The bill to Facilitate the Implementation of Remote Work in the Private Sector was signed by the Governor of Puerto Rico this week. Its aim is to integrate the modern paradigm of remote work into the Puerto Rican labor market. The new law only applies to exempt employees (executive, administrative, and professional employees as defined by the Fair Labor Standards Act) who work remotely from Puerto Rico for employers without a physical or business presence in Puerto Rico and who do not do business on the island. In addition, it establishes the applicability and exemption of existing Puerto Rico labor laws to both resident and non-resident employees working remotely from the island.
Furthermore, the law places significant emphasis on the employment contract as the governing instrument in remote work relationships. The terms stipulated in the employment contract primarily govern the employment relationship of employees who are residents of Puerto Rico and who work remotely from Puerto Rico for qualified employers. Puerto Rico law would only apply if the employment contract states so. However, the employer must comply with the local worker’s compensation, short-term disability, and unemployment laws and must pay the chauffeur insurance, if applicable to the specific job. For non-resident workers who come to Puerto Rico to work remotely for qualified employers, their relationship will be governed exclusively by the employment contract, and when there is no contract, it will be governed by the laws of the state where the employee is domiciled. The Puerto Rico Department of Labor will provide guidelines regarding the provisions of the new law.
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