Unemployment Insurance Law Summaries
Puerto Rico, Unemployment Insurance Law Summaries
Puerto Rico's unemployment compensation law is located in Puerto Rico Laws Annotated, Title 29, Chapter 47, as amended; the Temporary Disability Benefits Act is Act 139, approved June 26,1968, as amended; and in the Regulations Under the Puerto Rico Employment Security and Disability Benefits Acts. (For full text, see UI-PR ¶4001).
DEFINITIONS
“Employer” means any employing unit which during any day within the current or preceding calendar year has or has had employees.
“Employer for disability benefits:” One who during any day of the current or preceding calendar year has or had employed one or more persons. Also those electing coverage. See COVERAGE, below, for details about private plans providing substitute coverage for that under the disability benefits act.
“Employment:” Service for wages, including service in interstate and foreign commerce, by corporate officers, by members of partnerships, for Puerto Rican agencies, instrumentalities or municipalities organized to operate as private enterprises, by an officer or crew member of an American vessel if the operating office controlling such vessel is within Puerto Rico, and service subject to the FUTA. Services are deemed to be employment unless and until it is shown that worker is:
free from direction and control; and
performing such service outside usual course of employer's business or outside all places of employer's business: and
engaged in independently established trade, occupation, profession, or business.
Services by certain agent-drivers, commission-drivers and itinerant salespersons or commercial travelers are covered.
Exemptions from employment are listed below.
“Employment for disability benefits:” Generally, the same as that described under “Employment ” and “Exemptions” for unemployment insurance purposes, except that all workers in agricultural activity and the sugar mills are covered.
“Wages:” $7,000. This includes compensation for services, including commissions, bonuses, cash value of noncash remuneration, vacation or sick leave pay, and back pay awards. Exemptions are listed below.
“Wages for disability benefits:” The definition of the term “wages” is the same under the disability benefits act as under the employment security act, except that the annual taxable wage base is $9,000.
COVERAGE
A covered employer is any employing unit which during any day within the current or preceding calendar year has or has had employees.
Covered employment is service for wages, including service in interstate and foreign commerce, by corporate officers, by members of partnerships, for Puerto Rican agencies, instrumentalities or municipalities organized to operate as private enterprises, by an officer or crew member of an American vessel if the operating office controlling such vessel is within Puerto Rico, and service subject to the FUTA. Services are deemed to be employment unless and until it is shown that worker is:
free from direction and control; and
performing such service outside usual course of employer's business or outside all places of employer's business: and
engaged in independently established trade, occupation, profession, or business.
Services by certain agent-drivers, commission-drivers and itinerant salesmen or commercial travelers are covered.
Exemptions from coverage are listed below.
Agricultural and domestic employers.- Agricultural labor is covered. If agricultural labor is provided by a crew leader, the employing unit for which the services are performed is the employer of the crew members unless the crew leader is registered under the Farm Labor Contractor Registration Act of 1963 or substantially all of the crew members operate or maintain mechanized equipment that is supplied by the crew leader. In either of these cases, the crew leader is the employer.
Domestic service.- Domestic service performed in a private home is covered if performed for an employing unit that paid cash remuneration of $1,000 or more for such service in any quarter of the current or preceding calendar year.
Government and nonprofit employer.- Mandatory coverage is required with respect to services performed for tax-exempt nonprofit organizations, state hospitals and institutions of higher education, agencies or instrumentalities of the Commonwealth and municipalities organized to operate as private enterprises. All services for the Commonwealth and its political subdivisions are mandatorily covered. Services for the federal government and foreign governments are exempt.
Nonprofit organizations and hospitals and institutions of higher education operated by the Commonwealth or its political subdivisions and any other covered governmental entity, have the option of financing the payment of benefits by the regular contributions method or the reimbursement method.
Covered nonprofit organizations and governmental entities have a choice of the following reimbursement methods:
payments equal to the full amount of regular benefits plus 50% (100% for governmental entities) of the extended benefits paid to claimants, or
a variable percentage based on payroll.
