Friday, December 6, 2019

Puerto Rican public workers to get this year’s ‘Christmas bonus’

By on November 5, 2019

The fiscal board’s chairman, José Carrión, and executive director Natalie Jaresko (Juan J. Rodríguez / CB)

Government, fiscal board negotiate and find required $60 million

SAN JUAN — Puerto Rico Gov. Wanda Vázquez Garced announced Tuesday that government workers will be receiving their so-called Christmas bonus after her administration identified the funds and reached an agreement with the federally established Financial Oversight & Management Board for Puerto Rico.

The Puerto Rico Christmas Bonus Act of 1969, as amended, requires employers to pay an annual bonus before the year-end holidays to employees who worked 700 hours or more during the 12 months between Oct. 1 of the preceding year and Sept. 30 of the current year.

In a statement issued by her office, La Fortaleza, Vázquez said that after speaking with board Executive Director Natalie Jaresko, it was agreed that the year-end portion of workers’ salaries—which is the first target when government spending cuts are sought—would be paid.

“Nevertheless, we recognize that the government will continue to work toward its saving’s goals for the next fiscal year,” Vázquez said about identifying the use of the funds needed to pay the bonus checks, which are estimated to total about $60 million. 

“We communicated with Jaresko and managed to finalize the details of the Christmas bonus, so that all public workers receive that compensation that they expect and that is necessary,” the governor added. “We know that public employees depend on that money to be able to buy their gifts and enjoy the holiday season. From the beginning, I said that I would fight to be able to make the adjustments necessary and identify the funds to be able to fulfill that commitment to our people.” 

Chairman José Carrión said that after working with the governor and her staff, the board identified the source of funds to pay this year’s bonus.

“The payment this year is not a permanent solution,” Carrión said in a statement. “We still have much to do. The government needs to meet its savings objectives next year and, as we move forward, identify recurring sources of funds within the personnel budget for this compensation to continue to align with the Certified Fiscal Plan.”

However, in a seeming change in position from when former Gov. Ricardo Rosselló was in office, Carrión said: Although this benefit is called a ‘bonus,’ it is not a gift. After significant review of compensation competitiveness, it is clear that this is part of the routine compensation package provided to public employees.

The governor and the board have recently negotiated the administration’s stance with regard to the restructuring support agreement for the Puerto Rico Electric Power Authority’s $9 billion debt, as well as the percentage of pensions the board wants cut to meet its goals. 

Despite reiterating that the government was opposed to cutting pensions, Vázquez and her chief financial adviser, Omar Marrero, endorsed a plan proposed by the board Sept. 27 to adjust central government debt. It includes an 8.5% cut to the pensions of retirees earning more than $1,200 a month, or 40% of retirees.

In a televised message that day, Vázquez said the decision came down to the following: “We respect the agreement reached by the Retiree Committee with the Financial Oversight and Management Board,” otherwise, “we risk facing greater cuts of up to 25% in pensions.”

The board also said Tuesday that the name of the bonus should “better reflect its true nature as part of the regular compensation package of public employees.”

The fiscal panel added that it will continue to work with Vázquez “on many important issues, while her administration will submit legislation regarding the true nature of this element of compensation early next year.”

Jaresko, said that “in order to pay the ‘Christmas Bonus’ this year, the government will submit a budget reapportionment request for central government agencies to the oversight board for review and approval.” 

Jaresko further noted that public corporations with their independent fiscal plans must find savings within their payroll budget and submit a reapportionment request to the board for its approval to pay the bonus.

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