Puerto Rico Labor Laws

Puerto Rico Labor Laws

Did you realize that the Puerto Rico labor laws are different in many key ways than in the mainland US? They are substantially more labor-friendly than you might expect. If you own or are starting a Puerto Rico business and have employees in PR, it’s very important to understand these key differences.

Additionally, there have been changes to these laws. Some have favored the employer, but some more recent changes, just passed in June of 2022, are more beneficial to employees.

Some key points

  • Puerto Rico labor laws are based on “right to work” rather than the “at will” employment in the mainland.
  • Employees in PR must be paid a Christmas bonus.
  • Paid vacations, sick leave, and government holidays are dictated by law.
  • Employment can begin under a probationary period of up to 3 months (which can be extended for up to another 3 months if you get permission from the PR Department of Labor).
  • Should you need to terminate an employee for cause, it’s important to show a history backing this up.

New Webinar

We had scheduled a webinar on this topic which incorporated the PR labor law changes enacted last year, but a new change is causing us to delay this webinar. A court connected to PROMESA recently declared the new laws void, and the results of this are still being worked out. We will reschedule the webinar once more details become available.

Frequently Asked Questions About Puerto Rico

Frequently Asked Questions About Puerto Rico

Below are some of the most common questions we hear from people considering Puerto Rico as a relocation destination. Contact us for more details, and for a free consultation about your unique situation.


Doesn’t Puerto Rico Have a High Crime Rate?

Puerto Rico’s issue has more to do with public relations than actual crime! This image is partly formed by cultural stereotypes and political history.

Like everywhere else, Puerto Rico’s crime rate varies depending upon what area you happen to be in. Its metropolitan areas tend to be higher, especially in less wealthy parts of town. However, it can be argued that the crime in the cities is comparable to US cities. For example, Puerto Rico’s murder rate is half that of Washington DC and Detroit. If Puerto Rico were ranked for safety as if it were a State, it would be 19th in the list.

For those who are relocating and want an extra degree of protection, there are a number of gated community options that are extremely safe.


What is the Food Like in Puerto Rico?

The local cuisine is Spanish with Caribbean accents. It is heavy in meat, particularly pork, and moderately spicy, though typically less spicy than what you might find in other parts of Latin America. As in many “island” cuisines, sweet and coconut flavors can be found in many dishes. Plantains are a major staple.

Dining out, we have found that while many fine options exist in Puerto Rico, good restaurants featuring Asian cuisines, in particular, are rare.

Grocery stores are plentiful, and the locally grown food is inexpensive. For organic food, and other items that are not produced on-island, you may have to go to specialty stores, where the prices are higher.


Is it Safe to Drink the Water?

The tap water is considered safe to drink in Puerto Rico, as the sanitation standards are the same here as in the States.


Is it Necessary to Learn Spanish to Live in Puerto Rico?

The great news is that it is not necessary to learn Spanish to relocate to Puerto Rico!

Both Spanish and English are official languages in Puerto Rico. Most government forms and official sites, as well as most menus and other things you might need to read, are available in English. Also, most service providers and customer service representatives are either fluent in both English and Spanish, or at least know enough English to get by.

However, you will almost definitely encounter some people who speak little to no English. For these encounters, it can be helpful to learn at least a little conversational Spanish, though we have never yet encountered a situation when it was absolutely necessary. Puerto Ricans are generally very friendly and accommodating of a limited Spanish vocabulary; rather than being judgmental or impatient, as some cultures can be in this type of situation, the folks in Puerto Rico usually appear to us to graciously appreciate whatever genuine effort you can make.


What is the Cost of Living in Puerto Rico?

The cost of living varies depending upon the area in which you live. Gated communities tend to be more expensive for real estate, and the dining and entertainment in those areas are also pricier. However, people who move to more expensive areas in Puerto Rico may well have lived incomparably expensive areas prior. There are many areas to live which are still desirable and safe, but affordable.

Gas tends to be just slightly more expensive in Puerto Rico than in the States. (Also note that it is sold in liters rather than gallons, which can be confusing at first.) Electricity is currently about twice the price; however, there is never a need to heat your living space here, and while you may choose to run your air conditioner more, fuel efficient inverter air conditioners are common in most modern homes.

Food can be more expensive, particularly if you prefer to buy organic products, as there is currently very little organic farming happening in Puerto Rico. Other items that must be imported may cost more as well.

