From the colorful colonial streets of Old San Juan to the lush rainforests of El Yunque, Puerto Rico is known for its natural beauty, vibrant culture, and rich history. But beyond its postcard-perfect scenery, this U.S. territory is becoming an increasingly appealing destination for companies looking to tap into global remote talent.
Thanks to Puerto Rico's unique status as an unincorporated U.S. territory, U.S. labor protections apply. Still, recent laws have created additional flexibility for foreign employers hiring remote workers on the island.
Key takeaways:
- Puerto Rico offers a strong talent pool in finance, customer support, and software engineering sectors — all within U.S. jurisdiction.
- New legislation, including Law 52-2022 and Law 27-2024, makes hiring Puerto Rican residents easier for foreign companies without a physical presence on the island.
- Understanding local employment laws — from probation periods to severance pay — is essential for staying compliant.
Advantages of Hiring in Puerto Rico
Puerto Rico presents a unique opportunity for global companies. It combines many benefits of hiring in the United States (including shared currency and legal alignment) with the advantages of international hiring, like lower costs and strong local talent.
Many local professionals are bilingual in English and Spanish. The island also has a growing startup ecosystem, strong technical universities, and an increasing number of remote-ready professionals.
Here's a quick look at Puerto Rico:
- Language: Spanish and English
- Currency: U.S. Dollar (USD)
- Capital City: San Juan
- Population: 3.2 Million
- Cost of Living Rank: 24th
Tap Into a Highly Educated, Remote-Ready Workforce
Puerto Rico's government has strategically invested in education, particularly STEM fields. The island is home to multiple top-ranked universities, including the University of Puerto Rico system, which consistently produces skilled engineering, business, and healthcare graduates.
This educated talent pool supports a variety of remote-ready sectors.
Common jobs for remote workers in Puerto Rico include:
- Software Developers
- Customer Support Specialists
- Digital Marketing Managers
- Financial Analysts
- Data Entry Specialists
- UX/UI Designers
- Project Managers
The island also has a strong telecommunications infrastructure and widespread internet access, enabling remote work opportunities.
Employment Laws: Hiring Compliantly in Puerto Rico
How Puerto Rico's New Laws Support Remote Work
Two new laws in Puerto Rico are making it easier for companies outside the island to hire remote workers without running afoul of unexpected tax or compliance issues.
Law 52-2022 states that if a company doesn't have a physical presence or operations in Puerto Rico — no office, no warehouse, no local sales team — they aren't required to withhold Puerto Rican income taxes for employees who live and work remotely on the island.
In other words, as long as you don't have an official business footprint in Puerto Rico, you can hire remote workers there without being treated like a local employer for tax purposes.
Law 27-2024 focuses on workers who are only in Puerto Rico temporarily — such as digital nomads. It clarifies that Puerto Rican labor laws don't apply to their employment if a remote worker lives on the island but isn't a legal resident.
Instead, their employment is governed by the laws of their home country (or whatever is stated in their contract). This law gives employers and workers more flexibility and legal clarity for short-term or location-independent arrangements.
Together, these updates make Puerto Rico a much more remote-work-friendly destination — giving companies a more straightforward path to hiring talent on the island without taking on the entire burden of local employment regulations.
Employment Contracts
Puerto Rican labor law recognizes both indefinite-term and fixed-term contracts. Indefinite-term contracts are the default and do not have a specific end date.
Fixed-term contracts are permitted for temporary needs, projects, or coverage during leaves of absence, but misuse can lead to reclassification as indefinite-term.
Working Hours & Pay
The standard workweek in Puerto Rico consists of eight hours per day and 40 hours per week. Overtime is paid at 1.5 times the employee's regular hourly rate. Work performed on Sundays or recognized holidays may qualify for double-time pay under specific conditions.
As of July 2024, the minimum wage in Puerto Rico is $10.50 an hour.
Probationary Periods
The probationary period for non-exempt employees is nine months, and 12 months for exempt employees, such as executives and administrators.
