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Employer of Record Puerto Rico
Hire staff and expand your business in Puerto Rico with our fully-managed EOR Service
How we can help
Unrivalled Employer of Record Service in Puerto Rico designed to expand your business seamlessly
Agility EOR delivers services for business’s looking for an Employer of Record in Puerto Rico. We help clients hire new employees or transfer existing employees into a fully-managed EOR service.
We appreciate that each situation and business is different. That is why our personal approach to Employer of Record Services in Puerto Rico takes care of all HR, payroll, recruitment and compliance head aches, and allows you to do what you love best – driving your business forward.
Employer of Record in Puerto Rico
A Brief Guide to Puerto Rico
Puerto Rico is a captivating island territory located in the northeastern Caribbean Sea. With a rich blend of cultural influences from its indigenous Taíno roots, Spanish colonization, and American governance, Puerto Rico boasts a vibrant heritage and a distinct identity. This enchanting island, often referred to as the “Island of Enchantment,” offers a mesmerizing tapestry of natural wonders, including breathtaking beaches, lush rainforests, and majestic mountains. From its colorful colonial architecture and mouthwatering cuisine to its lively music and warm-hearted people, Puerto Rico entices visitors with its unique blend of history, beauty, and hospitality.
Category | Information |
Location | Caribbean |
Capital City | San Juan |
Official Languages | Spanish, English |
Area | 9,104 square kilometers |
Population | Approx. 3.2 million |
Currency | US Dollar (USD) |
Major Cities | Bayamon, Carolina, Ponce |
GDP | $101.13 billion |
Major Industries | Pharmaceuticals, electronics, apparel, food products, tourism |
Business Culture
Business Culture in Puerto Rico
While doing business in Puerto Rico, it’s essential to embrace a personalized approach. Building relationships and networking are critical to business success, and you’ll often see business meetings begin with friendly chatter before shifting to the matter at hand. Patience and flexibility also play a role since punctuality isn’t always strictly observed. It’s the warmth and connection that counts.
Spanish is the preferred language for business dealings, but English is also widely understood. The business dress code, although elegant, leans towards the conservative side, with suit and tie for men and suits or dresses for women.
Payroll and Taxes
Payroll and Taxes in Puerto Rico
13th month salary payments are mandatory in Puerto Rico, with these payments usually taking the form of a Christmas bonus. The amount payable varies depending on when the employee was hired, how many hours they have worked, and the size of the company.
Employee Taxation
In Puerto Rico, income tax rates are progressive, with higher income levels subject to higher tax rates.
Gross Annual Salary | Tax Rate (%) |
Up to $9,000 | 0% |
$9,000 – $25,000 | 7% |
$25,000 – $41,500 | 14% |
$41,500 – $61,500 | 25% |
Over $61,500 | 33% |
Employer Taxation
Employers in Puerto Rico are also responsible for various employer costs, which may include:
Fund Type | Contribution (%) |
Social Security (part of FICA) | 6.2% (taxable salary capped at $128,400) |
Medicare (part of FICA) | 1.5% (taxable salary capped at $200,000) |
State Unemployment (SUTA) | 1.4% – 5.4% (taxable salary capped at $7,000) |
Federal Unemployment (FUTA) | 0.6% – 6% (credit for SUTA is granted, taxable salary capped at $7,000) |
Disability Insurance | 0.3% (taxable salary capped at $9,000) |
In addition to this, the Workmen’s Accident Compensation Insurance Act (WACA) obliges employers to provide occupational accident insurance cover for their employees.
Pension and Healthcare
Puerto Rico Pensions
The retirement landscape in Puerto Rico is closely tied to the United States’ Social Security system, administered by the US Social Security Administration. The funding comes from payroll taxes on earnings, shared by employees and employers, as well as self-employed individuals. Employers also offer private pension plans, including defined contribution plans, and are encouraged by tax incentives. Nonetheless, the future of pension provisions has been a topic of discussion due to the economic challenges the country faces.
Healthcare in Puerto Rico
In Puerto Rico, healthcare is a blend of both public and private systems. The government-funded Medicaid program, ‘Mi Salud’, provides healthcare for low-income residents. However, many Puerto Ricans opt for private health insurance, which gives them access to a broader range of services and less wait time.
The healthcare system is administered by the Department of Health and includes hospitals, clinics, and primary care centers throughout the country. Accessibility is generally good in urban areas, though in rural regions, it can be more challenging.
As for quality, Puerto Rico boasts highly trained healthcare professionals and modern medical facilities, especially in the metropolitan areas. The country is known for its expertise in various specialties, such as cardiology and neurology, and it’s a significant hub for pharmaceutical manufacturing. However, like many healthcare systems, it has its challenges, including funding issues and a high demand for services.
