Fiscal board sends draft labor reform bill to Puerto Rico government

SAN JUAN – The Financial Oversight and Management Board for Puerto Rico on Tuesday sent the island government certifications of compliance for its own version of the commonwealth’s and several government entities’ fiscal plans. It also sent a draft labor reform bill.

In letters to Gov. Ricardo Rosselló and the leaders of the Senate and the House of Representatives, the board confirmed certification of the plans for the commonwealth; the Puerto Rico Electric Power Authority (Prepa); the Puerto Rico Aqueduct and Sewer Authority (Prasa); the Highways and Transportation Authority (HTA); the Government Development Bank (GDB), which is the only plan the board did not make changes to; and the University of Puerto Rico (UPR).

In a first, the board included draft legislation for a labor reform that “is consistent with the requirements of Section 7.4 of the New Commonwealth Fiscal Plan,” it said in a release Wednesday.

The congressionally established board proposes the elimination of the statutory Christmas Bonus, cutting sick leave and vacation days by half, the repeal of the Unjustified Dismissal Act, and raising the minimum wage by 25 cents for workers over 25 years old, among others.

Labor Reform Draft Bill 2018:

 

Rosselló, Senate President Rivera Schatz and House Speaker Johnny Méndez maintain that they will not implement the board-recommended changes or cut pensions by an average 10%, a measure included in the board-certified version of the commonwealth’s fiscal plan.

“We regret that the Financial Oversight and Management Board continues to use resources that our taxpayers end up paying to implement measures for which they have no legal authority or moral justification,” the Puerto Rico secretary of Public Affairs and Public Policy, Ramón Rosario, said in a statement Wednesday afternoon.

“As the governor made public—along with the leadership of all political parties—that measure has no possibility in the Legislative Assembly,” Rosario said. “The invitation of the governor is to work on the measures in which there is consensus. We hope that the Board will respond to that call to dialogue for the benefit of Puerto Rico.”

In the board’s release early Wednesday, Chairman José Carrión says: “The Oversight Board looks forward to working with the Government of Puerto Rico and all covered instrumentalities to fully implement the certified Fiscal Plans for the benefit of the people, businesses, and other stakeholders of Puerto Rico.”

However, after last week’s board meeting where the plans were certified publicly, Carrión said: “We are ready to go to court, it’s not what we want, but we are ready,” adding, “We ask the governor to reconsider his position and respect the federal law.”

The board chairman explained that he doee not “want anyone to be imprisoned,” but that his panel is “going to defend the plan and we’re going to do it until the last consequences. What tools do we have? Well, the budget [of the government of Puerto Rico]. The ones who determine the country’s budget are the board.”

He further warned that “the fiscal plan has economic projections as a result of many reforms, among them the labor reform. If these reforms do not materialize, we will have to take that money out of the budget,” referring to an available mechanism for the board amid the governor’s refusal to execute the fiscal plan.

Letter – Compliance Certification – Commonwealth, PREPA and PRASA Fiscal Plans – 24 Apr 2018:

 

Letter – Compliance Certification – UPR HTA and GDB Fiscal Plans – 24 Apr 2018:

 

New Puerto Rico fiscal plan:

Fiscal board establishes plans for Puerto Rico and its power and water utilities

Puerto Rico governor reveals details on proposed tax reform, new incentive code

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