After the probationary period, employers in Puerto Rico must provide just cause to terminate an employee.
Employer Taxes
Employer tax contributions typically range from 18% to 28% of an employee's gross salary and help fund:
- Social Security and Medicare
- Unemployment insurance
- Temporary disability benefits
- Workers' compensation
Note: Because Puerto Rico is part of the U.S. tax system, U.S.-based tax obligations apply to Puerto Rican employees.
Termination Process & Severance Pay
Puerto Rican labor law requires just cause for termination, and employees are entitled to severance pay based on years of service.
For employees hired after Jan. 26, 2017, the mandatory severance payments are based on years of service and range from two months' salary plus one week of wages for each completed year to six months' salary plus three weeks for each completed year.
The total severance payment is capped at nine months' salary.
Paid Leave Laws in Puerto Rico
Vacation and Holiday
Employees in Puerto Rico accrue vacation time every month, with the amount of time accrued per month based on the employee's tenure:
- 0-1 years: 0.5 day of PTO
- 2-5 years: 0.75 days of PTO
- 6-15 years: 1 day of PTO
- 15+ years: 1.25 days of PTO
In addition to vacation leave, employees are entitled to several paid public holidays throughout the year. Commonly recognized holidays include:
- New Year's Day
- Epiphany (Three Kings Day)
- Martin Luther King, Jr. Day
- Puerto Rico Constitution Day
- Labor Day
- Thanksgiving
- Christmas Day
Sick Leave
Employees in Puerto Rico accrue paid sick leave at a rate of one day per month, up to 12 days per year. Sick leave can be used for illness, injury, or medical appointments.
Maternity Leave
Pregnant employees in Puerto Rico are entitled to eight weeks of fully paid maternity leave, typically divided into four weeks before the expected due date and four weeks after childbirth. Employers are responsible for covering 100% of the employee's salary.
Paternity Leave
Fathers and other qualifying caregivers are eligible for five days of paid paternity leave in Puerto Rico for childbirth, adoption, or foster care placement. Paternity leave must be used within a reasonable period following the event.
Why Digital Nomads Love Puerto Rico
Puerto Rico is a rare find for digital nomads — offering tropical beauty, vibrant culture, and legal simplicity.
There are no dedicated digital nomad visas in Puerto Rico. However, Americans can live and work remotely in Puerto Rico without a visa, residency permit, or added paperwork because it's a U.S. territory. For non-U.S. citizens, standard U.S. immigration policies still apply.
Hotspots like San Juan and Rincón are especially popular with nomads, thanks to their coworking spaces, reliable infrastructure, and strong expat communities.
Whether you're surfing before your stand-up or logging in from a café in Old San Juan, Puerto Rico offers the flexibility and lifestyle many remote workers crave.
How to Pay Remote Workers in Puerto Rico
Paying remote employees in Puerto Rico can be relatively straightforward, especially given the territory's alignment with the U.S. banking system. Choosing the best payment method depends on your company's size, structure, and how frequently you run payroll.
- Bank transfers are a reliable and direct method, especially for U.S.-based companies, though they can be slower when processed from international accounts.
- PayPal and Wise offer fast, flexible options for sending smaller payments or paying independent contractors, but they may come with transaction limits or higher fees.
- Cryptocurrency is sometimes used for contractor payments due to its speed and global reach, though its volatility and unclear legal status make it a risky choice for most employers.
- Prepaid payroll cards are used in some industries to pay workers without bank accounts, but they're less common for full-time remote employees.
To streamline payroll and ensure compliance with local tax and labor laws, many companies partner with an Employer of Record (EOR), like RemoFirst.
Hire in Puerto Rico with RemoFirst
When you partner with RemoFirst, we manage everything from payroll and employee benefits to onboarding and legal compliance in Puerto Rico (and 185+ countries worldwide). We ensure your workers are paid accurately, on time, and in complete alignment with both federal and local laws.
Book a demo to learn how RemoFirst can simplify remote hiring in Puerto Rico and beyond.
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