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We serve as your Employer of Record in Puerto Rico. Although international expansions are never easy, they provide companies with an opportunity to diversify operations, grow revenue, and form strategic partnerships. Partnering with an Employer of Record in Puerto Rico is cost-effective and time-saving, and can make the entry to new markets entry more seamless.
An Employer of Record (EOR) service eliminates the need for establishing a branch office or subsidiary in Puerto Rico in order to hire or launch operations. Instead, your Employer of Record partner hires workers on your behalf and assumes full legal responsibility for your operations in the country.
Partnering with an Employer of Record in Puerto Rico allows you to outsource daily administrative and legal responsibilities, focus on core business activities, and channel valuable time and resources toward your growth in the country. Hence, an Employer of Record partner handles the following administrative burdens for you:
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Incorporating a company in Puerto Rico can be time-consuming and complex, involving several lengthy legal procedures and administrative tasks. As a result, company incorporation in Puerto Rico is not ideal when you must enter the market quickly or manage setup costs.
In contrast, Employer of Record services allow you to start operations in Puerto Rico within days. With an agreement in place, you can quickly start hiring or dispatching workers in Puerto Rico. Your employees will complete their daily assignments while you supervise and manage their contributions.
Many companies now prefer Employer of Record services since they:
The Advantage in Figures
PEO/EOR
Company Incorporation
Price
80% Less Expensive
Market Entry
2-5 Days
6 Months
Assured Legal Compliance
New market entry can be challenging due to unfamiliarity with foreign labor laws. However, partnering with an Employer of Record in Puerto Rico helps to avoid legal disputes due to employee claims or noncompliance with tax or regulatory laws.
Broad Coverage
An Employer of Record partner with a global presence like INS Global can help to manage all your combined expansion needs in Puerto Rico and over 100 other countries.
A Multifunctional Platform
An Employer of Record service covers every HR-related service through one contact point, using an intuitive human-supported online platform.
Reduced Cost And Time
An Employer of Record in Puerto Rico streamlines your expansion plans by eliminating the need to establish your own entity. This strategy helps you save time and cost.
Focus On Company Growth
You can focus on business strategies that help you pivot while your Puerto Rico Employer of Record partner shoulders the administrative burdens of everyday operations.
You can partner with an Employer of Record agreement in Puerto Rico in 4 easy steps:
1
First, we meet to discuss your outsourcing and employment needs so we can devise a unique plan specifically for you.
2
Next, we provide a legal entity for hiring in Puerto Rico so you can recruit or dispatch workers without needing a new local structure.
3
We immediately handle liability for HR administration and legal compliance with tax and labor law in Puerto Rico as it relates to your operations.
4
You can focus on managing your employee’s daily contributions while we handle administrative tasks.
Professional Employer Organization (PEO) and Employer of Record (EOR) services are similar but have some particularities.
A Puerto Rico PEO enters a co-employment relationship with your company. In contrast, an Employer of Record has a direct employment relationship with your employees on your behalf.
Consequently, the PEO in Puerto Rico is jointly responsible for compliance with labor and tax laws and shares certain employment-related risks. In contrast, the Employer of Record takes charge of employment-related risks and liabilities and is fully liable for compliance with tax and labor laws.
Check Our Labor Law Guide
In Puerto Rico, employment contracts are required in some form to help establish employment terms and conditions. Employers should write these contracts in Spanish—the official language of Puerto Rico. The country recognizes both written and verbal agreements, but written employment contracts ensure clarity and help avoid future misunderstandings.
Employers in Puerto Rico can establish a probationary period to evaluate an employee’s suitability for a position. The maximum probation period allowed is 9 months, or 12 months for executives or administrators.
Puerto Rican employers pay salaries in the United States dollar (USD) biweekly, weekly, or monthly. The labor law in Puerto Rico mandates severance payments for employees hired indefinitely but dismissed without a just cause. The method for these payments is as follows:
Working Hours in Puerto Rico
The statutory working hours are 8 hours a day and 40 hours a week. Overtime pay is 1.5 times the regular pay rate for every hour worked beyond 8 hours daily.
The Fair Labor Standards Act sets and regulates labor and wage laws in Puerto Rico. The current minimum wage is set to $8.50/hour and applies across the board with exceptions to tipped employees and some student workers or occupations.
