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Puerto Rico Adopts New Regulation to Administer Unemployment Insurance

On November 8, 2018, the Secretary of the Puerto Rico Department of Labor and Human Resources published a new regulation governing the administration of Puerto Rico's unemployment insurance program. The Regulation to Administer the Unemployment Insurance Program (“Regulation”), which implements Puerto Rico’s Employment Security Act and supersedes three previous regulations,1 will take effect on December 8, 2018. Among other provisions, the Regulation reflects changes in weekly benefit amounts, revises partial payment plan requirements, and extends the time in which an employer can appeal a tax deficiency determination.

Puerto Rico Revises Form for Reporting Payments to Terminated Employees, Considers Credit History Ban

The Puerto Rico Department of the Treasury has announced changes to tax reporting for certain severance payments.

Puerto Rico Treasury Department Changes Tax Reporting on Act 80 Payments Made During Tax Year 2018

On October 22, 2018, the Puerto Rico Department of the Treasury (the “PR Treasury”) issued Publication 18-03, which makes tax reporting and tax deadline changes for certain severance payments.

Puerto Rico Treasury Department Extends Period to Make Hurricane-Related Retirement Plan Distributions

Last year, the Puerto Rico Department of the Treasury (the “PR Treasury”) issued Administrative Determination Number 17-29 (“AD 17-29”) to provide rules and procedures for allowing distributions from an IRA or a Puerto Rico qualified retirement savings plan following Hurricane María. The purpose of these relaxed tax rules is to temporarily allow Puerto Rico residents impacted by the hurricane to make distributions from qualified retirement plans and IRAs at a preferential tax rate. The PR Treasury subsequently issued Administrative Determination Number 18-02 on January 17, 2018, to clarify certain provisions of AD 17-29.

Puerto Rico Governor Signs Executive Order Increasing Minimum Wage for Construction Workers in Government-Funded Construction Projects

On July 30, 2018, the governor of Puerto Rico signed Executive Order No. 2018-033, increasing the minimum wage for construction workers, enforcing laws requiring use of locally produced cement, and requiring the use of project labor agreements in government-funded construction projects. More specifically, the Executive Order requires that if any construction project is financed in whole or in part with funds from the Puerto Rico Government, its agencies, instrumentalities or public corporations, the contractor or subcontractor must pay employees hired to work on that project at least $15.00 per hour.

Puerto Rico Law Authorizes Pay Deductions as Repayment for Employer-Provided Emergency Aid

Puerto Rico is still reeling from the aftermath of Hurricane Maria. Recently, the governor of Puerto Rico signed into law Act No. 115 of June 20, 2018, to promote recovery efforts and provide much-needed aid to affected non-exempt employees in situations of emergency. Ordinarily, Puerto Rico law does not allow deductions from a non-exempt employee’s salary, except for specific purposes defined in Act No. 17 of April 17, 1931, as amended. Act No. 115 amends Article 5 of Act No. 17 to lengthen the list of authorized payroll deductions. Consequently, employers in Puerto Rico are now able to prospectively recoup, via salary deductions, any loan, salary advance, or the cost of any equipment, materials, or goods provided to their non-exempt employees to help them in situations where there has been an emergency declaration by the president of the United States, the Federal Emergency Management Agency (FEMA), or the governor of Puerto Rico.

Littler Global Guide - Puerto Rico - Q2 2018

Guidance on the Federal Employee Retention Benefit for Certain Employers Affected by Hurricane Irma and María

Puerto Rico: New Act Extends the List of Authorized Deductions to Non-Exempt Employees' Wages

The Governor of Puerto Rico recently signed into law Act No. 115, extending the list of authorized payroll deductions under Act 17-1931 (“Act 17”). As a general rule, deductions from non-exempt employees’ wages in Puerto Rico are prohibited unless specifically authorized by Article 5 of Act 17.

Puerto Rico Department of the Treasury Issues Guidance on the Federal Employee Retention Benefit for Certain Employers Affected by Hurricanes Irma and Maria

On September 29, 2018, the Disaster Tax Relief and Airport Extension Act of 2017, as amended (the “Act”), was adopted to, among other goals, provide tax relief to those affected by Hurricanes Irma and Maria. The Act includes an employee retention benefit (the “Benefit”) available to eligible employers.

Employment-at-Will Comes to Puerto Rico?

Puerto Rico’s Financial Oversight and Management Board and Governor Ricardo Rosselló have sent bills to the Puerto Rico legislature to repeal the Unjust Dismissal Act, Act No. 80 of May 30, 1976 (Act 80). If either bill is enacted, employers in Puerto Rico will no longer be required to have “just cause” to dismiss employees hired for an indefinite term.