Puerto Rico
Knowledge Base
Frequently asked question, important data and information on EOR.
General information
$ 8.50 USD per hour
Labor Law
Laws that regulate Labor Relationship
Labor Laws of Puerto Rico and the United States of America
Law Number 41 of 2022
Onboarding guide
Requirements for a labor contract
• Name and address of employer.
• Name and address of employee.
• Job title.
• Job description.
• Salary.
• Agreed Deductions from salary.
• Pension or Provident fund benefits, rules.
• Medical Aid benefits, rules and contributions.
Pre-hire Medical exam
No
Types of contracts
• Indefinite
• Fixed-term
Probation Period
The probation period is extended from three months to six months, with a written request to the Labor Secretary.
Labor Code
Are offer letters mandatory in the country?
Not Mandatory
Are digital signatures in labor contracts valid?
Permitted
Mandatory onboarding documents
• Copy of social security card
• Valid driver’s license or Copy of passport
• Form 499 r
• USCIS Form I9
• Job application
• Direct deposit form
• Criminal Record Certificate
Statutory benefits
Annual Bonus
To get the annual bonus, the employee must work 700 hours within the 12 months from October 1 through September 30 of the following calendar year.
Additionally, if:
• the employer is considered a micro-enterprise, a small or medium business (SME), and the minimum number of hours worked is 900 hours.
• they are dock employees, it is enough that they have worked 100 hours.
• If the employer has more than 20 people employed for more than 26 weeks within the 12 months in this period, it is obliged to grant a bonus of 3% of the salary up to a maximum of $600.
• if the employer has 20 employees or fewer for more than 26 weeks within the 12 months in this period, or is an SME, it is obliged to grant a bonus of 3% of the salary up to a maximum of $300.
This payment is usually made between December 1st and 15th each year.
Additional bonus
Doesn’t apply
Leaves (medical, maternity, paternity, etc.)
• Unpaid Leave: Employees may be eligible to take unpaid, job-protected leave under the Family Medical Leave Act (“FMLA””).
• Sick Leave: The minimum monthly accrual for sick leave shall be 1 day for each month, as long as the employee works 32.5 hours weekly. It begins to accrue from the start of the employee’s probationary period. Up to five days of medical leave may be used in connection with the illness or medical treatment of a child, parent, spouse, elderly or disabled person, or person in the employee’s custody or guardianship. Sick leave pay shall be equivalent to at least the regular hourly rate earned by the employee during the month in which such leave was accrued, except in the case of employees whose salary is based on nondiscretionary commissions or other incentives.
• Voting Leave: All public and private sector employees who are registered voters and are scheduled to work on a voting date. Employees who are unable to know their work schedule in advance on a voting day will be entitled to 2 hours of paid leave during the work day to vote.
• Maternity leave: You are entitled to 8 weeks of maternity leave. A medical certificate must be presented stating that you are pregnant and the estimated date of birth. The leave consists of 4 weeks of prenatal leave and 4 weeks of postnatal leave. If postnatal complications arise, maternity leave may be extended up to an additional 12 weeks of unpaid leave. Full salary will be paid.
• Breastfeeding: Employers must provide full-time breastfeeding mothers with unpaid breaks for breastfeeding or expressing breast milk for 1 hour each day, which may be divided into two 30-minute periods or three 20-minute periods.
• Adoption leave: Mothers who have an infant five years of age or younger who was not yet enrolled in school. Will be entitled to the same eight-week paid maternity leave benefit granted to birth mothers. Older infants six years of age or older will be entitled to up to 5 weeks of paid maternity leave.
• Caregiver leave 5 days of medical leave in connection with the illness or medical treatment of a child, parent, spouse, elderly or disabled person, or person in the employee’s custody or guardianship.
• Catastrophic Illness Leave: An employee who has worked with the same employer for more than 12 months and must have worked an average of at least 130 hours per month during such period shall be eligible for this Special Leave with pay of up to a maximum of six (6) working days per year, in addition to those to which the employee is already entitled by law.
• Military Leave: entitled to unpaid leave for private sector employees who are members of the Puerto Rico Military Forces.
• Jury Duty Leave: Any person employed by a private employer, who has been summoned to serve as a juror in a court of law, shall be entitled to take paid leave from his or her employer up to a maximum of 15 days.
• Domestic Violence Victim Leave: An employee may use Special Leave to seek counseling, obtain a restraining order or court order, seek and obtain legal assistance, and seek and obtain housing or safe space in a shelter.
• Athletic Leave: Athletes, coaches, and other sports participants certified by the Olympic Public Relations Committee are entitled to 30 days of unpaid leave per year to participate in training or competition (if participation is certified by the Olympic Public Relations Committee).
Annual Leave (days per year)
The structure for accumulation of vacation leave is the following:
• During the first year of work: will accumulate (½ day) 4 hours per month, for a total of 6 vacation days per year.
• From the first year and one day to the fifth year of work: will accumulate (three quarters 3/4 of the day) 6 hours a month, for a total of 9 days a year.
• From the fifth year and one day, to the fifteenth year of work: will accumulate (1 day) 8 hours per month for a total of 12 days per year.
• After fifteen years and one day of work: you will accumulate (1 day and a quarter of a month, 1/4 a month) 10 hours, for a total of 15 days a year.
How do vacation days expire?
At the written request of the employee, the employer may allow the partial or total liquidation of the accrued vacation leave.
