Our Expertise
Managing a global workforce in Puerto Rico
It's crucial to navigate the specifics of Puerto Rican employment regulations, which, while similar to US laws, have distinct differences. Companies can benefit from local expertise in navigating these nuances, ensuring they remain compliant with regulations like the Puerto Rico Internal Revenue Code. Outsourcing EOR, payroll and HR services to a knowledgeable partner like TopSource Worldwide can provide invaluable support, ensuring efficient and compliant operations while allowing businesses to focus on their core activities.
Extensive expertise
Our team of experienced, knowledgeable staff collectively provide up-to-date employment information across 180 countries, so you can always get accurate advice.
Entity-free employment
Feel free to hire employees from all over the world without being weighed down by setting up entities, running complex payroll or recruiting a hiring team.
Payroll without hassle
Have the confidence that your staff will always be paid accurately and on time, so that you can focus on your core business activities and work towards your success.
Always-on support
Access helpful, relevant, personalised advice whenever you need it, along with expert-led recruitment policies and tried-and-tested HR best practices.
"With TopSource we were able to have employees hired or maintained in Nutreco without having to establish an entity in these countries for only 1-2 employees. I think most countries are covered by TopSource, so they can help us with almost all cases. Good advice on conditions and direct contact with employees. Invoicing done directly to the company. An easy process compared to hiring employees by ourselves."
Annette van Duijnhoven
”We searched the market for a local payroll vendor in 2014 and we chose TopSource as our partner. We were looking for error-free and timely payroll processing and TopSource Worldwide delivers this, saving us time and money. We have worked together for 8 years now and would recommend them to anyone."
Praveen Lihinar
Personalised Employer of Record services in Puerto Rico
TopSource Worldwide offers personalised Employer of Record (EOR) services tailored to meet the specific needs of your business in Puerto Rico. This includes handling employee onboarding, payroll processing, tax compliance, employee benefits management, and HR support. Our EOR services ensure that your business meets all legal and regulatory requirements, providing a hassle-free solution to manage your Puerto Rico-based employees.
End-to-end Puerto Rico payroll services
Looking to expand into Puerto Rico? Our unparalleled expertise in global payroll services ensures that your business can seamlessly navigate the complexities of payroll on a global scale, supporting your Puerto Rico expansion initiatives.
Global entity management
Venturing into the Puerto Rican market can be both exciting and challenging. With distinct business regulations, cultural nuances, and economic landscapes, it's essential to have a clear roadmap for your business establishment journey.
Accounting
Whether your goal is to process your purchase-to-pay transactions with minimum errors or manage your expense claim procedure, our team of experts can handle your accounting responsibilities, allowing you to focus on your core business and save time and money.
Global EOR services
Managing a diverse global workforce can be complex. This is where TopSource steps in as an invaluable employer of record services partner for companies seeking to expand their global reach while ensuring compliance with local employment laws and regulations.
Global Expansion Simplified
How to do business in Puerto Rico
Entering the Puerto Rican market presents a mix of excitement and challenges. Given unique business regulations, cultural intricacies, and economic dynamics, a well-defined roadmap is crucial for a successful business establishment.
TopSource Worldwide is with you at every stage. Whether it's navigating local regulations or facilitating seamless operational transitions, our expertise ensures a swift and efficient process for establishing your business in Puerto Rico.
Puerto Rico Insights
Key insights into Puerto Rico's landscape
VAT rates: Puerto Rico doesn't have a Value Added Tax (VAT); however, it imposes a Sales and Use Tax (IVU) of 11.5%.
Ease of Doing Business rank: Being a part of the United States, Puerto Rico is not ranked separately in the World Bank's Ease of Doing Business Index.
Consumer Confidence Index: Specific data for Puerto Rico's Consumer Confidence Index may not be readily available, as it is often integrated into broader US metrics.
Employee maternity/paternity leave: Maternity and paternity leave policies in Puerto Rico align with US federal regulations, offering eligible employees up to 12 weeks of unpaid leave.