Here is a cost of living comparison tool which may give you a good idea of what you might expect, based on an average price for living in Puerto Rico, compared to wherever you may be moving from.


What would happen if Puerto Rico Became a State?

If Puerto Rico became a US State, its residents would become subject to US federal tax. This almost completely eliminates the benefits of the tax incentive Acts, as the low Puerto Rico tax would then become a state tax, owed in addition to what must be paid to the IRS.

It should be noted, however, that the people of Puerto Rico have declined Statehood, by public referendum, on more than one occasion in the past. Many Puerto Ricans are proud of their independence; Puerto Rico competes as its own country in the Olympic Games. Also, with so many of the population living in poverty, few are eager to accept the additional tax burden for many that would come with Statehood. Finally, it appears to us that many Puerto Ricans are savvy about the prospects for economic recovery, growth, and prosperity made possible by the Commonwealth’s unique legal status. Though Statehood may be inevitable at some point in the farther future, we judge it to be unlikely in the near term.

We Can Help

Our company helps people like you take advantage of Puerto Rico’s excellent tax incentives!  We can help you determine which tax incentives are right for you, help you plan your residency and relocation strategy, and simplify the entire process for you.

Contact us for a free initial consultation.

Traveling To And Around Puerto Rico

Traveling To And Around Puerto Rico

Air Travel

Puerto Rico air travel is fairly painless!  There are many non-stop flights every day between major eastern US hubs such as New York and Miami, and flights tend to be reliable and comparatively inexpensive.  If you are planning a trip to investigate relocating to Puerto Rico,contact us to help you!

Airports exist within an hour’s drive of almost any place on the island.  The following are the international airports, but there are 9 regional airports we aren’t including here:

  • San Juan – SJU (Luiz Munoz Marin International Aiport)
  • Ponce – PSE (Mercedita International Airport)
  • Aguadilla – BQN (Rafael Hernandez International Airport)

Renting a car in Puerto Rico

If you are planning a trip to Puerto Rico, you may find that it is difficult to rent a car during the Christmas season. Car rental companies may allow you to reserve a vehicle, but from mid-December to mid-January, some travelers find that no cars are available. Vacationers tend to extend their reservations without notice, and due to this and unexpected last minute cancellations, the agencies aren’t able to effectively manage their inventory.

For this reason, it may be best to schedule your vacation or exploratory trip during a different time period, or plan to be in a place where you can walk to most of what you want to see. Cabs are also very available and clean in the metropolitan areas, and relatively inexpensive.

Driving in Puerto Rico

Like the rest of the United States, the general infrastructure of Puerto Rico reflects “car culture”. It common for individuals or families to have at least one automobile, even if it is expensive, for commute and basic use. Private transportation is primary for many, accommodated by the extensive system of roads and traffic, complete with rush hour.

The size of the island is such that it would take a driver approximately 8 hours to travel around its perimeter at normal highway speeds. Those whose business interests would make frequent travel to different parts of the island advantageous, and those who want to visit the many natural wonders of the island with any considerable frequency, would find it advisable to simply own an automobile.

However, some who relocate to Puerto Rico elect to avoid the expense and extra hassle of owning a car. As elsewhere in the United States, public transportation and the proximity of goods and services can make this very feasible in some urban areas. In locales such as Condado, Isla Verde, and Old San Juan, a car really isn’t necessary. There are also several gated communities, many of them designed with expats in mind, in which it is typical for residents to use golf carts to get around.

For those who choose to, having a vehicle to use has its challenges:

  • Bringing your car with you when relocating to Puerto Rico isn’t cheap – shipping it will cost several thousand dollars, and you will also pay thousands more in taxes to import it (as much as 40% of the car’s value).
  • If you buy a car here, taxes are higher than in the States and in some other places. Taxes vary from 10-50% depending upon whether the car classifies as a luxury vehicle.
  • And leasing is, unfortunately, not really an option in Puerto Rico. While leases exist, they are rare, and such a different animal in Puerto Rico that they typically are not an attractive option.

Traffic can be a challenge as well. In some metro areas, congestion during rush hour is definitely to be avoided.

