto Rico under general freedom of contract principles but must comply with requirements established by the Supreme Court of Puerto Rico.
Section 403 of PROMESA modified section 6(g) of the Fair Labor Standards Act (FLSA) to allow employers to pay employees in Puerto Rico who are under the age of 25 years a subminimum wage of not less than $4.25 per hour for the first 90 consecutive calendar days after initial employment by their employer.
Domestic workers, government employees, and white-collar executive, professional, or administrative workers are all completely exempt from overtime pay under Puerto Rico law.
Puerto Rico has enacted the Minimum Wage Act, Act No. 47-2021, increasing the Island's minimum wage from $7.25 to $8.50 effective January 1, 2022.
Wage and hour coverage in Puerto Rico for non-exempt employees is governed by the US Fair Labor Standards Act (FLSA) as well as local laws.
The minimum wage under the Fair Labor Standards Act (FLSA) is generally applicable to any state, territory, or possession of the United States such as Puerto Rico, the Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands (CNMI).
Employment law in Puerto Rico is covered both by U.S. labor law and Puerto Rico's Constitution, which affirms the right of employees to choose their occupation, to have a reasonable minimum salary, a regular workday not exceeding eight hours, and to receive overtime compensation for work beyond eight hours.