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ARTICLE · 21 FEBRUARY 2017

Puerto Rico Issues Comprehensive Labor Law Reform

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On January 26, 2017, Puerto Rico's Governor, Ricardo Roselló, signed into law the Labor Transformation and Flexibility Act.

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Executive Summary: On January 26, 2017, Puerto Rico's Governor, Ricardo Roselló, signed into law the Labor Transformation and Flexibility Act (the "Act"). The Act represents the first significant and comprehensive labor law reform to occur in Puerto Rico in decades. Prior to the Act, Puerto Rico's labor laws were historically employee-friendly. The Act has changed the employment landscape in Puerto Rico making the labor laws more business-friendly. Unless otherwise stated in the Act, the revisions in the law will apply only to employees hired after January 26, 2017. The most significant changes to the labor law are explained below.

Law 80 – Severance Pay for Termination without Just Cause. Changes include:

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