Employment Laws in Puerto Rico.

Employers who terminate employees without just cause must pay severance ("mesada"). For employees with less than 15 years of service: 3 months' salary plus 2 weeks per year of service. For 15+ years: 6 months' salary plus 3 weeks per year. The 9-month severance cap from the 2017 reform was repealed by Act 41-2022.

Prohibits employment discrimination based on race, color, national origin, social condition, political affiliation, religious beliefs, sex, sexual orientation, gender identity, disability, and status as a victim of domestic violence. Employers found guilty may face double damages and potential criminal penalties.

Puerto Rico's minimum wage is $10.50 per hour, effective July 1, 2024. This is set by a Minimum Wage Review Commission. The federal minimum wage ($7.25) serves as a floor, but Puerto Rico's local rate is higher.

Employees who work at least 115 hours per month accrue 1.25 days of vacation and 1 day of sick leave per month. Vacation cannot be used until accrued for one year. Unused sick leave carries over up to a maximum of 15 days.

Protects employees who report violations of law, fraud, corruption, or workplace safety hazards. Employers cannot retaliate through termination, demotion, pay reduction, or hostile work environment.

Prohibits sexual harassment in the workplace. Act 82-2022 requires all employers to implement written harassment prevention policies and protocols. Employers must provide training and establish complaint procedures.

Non-compete agreements are enforceable if limited in duration (maximum 12 months), geographic scope, and client restrictions. Must be in writing. The Puerto Rico Supreme Court has rejected the "blue pencil" approach — overbroad clauses are void, not reformed.