House committee hears support, legal caveats for bill to require contracts and payment terms for freelancers

A House committee examining Proyecto de la Cámara 936 on protections for freelancers heard testimony that backed the bill’s objectives while flagging legal and administrative questions that must be resolved before passage.

The measure would require that individuals and entities that hire or subcontract services from freelancers, independent professionals, entrepreneurs or small and medium enterprises formalize those agreements in written contracts, set minimum payment conditions, establish penalties for noncompliance and create an office to support freelancers and entrepreneurs attached to the Department of Labor and Human Resources.

The Banco de Desarrollo Económico para Puerto Rico told the committee it supports the bill’s goal of protecting freelancers but urged amendments to harmonize the proposal with Puerto Rico’s existing labor and civil-contract framework. “El ordenamiento jurídico vigente en Puerto Rico ya cuenta con mecanismos para regular las relaciones contractuales,” said Rafael Hugo Guzmán, gerente de asuntos legales del Banco de Desarrollo Económico para Puerto Rico, and he recommended that the Department of Labor and Human Resources evaluate compatibility with laws distinguishing bona fide employees from independent contractors.

Guzmán told lawmakers the bank recognizes the bill’s intent but identified points needing clarification, including the definitions and scope of the proposed administrative penalties, the destination of fine revenues, the interplay between proposed quasi‑adjudicative administrative mechanisms and existing judicial remedies, and whether the bill would inadvertently extend labor‑law protections to relationships meant to be commercial. “Es necesario armonizar la medida con el marco legal vigente,” Guzmán said, offering the bank’s collaboration during the legislative process.

Committee members pressed for basic data on how many freelancers the bank serves and how written contracts would affect credit decisions. Ricardo Marrero, who accompanied the bank’s legal counsel, said the bank does not track a separate freelancer count but that the institution currently had roughly 155 clients in its active portfolio and offered to provide a sectoral breakdown and loan figures on request. “Actualmente nosotros tenemos 155 clientes,” Marrero said; he also reported roughly $19.9 million in financing concentrated in services and about $55.7 million in approved credit.

Lawmakers discussed how contracts factor into underwriting. Guzmán said a written contract provides certainty for lenders but does not guarantee that a contracting party will pay a subcontractor; the bank also relies on bank accounts, financial statements and business plans to evaluate startups. Committee members signaled interest in amendments and in obtaining technical input from the Department of Labor and the Department of Development and Commerce.

Representative Lilibeth Rosas (District 19, Mayagüez–San Germán) voiced strong support for the project, noting the challenges small merchants and young entrepreneurs face in western Puerto Rico and urging tools that foster local business growth.

The committee asked the Banco de Desarrollo to provide the requested data within five days to inform further amendments and said it will invite the Department of Labor and the Department of Development and Commerce for additional input. No formal vote was recorded at the hearing; the chair closed the session for the record at 10:56 a.m.