The “Law to Facilitate the Implementation of Remote Work in the Private Sector and to Incentivize the Establishment of Airline Home Bases in Puerto Rico” regulates the employment relation of employees who work remotely from Puerto Rico. Governor Pedro Pierluisi signed Act 27-2024 into law on Jan. 17, 2024, and it became effective immediately.
The legislation expands on the provisions of Act 52-2022, which amended the Puerto Rico Internal Revenue Code (PR Code) to provide that, for taxable years after Dec. 31, 2021, businesses with employees working remotely from Puerto Rico were not deemed “engaged in business in PR” if certain conditions were met (the “remote employee rule”). Employers who comply with the remote employee rule do not have to withhold income taxes under the PR Code on salary payments made to employees working remotely. Under Act 52, the remote employee must make estimated tax payments on a quarterly basis.
Act 52-2022, however, was silent on the employment laws that would apply to employees working remotely. Act 27-2024 fills in this gap.
In passing this law, the legislature recognized that with the COVID-19 pandemic, many employers implemented alternative work structures, including remote work. Nonetheless, a lack of guidelines or rules regarding remote work deterred U.S. and international employers from allowing employees to work remotely from Puerto Rico. Thus, the new law aims to facilitate and encourage remote work in...
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