And finally, while the rules of the road in Puerto Rico are the same as in the States, people don’t tend to observe them in the same way. We find driving in Puerto Rico to be more chaotic and unpredictable than in other places we have lived. In some ways, it is more laid back – people tend to drive slower altogether, even in the fast lane. At the same time, you have to be very alert for unexpectedly creative interpretations of driving laws. To give a general impression, some of us find driving in Puerto Rico to be more difficult than in most of the States (with the possible exception of New York City), while far more sane and orderly than in some parts of Asia.

Puerto Rico’s Public Transportation

While there are some buses and trains in metro areas, many areas are not included. Bus schedules also have a reputation for being somewhat hit or miss. If you are considering public transit as part of your plan, it would be best to test out the options in your intended destination city.

Whether you are considering relocation or just wanting to check out Puerto Rico for the first time, contact us for advice and assistance!

We Can Help

Our company helps people like you take advantage of Puerto Rico’s excellent tax incentives!  We can help you determine which tax incentives are right for you, help you plan your residency and relocation strategy, and simplify the entire process for you.

Contact us for a free initial consultation.

Best Places to Live in Puerto Rico

Best Places to Live in Puerto Rico

Places to Live in Puerto Rico: From City to Beach

Puerto Rico offers many lifestyle options. Whether you are looking for the faster pace of city life, an exclusive gated community, a more family-oriented suburb or small town, or you are seeking solitude and communion with nature, you can find a great place to live in Puerto Rico. We assist our clients in the whole process – call us for a free consultation!

Below are just some of the options you may want to consider.


City Life in Puerto Rico


San Juan

On the northern and Atlantic side of the island, the largest city and capital of Puerto Rico is home to just under 400,000 people, with a metropolitan area population approaching two-and-a-half million. It is home to the island’s busiest airport, its largest performance and sporting venues, and the largest shopping mall in the Caribbean region. Grown from the original Spanish fort that has guarded Puerto Rico’s “rich port” since the days of Christopher Columbus, it is the site of some of the oldest colonial buildings in the United States and offers an overwhelming wealth of cultural inheritance.

Here are some of the more popular neighborhoods in the metropolitan area:

Old San Juan – Though the charm of this historic area makes it a prime tourist attraction, it also offers beautiful and unique apartment living. Also – convenience to all amenities, great shopping, many very good dining options, lots of social options, street performances, and a lot of history. Additionally, the capital building and seat of government are near to this area, and it is home to the Governor’s residence, which has been in continuous use since colonial times.

Condado/Miramar/Santurce – Upscale, downtown area known for safety, beautiful condo buildings, and great shopping. This area is also popular with tourists, with a number of high-end hotels and casinos along the beach. Parts of this neighborhood have become a kind of “hipster village”, not far removed from the affluence of its condos, hotels, and beaches.

Isla Verde – Close to the airport, Isla Verde is also home to many resorts and hotels. Condos in this area are close to what may be the best beach in the San Juan area; there are some less desirable areas also. There are many residents of high-end affluence in this area, but in smaller number and greater concentration than in Condado.


Ponce (Southern Puerto Rico)

“The Pearl of the South”, Puerto Rico’s second largest city. It is the site of Puerto Rico’s principal port on the Caribbean Sea, one of the busiest ports in the Caribbean region for container shipping. It also has its own international airport nearby. Retaining a lot of its colonial character, it likely offers more opportunities for those who are comfortable navigating local culture, customs, and language.


Popular Gated Communities in Puerto Rico

Palmas del Mar – The largest resort in Puerto Rico, in recent years it has also become a very popular locale for expats seeking timeshare or permanent residence options. It offers beautiful beaches, a marina and yacht club, world-class golf courses, riding trails, a plethora of tennis courts, restaurants and shops, and even its own English-language school. A safe, beautifully maintained, and family-oriented place, with several levels of home and neighborhood options.

Dorado – A popular destination for those moving from the States, Dorado is also one of the most expensive and exclusive areas in Puerto Rico. It boasts beaches, sought-after golf courses, upscale hotels and shopping, and beautiful and ornate homes.

Guaynabo – This is really a suburban city with a number of smaller gated communities within it. Guaynabo stretches from the edges of San Juan far inland, with many different suburban developments, both gated and open. Lots of shopping and dining options.


Smaller Cities and Towns

Cayey – This inland city offers a cooler climate as it is set within a mountain range. It is also home to the University of Puerto Rico at Cayey.

