The Secretary of the Puerto Rico Department of Labor and Human Resources ("PR DOL") has issued a new regulation, effective October 18, 2017, to administer Puerto Rico's Christmas Bonus Law, Act. No. 148 of June 30, 1969. The new regulation, which supersedes all prior regulations on the subject, includes guidance on implementation of the Christmas Bonus Law, as amended by the Labor Transformation and Flexibility Act, Act No. 4 of January 26, 2017 ("LTFA").
What the Christmas Bonus Law and its Regulation Require
The Christmas Bonus Law requires employers in the private sector to pay eligible employees a statutory bonus provided certain requirements are met.
The regulation applies to all employers in the private sector that employ one or more employees between October 1 and September 30 of the subsequent calendar year (the "coverage period").
Excluded from the definition of "employees" eligible for the bonus are (a) those employed in agricultural activities, domestic service, in family homes, or by charitable institutions; (b) officials and employees of Puerto Rico's government and each of its three branches, departments, agencies, instrumentalities, public corporations, and municipal governments; or (c) U.S. federal employees.
Employees hired before January 26, 2017, the effective date of the LTFA, must work a minimum of 700 hours, while dock workers must work a minimum of 100 hours, in order to qualify for payment of the Christmas Bonus. Employees hired on or after January 26, 2017, must work at least 1,350 hours to qualify.
Hours worked include only those hours that are actually and effectively worked during the coverage period for the same employer, even if the services have been rendered in different businesses, industries, or involve the employer's other activities. The regulation does not provide guidance on what constitutes "other activities," but they likely include tasks an employer assigns employees, even if such activities are not part of the employer's ordinary course of business, such as disaster recovery efforts.
Employees hired before January 26, 2017
Any employer with 16 or more employees within the coverage period must provide employees a bonus equivalent to 6% of their total salary earned (up to $10,000) within the coverage period. Therefore, the maximum bonus would be $600. An employer with 15 employees or fewer during the coverage period must provide a bonus equal to 3% of the total...