Licence to operate an employment agency

The legal definition of “employment agency” is broader than people assume, which is why it is worth reading in full. It means any person or organization that, whether for a fee or free of charge, regularly: obtains, offers or attempts to obtain employees for people wanting workers’ services, or employment for people wanting to work; supplies workers to render services under the direct or indirect supervision or direction of people seeking workers’ services; through advertisements, paid by it or by the employers, solicits candidates for employment on others’ behalf — newspaper, radio and television companies being excluded when they publish advertisements in the course of their operations; through personal interviews, psychological or aptitude tests, occupational classification of candidates or analogous procedures, refers such candidates to employers wanting their services, except when providing those services for employees or candidates referred directly by the employers; or gives information, by any means, about where workers’ services can be obtained or where employment can be found, in seeking to carry out any of the foregoing acts.

Any person or organization falling within that definition needs a licence before operating. The Secretary of Labor does not issue it automatically: the Secretary, personally or through subordinates, conducts an investigation into the applicant’s character, morals, commercial integrity and any other factor deemed appropriate. Once the investigation is done, if the Secretary finds the applicant of good moral conduct and commercially responsible and in compliance with the other requirements provided or that may be provided by regulation, the licence is issued.

• Filing the application on the form supplied by the Labor Standards Bureau.Verified against the official source
• Posting a $3,000 damages bond and presenting evidence of payment.Verified against the official source
• Submitting a Negative Criminal Record Certificate.Verified against the official source
• Submitting a $25.00 internal revenue stamp.Verified against the official source
• Presenting the Certificate of Incorporation issued by the Department of State and the Certificate of Good Standing.Verified against the official source
• Filing the fee schedule.Verified against the official source

• The Labor Standards Bureau’s application form, evidence of payment of the $3,000 bond, the Negative Criminal Record Certificate, the $25.00 internal revenue stamp, the Certificate of Incorporation, the Certificate of Good Standing and the fee schedule.

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   Step 1: Confirm whether what you are doing is an employment agency

   Ley 417’s definition captures more than people think, and it does not depend on charging. It covers anyone who regularly obtains employees for employers or employment for workers; who supplies workers rendering services under someone else’s supervision; who advertises seeking candidates on employers’ behalf; who interviews, administers psychological or aptitude tests or classifies candidates and refers them; and even someone who simply gives information about where to find workers or work, when doing so in pursuit of any of those acts. Newspaper, radio and television companies are excluded when publishing advertisements in the normal course of their operations.

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   Step 2: Be clear that operating without a licence is a crime

   Ley 417 does not leave it at an administrative fine: anyone operating an employment agency without first having obtained a licence issued by the Secretary of Labor commits a misdemeanour. It is not a filing you can work on while the business is already running.

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   Step 3: Gather the six requirements

   They are: the application on the form the Labor Standards Bureau supplies; the $3,000 damages bond with evidence of payment; the Negative Criminal Record Certificate; the $25.00 internal revenue stamp; the Certificate of Incorporation issued by the Department of State together with the Certificate of Good Standing; and the fee schedule. That last one is substantive, not bureaucratic: you are declaring in writing what you will charge.

4. 4

   Step 4: The Secretary’s investigation

   Once everything is filed, the Secretary proceeds, personally or through any subordinate, to investigate the applicant’s character, morals, commercial integrity and any other factor deemed appropriate. If, after the investigation, the Secretary finds you of good moral conduct and commercially responsible, and in compliance with the other requirements provided or that may be provided by regulation, the licence is issued.

5. 5

   Step 5: If you are the worker and you were charged

   The same office that licenses these agencies is the one to call if one charged you to find you work and you suspect it has no licence, or if you were charged something not on its filed fee schedule. The phone is (787) 754-5353, extensions 12418 and 12419, or the email normas@trabajo.pr.gov. The Labor Standards Bureau’s Special Laws Unit is the one that enforces Ley 417.

Labor Standards Bureau, Edif. Prudencio Rivera Martínez, 9th floor, 505 Ave. Muñoz Rivera, San Juan, PR 00918. Phone (787) 754-5353, extensions 12418 and 12419. Email normas@trabajo.pr.gov. DTRH also publishes a Bulletin on Ley Núm. 417 on its Employment Agencies page.

• Starting to place staff before holding the licence: that is a misdemeanour.
• Believing that if you charge no fee you are not an employment agency: the definition applies “whether for a fee or free of charge”.
• Assuming that supplying workers under another company’s supervision does not count: it is expressly within the definition.
• Filing without the fee schedule.
• Filing without the Negative Criminal Record Certificate.
• Budgeting only the $25.00 stamp and forgetting the $3,000 bond.
• Going to the Department of State for the certificates after filing rather than before.

These are the government pages this guide is based on.

• Departamento del Trabajo y Recursos Humanos (DTRH)

  Departamento del Trabajo

  www.trabajo.pr.gov