| Update Applicable to: | Effective date |
| All employers who have at least 1 remote worker in Puerto Rico | See Details Below |
What happened?
On September 10, 2024, the Puerto Rico Secretary of Labor issued an Opinion (No. 2024-02) to clarify and provide additional information about the application of Act No. 27-2024, known as the “Act to Facilitate the Implementation of Remote Work in the Private Sector and to Incentivize the Establishment of Airline Bases in Puerto Rico.”
Quick Summary:
Act No. 27-2024 exempts certain remote employees in Puerto Rico from local employment laws. Domiciled employees follow employment agreements and local unemployment insurance rules. Non-domiciled employees’ employers are exempt from Puerto Rican laws.
What are the details?
- Act No. 27-2024 exempts from certain employment law coverage domiciled and non-domiciled employees working remotely from Puerto Rico for out-of-state employers with no business nexus to Puerto Rico.
- Remote Employees Domiciled in Puerto Rico: employment agreements govern remote work for exempt employees in Puerto Rico if they meet specific conditions. These relationships are mostly excluded from Puerto Rican laws. Employers must follow Puerto Rico’s unemployment insurance rules unless the employee can claim benefits elsewhere.
- Remote Employees Not Domiciled in Puerto Rico: If a remote employee relocates to Puerto Rico on a non-domiciled basis, the employer is exempt from Puerto Rican employment laws. The employment agreement or the laws of the employee’s original domicile will apply. If the employee becomes domiciled and is exempt, Act No. 27-2024 applies. Non-exempt employees who become domiciled will follow Puerto Rican laws.
- For a breakdown of Puerto Rico Act No. 27 – 2024 click here
Business Considerations
- Employers should ensure that employment agreements are in place for remote employees domiciled in Puerto Rico, especially for exempt employees.
- Employers should verify that remote employees meet the conditions outlined in Act No. 27-2024 to benefit from the exemptions.
Source References
- Puerto Rico Secretary of Labor Clarifies the Application of Act No. 27-2024 (Littler Mendelson P.C.)
- What Puerto Rico Labor Secretary’s New Overtime Interpretation Means for Employers (Jackson Lewis P.C.)
- Puerto Rico Act 24 – 2024
Resources
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