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Puerto Rico: Contracts of employment

Original and updating authors: Shiara Diloné-Fernández, Elizabeth Pérez-Lleras and Anabel Rodríguez-Alonso, Littler

Summary

  • A written employment contract is not generally required for an employer-employee relationship to arise, but probationary and fixed-term contracts must be in writing in certain circumstances, as must non-competition and similar clauses. (See General)
  • Probationary periods are permitted and, in order for an employer to be exempt from potential liability to compensate an employee if it terminates the employment without "just cause" during this period, the probationary period must be based on a written contract that meets certain requirements, including a term of no more than 90 days. (See Probationary periods)
  • Employment contracts may be concluded on an open-ended basis or for a fixed term, and fixed-term contracts must meet certain requirements in order for the employer to be exempt from potential liability to compensate the employee if it terminates the employment without "just cause". (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)