Fajardo – This small city is at the north-eastern side of the island, and is known for recreational boating. The largest marina in the Caribbean – Puerta Del Ray – is here, a popular launching hub for other nearby islands, such as Vieques and Culebra.

Lares – This small inland town toward the western end of the island is known for being very friendly and safe, as well as for its historical significance in the struggle for independence from Spain.

Mayaguez – The top engineering school in the Caribbean, The University of Puerto Rico at Mayaguez, is located here, on the western coast of Puerto Rico. The pace of life is suburban, with some middle-class housing and shopping development.


Popular Nature Oriented Locales

Rincon – Some call this small western town the “California beach town” of Puerto Rico. Surfers call it paradise! Close to Rafael Hernandez Airport (BQN).

Isabela – Also known as the “Garden of the Northwest” (Jardin del Noroeste), this gorgeous town is known for its breathtaking views, which include coastline, mountains, rainforests, lakes, submarine rivers, and archeological sites.

Vieques Island – Only slightly more developed than Culebra Island, Vieques offers amazing attractions and natural wonders. Its quiet, pristine beaches include the world-famous Bioluminescent Bay, filled with a rare type of plankton that glows at night.

Culebra Island – Protection by law from commercial development has allowed this small Puerto Rican island to preserve the beauty of Flamenco Beach, said to be one of the best in the world. A popular tourist attraction, even for Puerto Ricans.

We Can Help

Our company helps people like you take advantage of Puerto Rico’s excellent tax incentives!  We can help you determine which tax incentives are right for you, help you plan your residency and relocation strategy, and simplify the entire process for you.

Contact us for a free initial consultation.

What You Should Know About Puerto Rico’s Employment Laws

What You Should Know About Puerto Rico’s Employment Laws

Employee management can be more complex in Puerto Rico

Puerto Rico labor laws can be said to favor the employee. We have also heard from a number of sources that lower wage, non-exempt employees commonly know the employment laws well and hold employers accountable to them. If you will be managing employees of your own, you must become familiar with these laws, especially if you are required to maintain a certain number of employees to remain compliant with a tax exemption grant.

Because management of employees can be complex, our company offers business management services to oversee your human resources needs. We assist our clients in hiring and management of employees, as needed.

Below are some important notes (though this is not intended to be comprehensive).


Employment is not “at will:

It can be more difficult to release an employee in Puerto Rico.  If you wish to terminate an employee due to their performance, it must be for just cause, and you must be able to show documentation of disciplinary actions taken over time to remedy the situation.  It is also possible to lay off an employee because their position has truly been eliminated for demonstrable, valid business reasons.

In addition, it is possible for an employee to be hired for only a pre-defined length of time or to have an initial probation period of up to 90 days.  These types of arrangements would need to be explicitly stated in the employment contract and cannot continue indefinitely.

Firing someone without just cause can result in owing severance compensation based on years of service.


Paid Time Off

Puerto Rico requires employers to pay for time off in situations not required in the mainland US.

Mandatory paid maternity leave: Employees are entitled by law to 8 weeks paid maternity leave. Paid leave rights also apply to miscarriages, abortions, and adoptions of children 5 years or younger. The Working Mother’s Act also protects employees from pregnancy discrimination.

Vacation leave: All non-exempt employees are entitled to 1.25 days of paid vacation leave for each month in which they work at least 115 hours, though they aren’t entitled to take this leave until it has accrued for an entire year. Employers owe employees payment for vacation time not taken upon termination.

Sick leave: Non-exempt employees are also entitled to accrue one day of sick leave for each month in which they work at least 115 hours.

Paid Christmas Bonuses

Puerto Rico employees are legally entitled to a bonus in December of 6% of the first $10,000 of the employee’s annual wages.


Exempt employees: The July 2016 FLSA rule change that doubled the minimum salary for employees defined as exempt from overtime does not apply in Puerto Rico.  The minimum annual salary for exempt employees in Puerto Rico currently remains at $23,660, but this matter is subject to a review underway by the Comptroller General of the United States.

We Can Help

Our company helps people like you take advantage of Puerto Rico’s excellent tax incentives!  We can help you determine which tax incentives are right for you, help you plan your residency and relocation strategy, and simplify the entire process for you.

Contact us for a free initial consultation.

Thank you for signing up!