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Puerto Rico DOL Announces that Employers Must Submit Unemployment Tax Returns Electronically

On March 14, 2019, the Puerto Rico Department of Labor and Human Resources (PR DOL) issued a press release announcing that in an effort to improve services and reduce public expenses, all employers will be required to submit their unemployment tax returns electronically starting April 1, 2019.

Puerto Rico Treasury Extends Deadlines to Request Federal Employee Retention Benefit After Hurricanes Irma And María

The Puerto Rico Department of the Treasury (“PR Treasury”) has issued Internal Revenue Informative Bulletin No. 19-01, extending until March 31, 2019 the deadline to request the Federal Employee Retention Benefit (“Benefit”) related to Hurricanes Irma and Maria. Consequently, the deadline to submit a Benefit claim (for those employers who have requested the Benefit and have not yet received it) has also been extended until April 30, 2019.

Puerto Rico Department of the Treasury Announces 2019 Limits on Qualified Retirement Plans

On December 31, 2018, the Puerto Rico Department of the Treasury (PR Treasury) issued Internal Revenue Informative Bulletin No. 18-24 (IB 18-24) announcing the 2019 applicable limits for Puerto Rico qualified retirement plans. Pursuant to Section 1081.01(h) of the Puerto Rico Internal Revenue Code of 2011, as amended (PR Code), the Secretary of the Treasury is required, before the beginning of each taxable year, to provide notice of the applicable limits under Section 401(a) of the Internal Revenue Code of 1986, as amended (US Code), which are incorporated by reference into the PR Code limits (e.g., annual compensation, annual benefit/contribution limits), once the Internal Revenue Service (IRS) publishes the retirement plan limits under the US Code.

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