Recent developments in Puerto Rico
We understand the challenges of keeping up with regulatory changes. That’s why we actively monitor these developments, so you don’t have to. Below are the key employment-law updates relevant in Puerto Rico during 2026.
Act 80 (Unjust Dismissal) Framework (2026)
The existing Act 80 severance regime continues to apply in 2026. While proposals to expand severance entitlements were discussed previously, no structural changes have been enacted. Employers must continue to comply with current unjust dismissal rules, including statutory severance calculations based on tenure.
Remote Work Regulation Developments (2026)
Puerto Rico continues to rely on general labour law principles for remote and hybrid work. While legislative discussions around formal remote work regulation have taken place, employers in 2026 remain responsible for:
- Documenting remote work arrangements clearly.
- Addressing working hours and availability expectations.
- Ensuring compliance with wage, overtime, and health and safety rules.
Many employers are adopting internal remote work policies in anticipation of future regulation.
Minimum Wage Compliance (2026)
The $10.50 per hour minimum wage, implemented as part of the phased increases under Law 47-2021, remains in force throughout 2026. Employers must ensure payroll systems and overtime calculations are aligned with the applicable federal and local wage standards.
Employer Tax Incentives and Benefit Requirements (2026)
Puerto Rico’s economic development and tax incentive programmes continue to link eligibility to employer commitments, including:
- Employee benefits such as healthcare coverage.
- Workforce training and skills development.
- Compliance with local labour and wage laws.
Employers seeking or maintaining incentives must meet these ongoing conditions.
Independent Contractor Classification Enforcement (2026)
Labour authorities continue to prioritise audits related to independent contractor misclassification. Employers engaging contractors in 2026 should:
- Review contractual arrangements.
- Assess control, dependency, and integration factors.
- Ensure proper classification to avoid penalties and back payments.
