PUERTO RICO: An Introduction to Labour & Employment

The Current Labour and Employment Landscape in Puerto Rico in Light of the Trump Administration’s Public Policies and Executive Orders

Because Puerto Rico (PR) is a territory of the United States, federal legislation and regulations – with very few exceptions – apply to PR. The impact of public policy decisions and EOs related to labour and employment is also felt on the island. Employers with operations in PR must, therefore, be vigilant about the effects of recent policy changes – to face the challenges created by these changes and adequately adjust their policies and procedures. Indeed, some of the changes directly contradict local PR legislation, resulting in much confusion for employers. Below, we discuss the most significant changes to be aware of.

Executive Order 14168: Defending Women From Gender Ideology Extremism and Restoring Biological Truth to the Federal Government

On 20 January 2025, President Trump signed EO 14168, defining “sex” as an individual’s immutable biological classification as either male or female in an effort to eliminate so-called gender ideology. According to the order, “gender ideology” “replaces the biological category of sex with a fluid and self-assessed concept of gender identity, falsely asserting that individuals can change their sex and compelling institutions to accept these claims as fact”. It further describes gender identity as a term representing a subjective sense of self that is detached from biological realities, existing on an infinite continuum and lacking a meaningful basis for identification or as a substitute for sex.

To enforce these principles, the order mandates that all federal agencies and employees must uphold laws protecting sex-based rights, opportunities and accommodations based on biological distinctions. The order also asks the US Attorney General “to ensure the freedom to express the binary nature of sex and the right to single-sex spaces” and ensure access to single-sex spaces, such as bathrooms, in workplaces and federally funded entities under the Civil Rights Act of 1964. Additionally, it directs key federal officials, including the Attorney General, the Secretary of Labor and the leadership of the Equal Employment Opportunity Commission (EEOC), to prioritise investigations and legal actions that uphold the “rights” and “freedoms” outlined in the order. The EO also makes it clear that facilities should be restricted to one of the two biologically recognised sexes. Following this directive, the EEOC announced the agency’s renewed focus on protecting women from sexual harassment and sex-based workplace discrimination, signalling a departure from the former administration’s gender identity policies.

Despite the federal government’s emphasis on protecting access to single-sex facilities, employers face conflicting requirements under federal and state laws, and PR is no exception. This tension highlights the complexities of navigating legal obligations in light of differing interpretations of the concepts of sex and gender identity. Importantly, EO 14168 is not a law, but rather an executive directive mandating that federal agencies implement the administration’s public policies. As such, it does not alter an employer’s obligation to comply with state law. In PR, Act 22-2013 established the public policy of eradicating discrimination based on sexual orientation or gender identity in employment. Further, it amended several statutes addressing discriminatory practices in employment, including PR’s general discrimination statute, Act 100-1959. Act 22-2013 defines sexual orientation as "the ability of each person to feel an emotional, affective or sexual attraction to people of a gender different from their own, or of the same gender, or of more than one gender", and gender identity as "the way in which a person identifies and recognises themselves in terms of gender, which may or may not correspond to their biological sex or sex assigned at birth". As such, denying access to sanitary or other genderised facilities to employees who identify differently would violate Act 100-1959, among other pieces of legislation amended by Act 22-2013, and be contrary to the protocol adopted by the PR’s Department of Labor. Consequently, employers are counselled to seek legal advice when analysing compliance with the new EEOC guidelines regarding genderised spaces, in order to avoid discrimination claims under local legislation.

Ending “illegal discrimination” and restoring “merit-based opportunity”

On 21 January 2025, President Trump signed EO 14173. By its very terms, the EO seeks to ensure the enforcement of federal civil rights laws and put an end to the enforcement of policies and initiatives that the administration claims result in race- and sex-based preferences under the concepts of diversity, equity and inclusion (DEI). The EO emphasises protecting civil rights, promoting individual merit and eliminating alleged discriminatory practices in both the public and private sectors. The EO also directs federal agencies to take steps to end DEI practices in the private sector, and to issue guidance to educational institutions on complying with civil rights laws. In response to this EO, on 19 March 2025 the EEOC issued a poster and a questionnaire encouraging employers to adopt policies that focus on "individual merit, aptitude, hard work, and determination" when choosing people for positions, promotions, etc. Employers in PR with DEI programmes must be aware that the implementation of these programmes has to be in compliance with EEOC guidance to reduce legal risks, particularly for federal contractors.

Restoring “equality of opportunity” and “meritocracy”

Similarly, on 23 April 2025, President Trump signed EO 14281, with the stated purpose of “restoring equality of opportunity” and “meritocracy” by eliminating the use of disparate-impact liability in discrimination cases. The EO emphasises the importance of treating individuals equally under the law, without race- or sex-based preference, and promotes merit-based decisions in employment and other areas. The order directs federal agencies to deprioritise the enforcement of regulations that include disparate-impact liability and mandates the repeal or amendment of related Title VI regulations. Overall, it seeks to uphold the principles of the civil rights movement by ensuring that success is determined by “individual effort and achievement”. This EO introduces several changes to existing legislation, directing the heads of all executive agencies to request that each contract or grant be awarded a certification to show that the contractor or grantee understands that its compliance "with all applicable federal antidiscrimination laws is material to government payment decisions", and a certification that the contractor or grantee "does not operate any programme that promotes DEI that violates applicable federal antidiscrimination laws". Under the EO, these certifications are material to the government's decision to pay the contractor. The EO addresses prime contractors and grant recipients, including acquisition contracts filtered through the executive agencies and departments based on the Federal Acquisition Regulation (FAR). However, it will also apply to non-FAR-based contracts and any contractual agreement between the US Government and a private entity, and it is likely to apply to subcontractors and sub-recipients. Therefore, all recipients of government funds should be kept informed of the new administration's guidelines.

Immigration policies of the new administration

With the federal government's new immigration policies and its crackdown on immigrant communities in PR, an increase is anticipated in Immigration and Customs Enforcement audits and inspections of employers to verify compliance with federal immigration regulations. It is important that employers implement effective strategies to ensure compliance and establish work plans on how to handle related audits and inspections during the coming years.