Official Holidays
•January 01 New Year’s Day
•January 06 Three Kings Day
•January 16 Martin Luther King, Jr. Day
•February 20 Presidents’ Day
•March 22 Emancipation Day
•April 07 Good Friday
•April 14 Easter Day
•May 14 Mother´s Day
•May 29 Memorial Day
•June 18 Father’s Day
•July 4 Independence Day
•July 25 Puerto Rico Constitution
•September 4 Labour Day
•October 9 Race day
•November 11 Veteran’s Day (Not mandatory)
•November 19 Discovery of Puerto Rico Day (Not mandatory)
•November 23 Thanksgiving Day
•December 25 Christmas Day
Working on holidays and Sundays
Paid at 50% on top of the regular wage. If is student, the paid is at 100%.
Number of Working hours
8 hours a day, 40 hours per week. 30 hours a week for part time workers
Overtime
Paid at 50% on top of the regular wage
Social Security (what does it cover)
•Old-Age (retirement)
•Survivors, and Disability Insurance (OASDI)
Payroll
Salary payment currency
United States Dollar (USD)
Can salary be paid in a different currency other than the local currency?
No
Payment frequency
• Weekly
• Biweekly
• Semimonthly
VAT percentage
10.50%
Income Tax
Individual income tax is levied on income obtained by resident and non-resident individuals. The progressive income tax rates ranges from 0% to 33.00%. For more information see https://taxsummaries.pwc.com/puerto-rico/individual/taxes-on-personal-income
Tax Payer Identification Number
• A Social Security number (SSN)
• An Individual Taxpayer Identification Number (ITIN)
• An Employer Identification Number (EIN), also known as a FEIN (Federal Employer Identification Number)
• Adoption taxpayer identification number (ATIN)
• Preparer tax identification number (PTIN)
Offboarding
Voluntary resignation
When an employee’s employment is terminated for whatever reason, the employer must pay the employee the total vacation leave he/she has accrued, even if it involves less than one (1) years’ worth of accrual of the benefit. Also, if an employee terminates his/her employment, the employers shall notify the Court or ASUME the employee’s last known address, and the name, address of the new employer, if known, within thirty (30) days following the date of the employee’s termination. The employer must also procure an account statement certificate from ASUME and withhold from the employee’s liquidation any outstanding amounts for child support or repayment plan in excess of a month.
Contract termination
The employment contract will end in the following cases:
• Mutual agreement
• Resignation or dismissal of the employee
• Death of the employee or permanent disability
• Expiration of the agreed term in the contract
• Retirement
• The causes consigned in the contract
• Breach of conduct’s rules
• Change of employer, unless there is an agreement between the parties or in the law
Justified Dismissal
The employer must have the reason for the cause of dismissal, in the following cases:
• That the employee continues in a pattern of improper conduct or
messy
• The attitude of the employee of not performing their work properly
efficiently or to do so late and negligently or in violation of the quality standards of the product that is produced or handled by the
establishment
• Repeated violation by the employee of the rules and reasonable regulations established for the operation of the establishment
• Total/temporary or partial closure of the operations of the establishment
• Technological changes or reorganization/ or the nature of the product that is produced or handled by the establishment and changes in the services rendered to the public
• Reductions in employment that are made necessary due to a reduction in the volume of production/sales or profits/anticipated or that prevail at the time of the layoff
Unjustified Dismissal
If it is determined that there is no just cause, the discharged employee is entitled to an indemnification under Act No. 80 known as the “mesada.” This payment provides an exclusive remedy for an employee claiming unjust dismissal.
• An amount equivalent to three (3) months’ salary as severance pay, provided that the applicable probationary period as provided in this Act, or the different probationary period stipulated by the parties, has been completed.
• An amount equivalent to two (2) weeks’ salary for each full year of service. In no case shall the compensation required under this Act exceed the salary corresponding to nine (9) months’ salary. The nine (9) month cap shall not apply to employees hired prior to the effective date of the “Labor Transformation and Flexibility Act.
Every employee hired without time determined who was dismissed from his position without having mediated a just cause will have the right to receive from his/her employer in addition to the salary
would have accrued:
3 months if the dismiss occurs between 0 – 15 years of service, plus 2 weeks for each year of service
6 months if the dismiss occurs after 15 years of service, plus 3 weeks for each year of service
This action to claim unjustified dismissal, after the Labor Reform, has a term to be filed of 1 year from the date of dismissal and must be filed with the Department of Labor and Human Resources.
The statute of limitations for these claims prior to the passage of the Labor Reform was 3 years. This law does not preclude other claims related to the dismissal, such as, for example, discrimination in any of its aspects.
Minimum Notice Period
Notice periods are not mandatory in the law. It could be specified in the contract.
Immigration
Visa process
Fill the applicant form.
Visa documents
In general, the following documents are required:
• Passport(s) valid for six months beyond the intended date of entry into the United States, unless longer validity is specifically requested by the U.S. Embassy/Consulate in your country. Please review the instructions for guidance.
• Form DS-260, Immigrant Visa and Alien Registration Application.
• Two (2) 2×2 photographs.
• Civil Documents for the applicant. See Documents the Applicant Must Submit for more specific information about documentation requirements, including information on which documents may need to be translated. The consular officer may ask for more information during your visa interview. Bring your original civil documents (or certified copies) such as birth and marriage certificates, as well as legible photocopies of the original civil documents, and any required translations to your immigrant visa interview. Original documents and translations can then be returned to you.
• Financial Support – At your immigrant visa interview, you must demonstrate to the consular officer that you are not likely to become a public charge in the United States. (NOTE: For applicants where a U.S. citizen or lawful permanent resident (LPR) relative filed the Form I-140 petition or where such a relative has a significant ownership interest in the entity that filed the petition, that relative must complete Form I-864, Affidavit of Support Under Section 213A of the Act, on behalf of the applicant.)
• Completed Medical Examination Forms – These are provided by the panel physician after you have completed your medical examination and vaccinations.
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