Employment Law
Employment Law in Puerto Rico
Relevant Legislation: The Fair Labor Standards Act (FLSA) and Puerto Rico’s Labor Transformation and Flexibility Act (Act No. 4 of 2017) are the principal laws that regulate employment in Puerto Rico.
Employment Contracts: While there is no legal requirement for employment contracts to be written in Puerto Rico, having a contract is recommended to avoid disputes and misunderstandings. These agreements can be for a specific period or at-will and typically outline the terms and conditions of employment.
Working Hours: A standard work week in Puerto Rico consists of 40 hours, typically spread over five days. Any hours worked over these 40 hours are considered overtime.
Leave: Employees in Puerto Rico are entitled to 12 sick days and 15 vacation days per year. Pregnant employees also have the right to 4 weeks of maternity leave before giving birth and 4 weeks after.
Overtime: Work exceeding 40 hours in a week is considered overtime. This work is compensated at a rate of one and a half times the regular rate of pay. There are exceptions for agricultural, retail, and seasonal employment.
Termination: An employer may terminate an employee for just cause, which includes serious misconduct, repetitive violations, and criminal offenses. The employer must follow a disciplinary process, which includes written warnings and the opportunity to improve.
Notice: There is no mandatory notice period for terminating an employee in Puerto Rico. However, if an employer provides a notice, it is usually two weeks.
Severance Pay: There is no statutory obligation to pay severance in Puerto Rico. However, severance payments may be stipulated in the employment contract or collective bargaining agreement.
IMMIGRATION
Work Permits in Puerto Rico
The United States Citizenship and Immigration Services (USCIS) oversees the immigration system in Puerto Rico, given its status as a U.S. territory. It shares the same immigration laws with mainland United States, and the common work visas include:
- H-1B Visa: This is for specialty occupations requiring a higher level of education and certain distinguished fashion models. The job must meet certain criteria, including being so specialized and complex that the knowledge required to perform the duties is usually associated with the attainment of a bachelor’s or higher degree.
- L-1 Visa: This visa allows companies operating both in the U.S. and abroad to transfer certain employees from its foreign operations to the U.S. operations for up to seven years. The employees being transferred must be at the managerial or executive level, or have specialized knowledge.
- E-1 Treaty Traders Visa: This is for nationals of a country with which the United States maintains a treaty of commerce and navigation, and who are coming to the U.S. to carry on substantial trade, principally between the U.S. and the treaty country. The trade may be in goods, services, international banking, insurance, transportation, tourism, technology and its transfer, and some news-gathering activities.
- E-2 Treaty Investors Visa: This is for nationals of a country with which the United States maintains a treaty of commerce and navigation, and who have invested, or are in the process of investing a substantial amount of capital in a bona fide enterprise in the United States.
Public Holidays
Puerto Rico Public Holidays
Holiday | Date |
New Year’s Day | January 1 |
Birthday of Martin Luther King, Jr. | Third Monday in January |
Birthday of Luis Muñoz Marín | February 18 |
Emancipation Day | March 22 |
Good Friday | Variable, between March 20 and April 23 |
Birthday of José de Diego | April 16 |
Memorial Day | Last Monday in May |
Independence Day | July 4 |
Constitution Day | July 25 |
Birthday of Dr. José Celso Barbosa | July 27 |
Labor Day | First Monday in September |
Discovery of Puerto Rico Day | November 19 |
Thanksgiving Day | Fourth Thursday in November |
Christmas Day | December 25 |
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The Benefits
Puerto Rico Employer of Record Benefits
When you choose Agility EOR to expand in Puerto Rico, we guarantee an Employer of Record Service tailored to the needs of your business
Compliance
We are on top of regulatory changes in Puerto Rico so you can relax.
Cost reduction
Allow our economies of scale to work in your favour.
High Service Levels
You and your employees have a dedicated account manager.
Fixed Cost Pricing
We will agree our professional fees up front based on your needs - no nasty surprises!
Consolidated Invoicing & Payments
Make one monthly payment to cover all your tax, social and wages costs from one to one thousand employees.
Fast delivery
You can have 'boots on the ground' within days on our infrastructure.
Reduced Risk
All wage taxes are remitted in full to the Puerto Rican authorities by professionals ensuring liabilities are met, giving you peace of mind.
Supply Chain Transparency
We only pay employees through local full employed solutions meaning Puerto Rico payroll tax is paid on all funds.
Save Time and Money
Our expertise is at your disposal. The need for you to have internal HR, Payroll and admin staff is eliminated.