Employer of Record in Puerto Rico | Hire Without An Entity

Employer of Record in Puerto Rico

Hire Globally, Pay Locally, Expand Effortlessly

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 EOR partner hires workers on your behalf and assumes full legal responsibility for your operations in the country.  

Partnering with an EOR 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 EOR partner handles the following administrative burdens for you: 

  • Hiring and onboarding talent 
  • Ensuring tax compliance 
  • Payroll management 
  • Social security management 
  • Employee benefits and insurance administration 
  • Issuing and documenting employment contracts 
  • Ensuring compliance with labor regulations 
  • Providing business expansion support 

Employer of Record in Puerto Rico - Summary

The Advantages of Using an Employer of Record in Puerto Rico

Assured Legal Compliance

New market entry can be challenging due to unfamiliarity with foreign labor laws. However, partnering with an EOR in Puerto Rico helps to avoid legal disputes due to employee claims or noncompliance with tax or regulatory laws.  

Reduced Cost And Time

An EOR 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 EOR partner shoulders the administrative burdens of everyday operations.  

Broad Coverage

An EOR 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 EOR service covers every HR-related service through one contact point, using an intuitive human-supported online platform. 

Why Choose an EOR Over Company Incorporation?

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, EOR 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 EOR services since they: 


  • Save time and cost 
  • Help businesses comply with tax and labor regulations 
  • Employ local expertise and professional networks 


testimonial from Manuel Ramos


Manuel Ramos


Managing Director

We think INS Global is a good solution about starting in a market like China. Understanding the market doesn’t mean you need to set up a company immediately. 


How Does an Employer of Record in Puerto Rico Work?

You can partner with an Employer of Record agreement in Puerto Rico in 4 easy steps 

  • First, we meet to discuss your outsourcing and employment needs so we can devise a unique plan specifically for you. 
  • Next, we provide a legal entity for hiring in Puerto Rico so you can recruit or dispatch workers without needing a new local structure 
  • We immediately handle liability for HR administration and legal compliance with tax and labor law in Puerto Rico as it relates to your operations.   
  • You can focus on managing your employee’s daily contributions while we handle administrative tasks.    

What’s The Difference Between PEO And EOR?

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 EOR 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 EOR takes charge of employment-related risks and liabilities and is fully liable for compliance with tax and labor laws 

Labor Law in Puerto Rico - 2024

Employment Contracts in Puerto Rico

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: 

  • 12 weeks of salary as severance pay 
  • An additional 2 weeks of salary for each full year of service 
  • The total compensation caps at 36 weeks 

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: 

  • New Year’s Day (Día de Año Nuevo) – January 1st 
  • Three Kings’ Day (Día de Reyes) – January 6th 
  • Birthday of Luis Muñoz Marín (Natalicio de Luis Muñoz Marín) – February 18th 
  • Good Friday (Viernes Santo) – Varies (Friday before Easter Sunday) 
  • Memorial Day (Día de la Recordación) – Last Monday in May 
  • Independence Day (Día de la Independencia) – July 4th 
  • Constitution Day (Día de la Constitución) – July 25th 
  • Birthday of Dr. Martin Luther King Jr. (Natalicio de Dr. Martin Luther King Jr.) – Third Monday in January 
  • Labor Day (Día del Trabajo) – First Monday in September 
  • Columbus Day (Día de la Raza) – Second Monday in October 
  • Veterans Day (Día de los Veteranos) – November 11th 
  • Thanksgiving Day (Día de Acción de Gracias) – Fourth Thursday in November 
  • Christmas Day (Día de Navidad) – December 25th 

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.  

Tax Law in Puerto Rico

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.   


Discover More Solutions in Puerto Rico


In order to have full control and liability over all company procedures, you can incorporate a new local entity in Puerto Rico when employing or dispatching staff. However, you can also employ the services of a local Employer of Record to hire staff for you directly without going through length incorporation processes or taking on extra responsibilities. 

An Employer of Record in Puerto Rico is a legal entity in charge of the staff employed in a specific country. In practice, international companies can either open a subsidiary to become the employer of record of their employees abroad or use a PEO in Puerto Rico to act as the employer of record. 

