Welcome to Puerto Rico!

Fixed-term contracts are permitted in Puerto Rico for a specific period or project but must be reasonably limited in duration to justify their temporary nature. They should not be repeatedly renewed. Cumulatively, they should not be longer than three years. Depending on the facts, they can be deemed indefinite. For example, if work continues beyond the expiration of the term, the contract will be deemed indefinite. Fixed-term contracts are exempt from the just cause requirement for termination.

Probationary periods are permitted and automatically applied. Executive, administrative, and professional (“exempt”) Workers are automatically subject to a 12-month probationary period. For all other Workers (“non-exempt”), the period is nine months.

There is no right to paid holidays or mandatory observance of public holidays in the private sector. What holidays are observed are determined by the company. In addition to the US Federal Holidays, Puerto Rico also considers the following to be public holidays: Epiphany (January 6) American Citizenship Day (March 2) Emancipation Day (March 22) Birthday of Jose de Diego (April 19) Puerto Rican Independence Day (July 5) Birthday of Don Luis Munoz Rivera (third Monday in July) Constitution Day (July 24) Birthday of Jose Barbosa (July 27) Discovery of Puerto Rico Day (November 19) Emancipation Day (December 2)

Non-exempt Workers accrue paid vacation at a rate of one-half day for each month where 130 hours or more were worked. Vacation should be taken in a single consecutive period unless a supervisor authorizes splitting the time. Accrued but unused vacation must be paid at the time of termination. Workers may cash out up to 10 days of vacation with the employer’s approval. Exempt Workers’ vacation benefits are not statutory. They must be outlined by the employment agreement.

Non-exempt Workers accrue sick leave at a rate of one day for each month where 130 hours or more were worked. Unused sick leave carries over year to year, but cannot exceed 15 days. Exempt Workers’ sick leave benefits are not statutory. They must be outlined by employment agreement.

The regular fulltime workweek for non-exempt Workers is generally work 8 hours per day and 40 hours per week.

Non-exempt Workers are entitled to 150% of wages for work performed in excess of the regular workweek. Exempt Workers are not entitled to overtime. Rather, they are compensated for each week of work regardless of hours worked.

All Workers with at least 1,350 hours or more worked during the period of October 1 to September 30 of the prior year are entitled to a Christmas bonus, which is generally equivalent to 2% of the salary earned, not to exceed $600. During the first year of employment, Workers can qualify for only half of the Christmas bonus. Bonuses must be issued between November 15 and December 15.

Termination requires just cause (e.g. improper conduct, poor performance, etc.) or the payment of a statutory severance equal to three months’ salary plus two weeks’ salary for each year of service, capped at nine months total. 

There are no statutory requirements for Worker resignation.