SCMP Breaking News - Labor & Employment
Year 9, Vol. 2 - January 31, 2024
On January 17, 2024, the Governor of Puerto Rico, Hon. Pedro Pierluisi Urrutia, signed and adopted the “Law to Facilitate the Implementation of Remote Work in Private Enterprise and to Encourage the Establishment of Air Bases in Puerto Rico” (the “Remote Work Law”). This new law seeks to encourage non-local business and employers without a presence in Puerto Rico to consider the island as the ideal place to work remotely, either temporarily or permanently.
Who does the Remote Work Law apply to?
The Remote Work Law, which went immediately into effect, applies to all employees classified as executives, administrators, or professionals under the Fair Labor Standards Act (“FLSA”) and the Regulation of the Puerto Rico Department of Labor, who perform work remotely in Puerto Rico.
How is “Employer” defined under this Law?
Under the Remote Work Law, the term “Employer” is defined as all employers who do not conduct business in Puerto Rico. Specifically, this Law defines “Employers” as all Employers “not dedicated to industries or businesses [in Puerto Rico] or to the business of sales or taxable items as defined under the Puerto Rico Revenue Code from 2011, as amended and other applicable tax laws in Puerto Rico.”
How does the Remote Work Law Apply to Employees in Puerto Rico?
Under the Remote Work Law, Employers of “Domiciled Employees” (i.e., employees who physically and indefinitely reside in Puerto Rico), are exempt from complying with all local labor laws, including benefits, obligations, and any other provisions applicable to employment relationships in Puerto Rico. The Law states that the employment relationship between Employers and Domiciled Employees, as defined under the law, shall be governed solely by the terms of the employment contract.
Furthermore, applicability of Law No. 45-1935 (Puerto Rico State Insurance Fund), Law 139-1968 (Temporary disability Insurance) and Law No. 428-1950 (Chauffer’s Insurance) will depend on whether the Employer provides the employee with insurance for occupational, non-occupational or chauffer injuries that provide coverage equal to or greater than that established under such laws. However, the Employer must comply with Law No. 74-1956 (unemployment insurance), unless the employee can apply for unemployment benefits in another jurisdiction.
Importantly, should a “Non-domiciled Employee” (employee residing outside of Puerto Rico) become a “Domiciled Employee” with the employer’s consent, the provisions regarding Domiciled Employees (discussed above) would automatically apply to the employment relationship.
SCMP will keep you updated as to any developments regarding this very important and crucial matter for employers in Puerto Rico.
Should you require further advice or assistance in relation to this matter, please contact us at (787) 945-0380.
Because of the general nature of this newsletter, nothing herein should be construed as legal advice or a legal opinion. SCMP Breaking News and all its content is property of Silva-Cofresí, Manzano & Padró, LLC
#remoteworklaw #workingremotelyPR
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