It can take less than 1 month for foreign businesses to use an existing EOR to expand to Puerto Rico. In contrast, incorporating a new subsidiary and hiring directly in Puerto Rico can take anywhere between  4-12 months in order to safely follow all the necessary procedures. procedures, etc.

A reputable EOR services organization will assist in every necessary HR-related function from payroll to tax compliance and employment contract management, all for a single monthly fee based on a percentage of the salary of your staff. 

Yes, an Employer of Record provides a secured and legal way to hire or transfer employees in Puerto Rico, either for an extended period or during the time it takes you to set up a new business structure. 

What advantages can you anticipate if you employ a Puerto Rican EOR to look after the needs of your local employees? 

Independent contractors who interact with their clients through an EOR framework will retain full control of their work while also being eligible for regular employee benefits in Puerto Rico. Hence, partnering with an EOR is like working with an umbrella company in that it improves contractor satisfaction and improves the stability of the working relationship. 

Yes! INS Global recruitment experts have the perfect insights needed to master local employment requirements and best practices in Puerto Rico. INS Global also has access to both online and offline professional recruitment resources and networks to speed up the process. 

Yes. An Employer of Record provider can help you find workers in various cities or regions within Puerto Rico. An EOR handles headhunting, interviews, and candidate selection in specific cities or regions in Puerto Rico, depending on your needs or preference. 

With a reputable partner like INS Global, you can manage a lot of workers for your business expansion. Unlike other PEO companies, there is no set minimum or maximum number of workers you can hire for your business expansion.  

The option for a shared workspace for your employees is a good idea. But using a PEO service in Puerto Rico eliminates the need for a local business address. 

Absolutely. We can manage the necessary visa and work permit processes for foreigners in Puerto Rico on your behalf. Also, we can handle situations where any local employment laws, tax laws, or employee benefits differ for Puerto Ricans and foreigners. 

EOR and PEO solutions are ideal for all enterprise sizes, from SMEs to multinational corporations. These solutions ensure the efficient and secure employment of foreign or local workers. Additionally, our services allow you to scale your employment demands to meet opportunities as they arise.  


The legal expertise of PEO and EOR services in Puerto Rico can help businesses that don’t have their own structures or those seeking to avoid cost-scaling difficulties during expansion. 

Hiring costs in Puerto Rico takes varies depending on different factors like the industry, the organization’s policies, and the job position. Other factors affecting the cost include the minimum wage in Puerto Rico, salary and tax benefits, recruitment and training costs, and other indirect expenses. 

Employers in Puerto Rico manage payroll for all workers, usually at the end of every month. Employers are responsible for withholding amounts corresponding to employees income tax and social security fund contributions. 

The minimum wage is set to $8.50/hour and applies across board with exceptions to tipped employees, and some student workers or occupations.  

The following visa types exist for employees in Puerto Rico: 


  • H-1B Visa: This visa category is for skilled foreign workers in specialty occupations or with specialized knowledge and expertise in a specific field. 
  • L-1 Visa: The L-1 visa is allows employees who have been working for a foreign company to transfer to a related entity in Puerto Rico. This visa facilitates the transfer of managerial and executive personnels. 
  • E-2 Visa: The E-2 visa is for investors and entrepreneurs from countries with a treaty of commerce and navigation with the United States, or Puerto Rico. 
  • TN Visa: This visa is for citizens of Canada and Mexico under the North American Free Trade Agreement (NAFTA). It allows professionals from these countries to work in Puerto Rico in specific occupations. 
  • O Visa: The O visa allows individuals who have demonstrated exceptional skills and achievements in the field of science, art, education, business, or athletics to work 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 employees contract are not permitted in Puerto Rico. Changes to an employees 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:  

  • 12 weeks of salary as severance pay 
  • An additional 2 weeks of salary for each full year of service 
  • The total compensation caps at 36 weeks 

The Puerto Rico Department of Labor and Human Resources, or the Departamento del Trabajo y Recursos Humanos de Puerto Rico (DTRH), oversees and enforces labor laws and regulations in the territory. 

Employees in Puerto Rico are eligible for paid leave on the countrys 13 nationally recognized public holidays. These may also include local or regional holidays.