Navigating Employment Regulations for Act 60 Business Owners in Santurce

The single most useful takeaway: Understanding Puerto Rico's labor laws and employment requirements is crucial for Act 60 business owners, especially those based in Santurce.

Who Needs to Hire Employees?

Under Act 60, businesses earning $3 million or more in total annual revenue are required to hire at least one full-time employee who is a resident of Puerto Rico. While this requirement doesn't apply to businesses earning less than $3 million, hiring locally still offers significant benefits, such as cultural insight, language skills, and community trust.

Recruiting Talent in Puerto Rico

When recruiting talent in Santurce, you can post job openings on local job boards, join relevant Facebook groups, or use LinkedIn to connect with professionals in your industry. Be clear and specific in your job descriptions, and consider setting up a referral program within your business to encourage current employees to recommend reliable candidates.

Employment Eligibility Requirements

As an employer, you must complete Form I-9 for every new hire to verify their legal right to work in the U.S., including Puerto Rico. You must keep these records for a minimum of three years after the employee’s hire date or one year after they leave the company, whichever is later. All employees must present documents establishing both their identity and their authorization to work in the United States.

Key Labor Laws and Employment Terms

• Probationary Period: The standard probationary period is 9 months, but it can extend to 12 months for certain roles.
• Minimum Wage: The local minimum wage in 2026 is $10.50 USD per hour.
• Benefits and Leave: Vacation accrues monthly, and sick leave accrues at 1 day per month, up to 12 days a year. Both start accruing during the probationary period.

Managing Payroll and Taxes

Using payroll tools like QuickBooks or ADP can help manage payroll tasks and stay compliant with local laws. You must withhold federal taxes (Social Security and Medicare) and Puerto Rico income tax. Additionally, having a Puerto Rico business bank account may be necessary to process payroll under local regulations.