Puerto Rico governor announces private-sector job measures
SAN JUAN – In a message broadcast live, Gov. Ricardo Rosselló announced what he called new measures to foster employment in Puerto Rico and address the mass outmigration of residents in search of job opportunities stateside, in what appears to be another labor reform.
“We want to transition from a labor force that represents the 40% to a labor force that has an at least 60% participation. It is an aggressive objective, it has never been achieved in Puerto Rico, but if we want to be competitive we have to aspire to those levels,” said the governor, who was accompanied by Senate President Thomas Rivera Schatz, House Speaker Carlos Méndez, cabinet officials and private sector representatives.
Among the proposed changes are reducing vacation and sick leave to seven days each, “allowing the private sector to negotiate,” the governor said, “and work with the talent that is attracting a different amount. This is what happens in other jurisdictions. Leaving it that way, Puerto Rico is still the jurisdiction where, under statute, the greatest number of days due to illness and vacation are paid.”
In addition, the so-called Christmas bonus, which is part of employee salaries, would be an optional benefit subject to the criteria of each company. Rosselló said the government would provide an earned-income tax credit (EITC) of $300 to $2,000.
During his message, the governor also indicated that he would take action to repeal the Unjustified Dismissal Act (Act 80) within three years. In addition, he indicated he was seeking to increase the minimum wage from $7.25 to $7.75 in 2019 until eventually reaching $8.25.
“We are making a transition to eliminate the obstacles of Act 80 in order to make Puerto Rico a more competitive jurisdiction,” Rosselló added. “There are 49 states that don’t have any measure similar to this one…. We have proposed what is called a sunset clause so that in a period of three years the conditions of this law expire.”
The labor reform approved at the beginning of last year established that employees would accrue 12 days of sick leave a year. As for vacation leave, the reform established that employees would accrue half a day a month during the first year; three-fourths of a day between the second and fifth year worked; and one day a month after the fifth year until working 15 years, after which they would accrue 1¼ day a month.
Labor reform also relaxed the definition of justified dismissal contained in Act 80 and added grounds whereby employers could terminate employment. At 80, which would be repealed, provides for an employee who has been dismissed without just cause to be entitled to receive three months’ salary as compensation, subject to having completed the probationary period; or to receive an amount equal to two weeks of salary for each full year of service in the company.