Remote Workers in Puerto Rico Could Be Exempted From Puerto Rico’s Employment Laws


On January 26, 2024, Puerto Rico enacted Law 27-2024, which exempts certain remote workers and their employers from complying with Puerto Rico’s employment laws.

Quick Hits

Law 27-2024

In an attempt to address the uncertainties in the legal landscape resulting from employees working remotely, Puerto Rico enacted Law 27-2024 which exempts certain employees and employers from being subject to Puerto Rico’s employment obligations, and allows them to govern the employment relationship by the laws of another state.

Under the statute, Puerto Rico employment laws (including statutory rights, workers’ compensation, and unemployment and short-term disability insurance) will be inapplicable to nondomiciled employees and their employers not engaged in trade or business in Puerto Rico when the employee relocates to Puerto Rico to perform remote work. The employment relationship will be governed by the employment contract and, if there is no contract, by the laws of the state where the employee is domiciled.

For employees who are exempt from the overtime requirements of the Fair Labor Standards Act (FLSA)—e.g., executives, administrators, and professionals—and who are domiciled in Puerto Rico, the employment relationship will be governed by the employment agreement between the parties and not under Puerto Rico law, unless the parties agree to make Puerto Rico law applicable. For these FLSA-exempt employees domiciled in Puerto Rico, workers’ compensation, short-term disability and employee driver’s insurance under Puerto Rico law will be applicable only if the employer fails to provide under a private plan at least the minimum statutory benefits granted under each statute; and unemployment insurance will be applicable unless the employee is eligible for unemployment benefits in another jurisdiction. Nonexempt employees domiciled in Puerto Rico will be subject to all Puerto Rico employment laws, benefits, and insurance requirements.

An employer is not engaged in trade or business in Puerto Rico when:

Whether an employee is domiciled in Puerto Rico is a determination that takes into account both (i) where the employee resides and (ii) the employee’s intention to reside in that jurisdiction indefinitely.


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National Law Review, Volume XIV, Number 36