Under the Christmas Bonus Act, employers are required to pay their staff a minimum yearly bonus of 6% of their salary or $600. This rate is lowered to 3% or $300 for companies with more than 15 staff.
Public Holidays in Puerto Rico
Employees in Puerto Rico are eligible for paid leave on the country’s 13 nationally recognized public holidays:
Annual Leave in Puerto Rico
Puerto Rican employees are entitled to paid 15 days‘ annual leave in a year. This leave is accrued at the rate of 1.25 days for each month for employees that have worked for a minimum of 115 hours in a month.
Sick Leave in Puerto Rico
Employees in Puerto Rico are entitled to 12 days of paid sick leave in a year, accrued at 1 day each month for employees who have worked a minimum of 115 hours in a month.
The Family and Medical Leave Act of 1993 requires employers with 50 or more employees to provide workers with a maximum of 12 weeks’ unpaid leave in a 12-month period.
Employees who have worked with their employer for at least 12 months and have performed work for 1,250 hours or more can request this as a medical leave when the employee is unable to work due to a serious health condition or they’re required to look after a spouse, son, daughter or parent with a serious health condition.
Maternity/Paternity Leave in Puerto Rico
Female employees are entitled to 8 weeks of maternity leave but are required to provide a medical certificate indicating pregnancy and the expected date of birth.
The Federal Insurance Contributions Act (FICA) and Federal Unemployment Tax Act (FUTA) impose some employer taxes in Puerto Rico. FICA taxes finance the Social Security and Medicare systems.
The current tax rate for Social Security is 6.2% (of the employee’s salary) from both the employer and employee. The Medicare rate is 1.45% (of the employee’s salary) from both the employer and employee.
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faqs
What advantages can you anticipate if you employ a Puerto Rican Employer of Record to look after the needs of your local employees?
The following visa types exist for employees in Puerto Rico:
In Puerto Rico, employers are responsible for organizing and withholding employee taxes like Social Security and Medicare contributions. The Social Security contribution is 6.2% (of employee’s salary) each for employer and employee. Meanwhile, Medicare is 1.45% (of employee’s salary) each for employer and employee.
Employees in Puerto Rico are entitled to a state pension, Christmas bonus, public holidays, paid leave (sick leave, annual leave, and parental leave), as well as health insurance.
Unilateral changes to an employee‘s contract are not permitted in Puerto Rico. Changes to an employee‘s working conditions must be agreed upon and signed by both parties.
Puerto Rico also has its own public health insurance programs that cover eligible residents. Government-funded programs such as the Government Health Plan (Mi Salud), provide health insurance coverage to low-income individuals and families who meet income and eligibility criteria.
Also, the Medicaid (Medicaid de Puerto Rico) program provides healthcare coverage to certain low-income individuals, pregnant women, children, and disabled individuals.
In addition, Puerto Rico is part of the U.S. Medicare program that provides healthcare coverage for elderly and disabled individuals. Medicare beneficiaries in Puerto Rico can access the same benefits and services as those in the United States.
The labor law in Puerto Rico mandates severance payment for employees hired indefinitely but dismissed without a just cause as follows:
A Global Employer of Record is an effective solutions for companies like yours that are looking to expand a workforce abroad effortlessly.
This approach allows you to outsource the international hiring process quickly and efficiency, providing access to a global talent pool while still managing payroll compliance in each country.
Public Holidays Calendar
Puerto Rico
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| Date | Day | Holiday | Notes |
| January 1 | Wednesday | New Year’s Day | |
| January 6 | Monday | Epiphany (Día de Reyes) | |
| January 20 | Monday | Martin Luther King Jr. Day | |
| February 17 | Monday | Presidents’ Day | |
| March 2 | Sunday | American Citizenship Day | Marks the day Puerto Ricans became U.S. citizens in 1917. |
| March 3 | Monday | American Citizenship Day (observed) | Observed because March 2 falls on a Sunday. |
| March 22 | Saturday | Emancipation Day | |
| April 16 | Wednesday | José de Diego’s Birthday | |
| April 18 | Friday | Good Friday | |
| May 26 | Monday | Memorial Day |
Download the PDF Guide