Private Sector Coalition presses Rosselló for labor reform

Written by  //  January 5, 2017  //  General Biz News  //  No comments

Francisco Montalvo

The Puerto Rico Private Sector Coalition on Wednesday revisited its quest for labor reform, asking Gov. Ricardo Rosselló to present necessary legislation to promote a new environment for employers.

“Puerto Rico requires a labor policy aimed at becoming an attractive jurisdiction to establish businesses and create employment opportunities in the private sector,” said Francisco Montalvo-Fiol, coordinator of the nonprofit group, in a letter to Rosselló.

Believing that current times and that Puerto Rico’s economic situation needs it, the PSC requested a series of changes to flexibilize several labor laws. Among the recommended measures are several that would apply only to employees hired in the future.

The group that represents 27 Puerto Rican organizations asked the governor to amend the income tax law to allow employees in Puerto Rico to be granted all marginal benefits contained in so-called “cafeteria plans” and that the payment made to a terminated employee is exempt from income taxes.

“That way it encourages giving more voluntary benefits to workers, and that they have more money in their pocket when they are out of work, and that the money will be reinvested in the local economy,” said Montalvo.

Another measure requested seeks more flexibility is to allow more flexibility in working hours and the period for food breaks. The group believes the law should allow for employees to agree with their employers to authorize alternating or flexible weekly work itineraries.

“With these agreements, an employee could comply with their weekly work schedule in fewer days, and thus have more free time, without representing time lost at work for the employee or an additional cost to the employer,” Montalvo said.

“But in any case, hours worked in excess of 10 in a day will continue to be paid at time and a half,” he added.

The PSC is also requesting that probation periods of up to 18 months be allowed for new employees, and facilitating the use of temporary contracts.

Regarding dismissal and discrimination laws, the PSC believes the presumption that employers always violate the law must be eliminated.

“These assumptions are not justified, and adversely affect the ability to make decisions necessary for the well-being of the company and all its components,” he said.

“It should be clear that employers are reluctant to dismiss their employees. However, it is sometimes necessary to make that decision,” Montalvo said.

In such cases, there should be a limit to the amount to be paid and it is recommended that the limit be six months of salary,” he added.

The PSC also addressed the controversial Closing Law, which they said is obsolete and effectively increases operating costs for retailers. The group called for the elimination of the law.

Meanwhile, the group asked for the State Insurance Fund — which has a monopoly on managing the insurance program for occupational accidents — should be opened to competition. They claimed the system prevalent in most U.S. states where private insurance is available, they can offer protection and have proved to be more efficient and less costly.

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