Wednesday, October 5, 2022

Act 41 Legal Challenge Warned

By on August 11, 2022

FOMB Seeks to Halt Labor Changes; Governor Refuses

As Puerto Rico Gov. Pedro Pierluisi held steadfast last week in refusing to stop the implementation of Act 41 of 2022, which repealed portions of Act 4 of 2017, the Labor Transformation and Flexibility Act (LTFA), to reestablish certain employee benefits and which went into effect on July 20, the island’s Financial Oversight and Management Board (FOMB) warned it could challenge the law in court if the governor did not act accordingly by last Thursday. At press time, the oversight board’s spokesperson Sylvette Santiago said that the fiscal panel received the administration’s response Thursday night and “is currently evaluating it,” but did not elaborate.

In a July 30 letter to Omar J. Marrero Díaz, executive director of the Fiscal Agency and Financial Advisory Authority, oversight board Chair David A. Skeel Jr. said that if Pierluisi was unwilling to “cooperate” and consent to an order suspending Act 41 no later than Aug. 4, the governor would leave the board “with a single option … namely an action to nullify Act 41.”

Skeel, who referred to a previous letter sent to him by Marrero, requested in the missive that the administration suspend Act 41 while “the parties further discuss the issues.”

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