Employee termination period: Termination notice periods in Puerto Rico may vary but typically align with US employment laws and individual employment contracts.
Employee salary pay date: Wages are usually paid bi-weekly or semi-monthly, following common US payroll practices.
Bank holidays: Puerto Rico observes US federal holidays, including New Year's Day, Independence Day, and Christmas, with a total of 11 public holidays in a year.
Contractual Provisions
The contract can be executed electronically and should be provided in a language that the employee understands and has sufficient knowledge of in order to understand the documentation.
Medical examinations and drug testing are not a statutory requirement in Puerto Rico; however, it’s customary practice for private companies to establish these procedures as part of their onboarding process.
For onboarding, Puerto Rico requires employers to establish certain mandatory policies:
- Domestic violence protocol
- Unpaid leave and reasonable accommodation for victims of abuse
- Substance abuse policy (required if the employer will be conducting drug tests)
- Video surveillance (required if the facilities will have video surveillance in the workplace)
Pursuant to Act No. 80 of 30 May, 1976, terminations from employment must be with just cause and, usually, by following a progressive discipline process.
Pursuant to Puerto Rico’s Special Child Support Act, every employer who hires or rehires a person must provide the following information to the Child Support Administration: employee’s name, address and social security number and employer’s federal employer identification number. The forms may be sent by mail or by magnetic or electronic media. The form may also be submitted through the Puerto Rico Department of Labor.
Employers are required to report this information no later than 20 days after the date on which the employer hires or rehires the person — or twice per month with a lapse of no less than 12 days or more than 16 days between transmissions if the information is submitted electronically or magnetically.
New hires are also required to complete the Department of Homeland Security U.S. Citizenship and Immigration Services Form I-9, Employment Eligibility Verification, as well as a Puerto Rico Department of Treasury Form 499 R-4.1, Withholding Exemption Certificate.
An automatic probationary period applies to all employees in Puerto Rico unless a shorter period is agreed by the employer and employee.
- Exempt employees: 360 days
- Non-exempt employees: 270 days
This, however, is not applicable to employees on a temporary contract, hired through an employment agency.
No extensions are permissible should the performance be unsatisfactory. The probationary period is automatically extended by the employee taking statutory leave of absence and continues for the remaining period once the employee returns to work.
There are no statutory periods of termination during the probationary period.
There’s no minimum or maximum statutory requirement for the number of working hours.
It’s customary to give a one-hour unpaid meal break to all employees.
Non-exempt employees are required by federal law to take a one-hour meal break when scheduled to work for more than five consecutive hours and longer than six hours.
Exempt employees are not entitled to overtime pay.
Non-exempt employees are entitled to overtime pay under the following circumstances:
- Employers are required to pay for all overtime hours worked in excess of 40 during any week at 1.5 times the regular rate of pay.
- Employers must also pay daily overtime (excess of eight hours in a calendar day) at 1.5 times the regular rate of pay.
- Employers are also required to pay for work performed on an employee’s day of rest at 1.5 times their regular rate of pay.
The day of rest, also known as the seventh day, is a calendar period of 24 consecutive hours during which no work should be performed if any work has been carried out during all of the previous six calendar days. The day of rest need not fall on any particular calendar day.
Statutory Insurances
Unemployment insurance is mandatory at state and federal level. Employers are entitled to contribute a maximum of 5.4% of annual wages to the state (SUTA) and 0.6% to the federal unemployment tax (FUTA).
The Puerto Rico Compensation System for Work-Related Accidents Act provides certain economic benefits and job reinstatement rights to employees who become temporarily disabled due to work-related illness or injury.
Employers are required to pay mandatory premiums of 1% of the employee’s salary to a public corporation known as the State Insurance Fund Corporation (SIFC), based on the total amount of salaries paid and the types of risks involved.
In addition to economic benefits, the SIFC also provides the medical and rehabilitation services that ill and or injured employees may need. This government system may not be substituted with private coverage. In exchange for payment of the mandatory premiums, employers are generally granted immunity from any civil action and damages resulting from employee work-related accidents.
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