With The New Year, Puerto Rico Enacts New Legislation Facilitating Remote Work And Providing Exemption To Airlines Opening Operation Hubs On The Island

• Published date: 24 January 2024
• Law Firm: Littler Mendelson
• Author: Ms Anabel Rodríguez-Alonso

In the summer of 2022, Puerto Rico enacted Act 52-2022, which amended the concept of "engaged in trade or business" under the Puerto Rico Internal Revenue Code of 2011 to address the pandemic-related issue of employees working remotely from the Island for "out-of-state" employers with no business nexus to Puerto Rico. Act 52 stipulated that businesses with employees working remotely from Puerto Rico would not be deemed "engaged in trade or business," provided certain conditions were met. At the time, we cautioned Act 52 was only a piece in the "wandering worker" puzzle and that companies still needed to be careful about allowing workers to telework from Puerto Rico since Puerto Rico labor and employment law still applied to the employment relationship.

A year and a half later, on January 17, 2024, Governor Pedro R. Pierluisi signed into law House Bill 1745, the "Act to Facilitate the Implementation of Remote Work in Private Enterprise and to Encourage the Establishment of Air Bases...