Following sweeping labor reform legislation in 2017, Puerto Rico’s Department of Labor and Human Resources has released guidance clarifying its interpretations of the act and how it plans to implement and administer the new legal framework, which included changes to more than a dozen employment statutes in Puerto Rico.
The Puerto Rico Department of Labor and Human Resources (Department) issued the first edition of its Guide for the Interpretation of Puerto Rico’s Employment Legislation (Guide) on May 8 containing discussion, interpretation, and analysis of the changes brought forth by the Labor Transformation and Flexibility Act (Act) signed into law on January 26, 2017. The Act made significant changes to more than a dozen existing statutes in Puerto Rico, including those governing wrongful termination, wages and hours, vacation and sick leave entitlement, lactation breaks, and employment discrimination.
Because the Act introduced numerous sweeping changes to the employment legal landscape in Puerto Rico, the Guide seeks to clarify the Department’s interpretations of and positions regarding the Act so employers and employees alike can understand and predict how the Department plans to implement and administer the new legal framework. The Department clarified that the Guide is not intended to create substantive or procedural rights apart from the 2017 legislation; it is simply an additional resource for employers and employees aimed at furthering the equitable and uniform application of labor legislation and regulation in Puerto Rico.
Chapter 1 of the Guide highlights and elaborates on principles of interpretation that the Department believes should guide relevant stakeholders, including courts, when interpreting the statutes and adjudicating employment disputes. At the outset, the Department describes a canon of interpretation often invoked by the Supreme Court of Puerto Rico that, in the case of ambiguity, courts should interpret the law in favor of the worker. The Department noted that although certain statutes have a remedial character, this interpretive principle departs from the general principle that courts should look primarily to the plain text of the law and contextual factors to ascertain legislative intention.
Rather, as its first principle of interpretation, the Department advocates that to the extent there is ambiguity with respect to an employment relationship, an employment agreement, or the applicable employment rules or laws, the proper interpretive approach looks to the text and purpose of the law, the text and purpose of the employment agreement and employment policies at issue, the purpose of the employment relationship, and productivity. Moreover, to the extent the employer reserves the discretion to interpret or apply its policies, such discretion should be respected absent arbitrary, capricious, or otherwise unlawful conduct or interpretations on the part of the employer.
The Guide’s second interpretive principle is to the extent that a Puerto Rican law that purports to regulate aspects of an employment relationship is similar to a US federal law or regulation, it should be interpreted in a manner that is consistent with US federal norms and rules unless Puerto Rican law expressly requires a different interpretation. In other words, unless a statute specifically provides otherwise, the intent is to incorporate normative developments, legislative interpretations and jurisprudence, and federal worker protections of the United States into Puerto Rican law in order to maintain uniformity and fill interpretive gaps.
Chapter 2 of the Guide provides an additional explanation of the “grandfather” clause contained in the Act. It clarifies that the clause does not mean that so long as employees were employed by the same employer prior to January 26, 2017, the changes contemplated by the Act do not apply to them. Rather, the clause was meant to express the Legislative Assembly’s general intention to leave unharmed the preexisting rights enjoyed by the working class. The Guide recognizes, however, that there are sections of the Act that apply only to employees hired after January 26, 2017, and that other sections apply to all employees, irrespective of hire date. Therefore, careful attention should be paid to the text of the Act to determine which employee populations the changes affect.
The rest of the Guide provides interpretative guidelines for the remaining chapters of the Act, including the following:
At more than 200 pages, these are just some of the examples the Guide covers. Puerto Rico employers should carefully review the Guide and examine their employment and payroll policies and procedures in light of the interpretative guidance. Paying careful attention to which employees are covered by the Act’s provisions, employers should revise their employment handbooks to reflect these provisions consistent with the Guide’s analysis and interpretation.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
Melissa C. Rodriguez
Anne Marie Estevez
 Departamento del Trabajo y Recursos Humanos, Guías para la Interpretación de la Legislación de Puerto Rico (1era ed. 2019).