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Client Alert



Puerto Rico’s Yearly Bonus 2021



By: Angel Berberena, Esq.

 


October 26, 2021

 


The holiday season approaches and most employers need to be ready to pay the statutory yearly bonus between November 15 and December 15 or face automatic penalties. Act No. 148-1969 (“Bonus in the Private Sector Act” a.k.a. “Christmas Bonus”) requires employers to pay an annual bonus to employees that worked 700 or more hours between October 1st of the previous year and September 30th of the current year. As a rule, employers with more than 15 employees are required to pay 6% of the employee’s salary, up to a salary cap of $10,000, which is equivalent to a $600 bonus. Employers with up to 15 employees are required to pay 3% of the employee’s salary, up to a salary cap of $10,000, which is equivalent to a $300 bonus.


For employees hired on or after January 26, 2017, the bonus amount and accrual requirements are different. Employers with more than 20 employees between October 1st and September 30th are required to pay an annual bonus of 2% the total salary (no cap on compensation) up to a maximum bonus of $600 if the employee worked 1,350 hours or more hours during said period. Employers with up to 20 employees are required to pay an annual bonus of 2% the total salary (no cap on compensation) up to a maximum bonus of $300 if the employee worked 1,350 hours or more hours during the same period. For employees hired on or after January 26, 2017, the mandatory bonus may be reduced to 50% during the first year of employment.


Employers can reduce the accrual requirements or provide additional compensation. Furthermore, and given certain conditions, the employer may credit towards the statutory bonus other bonuses paid throughout the year.


The provisions of Act 148-1969 are not extensive to agricultural or domestic workers, charitable institutions, or government employees. Certain special provisions apply to workers that receive annual bonuses from collective bargaining agreements.


If the employer had economic losses or the total bonus amount to be paid to all its employees exceeds 15% of the net annual profits between October 1st of the previous year and September 30th of the current year, the employer may file a petition with the Department of Labor and Human Resources to be exempted from payment. This petition must be filed on or before November 30th and include all documentation required by the Agency. Please follow the link below to the Official Notification by the Department of Labor and Human Resources on this year’s procedures and requirements to apply for exemption.


DOL - Notification (Spanish)

Goldman Antonetti & Córdova, LLC stands ready to assist you and your business to adjust to Puerto Rico's regulatory and legal changes. If you need further assistance in this area, please contact any of the following members of our Firm:

Angel Berberena

aberberena@gaclaw.com

787.759.4143

Howard Pravda

hpravda@gaclaw.com

787.759.4110

Romel Meléndez

rmelendez@gaclaw.com

787.759.4115

Gabriel Quintero

gquintero@gaclaw.com

787.759.4130

Luis Antonetti

lantonetti@gaclaw.com

787.759.4111

Vicente Antonetti

vantonetti@gaclaw.com

787.759.4112

Luis D. Ortiz Abreu

lortiz@gaclaw.com

787.759.4110

Disclaimer: Although the information included in this document may concern legal issues, it is not a legal opinion or professional advice and clients shall not use it as such. We assume no responsibility or liability of any kind for any information contained herein, and we expressly disclaim all liability for any claim for damages arising from the use, reference to, or reliance on, such information. If legal or other expert assistance is required, the services of a competent professional should be sought.