Search form

Employment-at-Will Comes to Puerto Rico?

By Juan Felipe Santos and Maralyssa Álvarez-Sánchez
  • June 7, 2018

Puerto Rico’s Financial Oversight and Management Board and Governor Ricardo Rosselló have sent bills to the Puerto Rico legislature to repeal the Unjust Dismissal Act, Act No. 80 of May 30, 1976 (Act 80). If either bill is enacted, employers in Puerto Rico will no longer be required to have “just cause” to dismiss employees hired for an indefinite term.

Puerto Rico’s Unjust Dismissal Act

Puerto Rico is one of the few U.S. jurisdictions that does not recognize employment-at-will. Employers in Puerto Rico must have “just cause” for dismissal of any employee. Employers who are found in violation of Act 80 must pay a statutory severance for terminations without “just cause.”

Act 80 establishes six general categories of just cause dismissals. They relate to employee performance and conduct, as well as employer reorganizations and layoffs. For reductions in force, with some exceptions, Act 80 generally requires seniority as the selection criteria. Act 80 also provides for severance in transfers of ongoing businesses and establishes statutory probationary periods during which an employer is exempted from the just cause requirement, among others things.

To address Puerto Rico’s fiscal crisis, in 2016, President Barack Obama enacted the “Puerto Rico Oversight, Management, and Economic Stability Act” (known as “PROMESA”). PROMESA established the Oversight Board to assist the Government of Puerto Rico in managing its public finances. (For more on PROMESA, see our article, Puerto Rico Does Not Have to Comply with DOL’s Final Rule Amending ‘White Collar’ Overtime Regulations, For Now.) The Oversight Board has long-believed that Act 80 hinders economic development in Puerto Rico and recommended its repeal, among other austerity measures.

Senate Bill 919

On May 9, 2018, the Oversight Board presented Senate Bill 919 (SB 919) to establish a Puerto Rico minimum wage of $7.50 an hour (conditioned upon the repeal of the local Christmas bonus law) and to reduce the accrual vacation (up to 15 days) and sick leave (12 days) to seven days each. (For more on the Christmas bonus law, see our article, Puerto Rico Labor Department Updates Regulations on Payment of Annual (Christmas) Bonus.) Staggered increases of the minimum wage are dependent on an increase in the local labor participation rate.

SB 919 is pending before the Puerto Rico Senate’s Federal Relations Committee for public hearings, but it does not have the general support of the Legislature or Governor Rosselló.

Senate Bill 1101

After conferring with the Oversight Board, Governor Rosselló presented Senate Bill 1101 (SB 1101) on May 29, 2018. In its original form, SB 1101 would repeal Act 80 for all employees effective January 1, 2019, but would not eliminate the Christmas bonus or reduce statutory vacation and sick leave benefits for eligible employees.

The Senate approved SB 1101, but with amendments to provide that it would apply only to employees recruited after its enactment. That is, Act 80’s just cause requirement would continue to apply to dismissal of employees hired before the enactment of SB 1101. The bill is before the House of Representatives, which is holding public hearings. The Oversight Board has stated publicly that it opposes prospective application of the Act 80 repeal.


The San Juan office of Jackson Lewis will continue to monitor SB 919 and SB 1101 and will provide updates on any developments. Please contact us if you have any questions.

©2018 Jackson Lewis P.C. This material is provided for informational purposes only. It is not intended to constitute legal advice nor does it create a client-lawyer relationship between Jackson Lewis and any recipient. Recipients should consult with counsel before taking any actions based on the information contained within this material. This material may be considered attorney advertising in some jurisdictions. Prior results do not guarantee a similar outcome.

Reproduction of this material in whole or in part is prohibited without the express prior written consent of Jackson Lewis P.C., a law firm that built its reputation on providing workplace law representation to management. Founded in 1958, the firm has grown to more than 900 attorneys in major cities nationwide serving clients across a wide range of practices and industries including government relations, healthcare and sports law. More information about Jackson Lewis can be found at

See AllRelated Articles You May Like

August 22, 2019

Illinois Expands State Human Rights Act to Include Employers with One or More Employees

August 22, 2019

An amendment to the Illinois Human Rights Act (IHRA) expands the definition of “employer” from employers with at least 15 employees to those with one or more employees. The legislation, House Bill 252, was signed by Governor J.B. Pritzker on August 21, 2019, and enacted as Illinois Public Act 101-0430. The new law will become... Read More

August 13, 2019

New York Expands Harassment Laws, Protections of Religious Attire, Clothing, or Facial Hair

August 13, 2019

New York state has enacted sweeping new workplace harassment protections for employees, including lowering the standard for when harassment is actionable. It also has adopted new law prohibiting employment discrimination based on religious attire, clothing, or facial hair. Workplace Sexual Harassment On August 12, 2019, Governor... Read More

August 12, 2019

Illinois Enacts Workplace Harassment Law, Creating New and Expanded Obligations for Employers

August 12, 2019

Employers in Illinois will have new obligations related to employment contracts, training, and agency oversight under a wide-ranging bill signed by Governor J.B. Pritzker on August 9, 2019, that is intended to combat workplace harassment and provide greater protections for employees. Senate Bill 75 unanimously passed both houses of... Read More

Related Practices