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Puerto Rico: Contracts of employment

Original and updating authors: Shiara Diloné-Fernández, Elizabeth Pérez-Lleras, Anabel Rodríguez-Alonso, Daniel Limés Rodríguez and José L. Maymí-González, Littler.

Consultant editor: Edwin J Seda-Fernández, Adsuar Muñiz Goyco Seda & Pérez-Ochoa, PSC

See the legal services provided by the authors/consultant editors of XpertHR International > Puerto Rico, including any discounts/offers for subscribers.


  • Act 41-2022, enacted on 20 June 2022, introduces significant changes to employment regulation by amending and repealing portions of the Puerto Rico Labor Transformation and Flexibility Act (Ley de Transformación y Flexibilidad Laboral), Act no. 4 of 26 January 2017. (See Act 41-2022)
  • A written employment contract is not required for an employer-employee relationship to arise, but non-competition and similar clauses must be in writing. (See General)
  • Probationary periods are automatically incorporated in employment contracts and an employer is exempt from potential liability to compensate an employee if it terminates the employment without "just cause" during this period. (See Probationary periods)
  • Employment contracts may be concluded for an indefinite duration or for a fixed term if they are made in connection with a specific term or project. (See Types of contract)
  • In private-sector employment, there is no legal requirement that employers state the general terms and conditions of employment in writing, although employers often set out many key terms in an employee handbook or code of conduct, which is considered to be a contract between the employer and employee. (See Written statement of terms of employment)
  • Employers are generally free to modify employees' terms and conditions of employment, unless this is prohibited by the employment contract or the modification is for reasons that are prohibited by law. (See Variation of contract)
  • For a non-competition clause to be valid, it must comply with certain requirements, for example with regard to the employer's legitimate interest in the clause, the scope and duration of the restrictions on the employee, and the consideration offered to the employee in exchange. (See Non-competition clauses)