If, at the end of the year, the payments made under (b) are less than or in excess of the total amount of regular benefits plus
the extended benefits paid to claimants, an adjustment is made so that the amount of reimbursement payments equals the benefits paid out. Bills must be paid not later than 30 days after mailing.
For Disability Insurance, a covered employer is one who during any day of the current or preceding calendar year has or had employed one or more persons. Also those electing coverage.
Private plans are allowed to provide substitute coverage for that under the disability benefits act. If such a plan is approved, neither the employer nor the employees are liable for contributions under the act, and the employees are not entitled to the benefits provided under the act. However, the plan must pay benefits at least equal to those provided under the act, and it must pay assessments for costs of administration and supervision of the public fund with respect to private plans, etc. The Secretary is authorized to levy any assessments on the private plans deemed necessary to avoid an actuarial disadvantage to the public fund because of private plans.
Covered employment is generally the same as that described above for unemployment insurance purposes, except that all workers in agricultural activity and the sugar mills are covered.
EXCEPTIONS
Wages.- The term “wages” does not include:
Wages over the first $7,000.
Dismissal pay.
Gratuities paid by persons other than employing unit.
Any compensation obtained through judgment, stipulation, transaction, or voluntary act of employer which is in addition to salary individual is entitled to receive.
Payments under plan for retirement, hospitalization, or medical and medicine expenses.
Payments as premiums under plan for retirement or insurance.
Wages for disability insurance.- The term “wages” does not include:
Wages over the first $9,000.
Dismissal pay.
Gratuities paid by persons other than employing unit.
Any compensation obtained through judgment, stipulation, transaction, or voluntary act of employer which is in addition to salary individual is entitled to receive.
Payments under plan for retirement, hospitalization, or medical and medicine expenses.
Payments as premiums under plan for retirement or insurance.
Employment.- The term “employment” does not include:
Service not in the course of employer's trade or business, unless cash wages therefor are $50 or more a quarter and individual is “regularly employed” (worked 24 days in current or preceding quarter) to perform such services.
Door-to-door salesperson whose remuneration consists of, or derives exclusively from, commissions, discounts, or percentages related to orders for and house-to-house sales of articles that were previously acquired or purchased by such individual for that purpose.
Employees on non-American aircraft or vessels outside the U.S. or Puerto Rico.
House seller engaged in the business of sale of articles for use and consumption to any buyer for resale (by the buyer or other person) in his or her home or any other premises other than a store or business, if he or she receives compensation related to sales rather than to hours worked and performs his services under a contract providing that he will not be treated as an employee for tax purposes.
Services performed by real estate agent if he or she holds a real estate license, receives compensation for services performed rather than for hours worked, and performs services under a contract providing that he or she will not be treated as an employee for tax purposes.
Services performed by a partner for the partnership of which he or she is a member.
Service covered under a federal unemployment insurance program.
Service covered under another state law through reciprocal arrangements.
Service performed in the employ of an international organization.
Services by officer or crew member of U.S. vessel or aircraft, in connection with such vessel or aircraft, if operating office is outside Puerto Rico.
Services by officer or crew member in catching or harvesting fish, shellfish, crustacea, sponges, seaweed, or other forms of aquatic or vegetable life except (a) salmon and halibut fishing for commercial purposes, or (b) services in connection with vessel of more than 10 net tons.
Services performed for son, daughter, or spouse, or by child under 21 for parent.
Students' services, performed as an employee of a school, college, or university, if performed by a student enrolled in and regularly attending such school, college, or university.
Service for a hospital by patient of the hospital.
Service by student enrolled at nonprofit or public educational institution in full-time work-study program. Exemption not applicable if service performed under program established for an employer or group of employers.
Government and nonprofit employers.- Services for the federal government and foreign governments are exempt. Services for the state and nonprofit organizations do not include the following:
Church or organization operated primarily for religious purposes and which is controlled by a church.
Religious duties of a minister or member of a religious order.
Patients performing services in a rehabilitation facility or sheltered workshop.
Individual receiving unemployment work-relief or work training under program financed by federal agency or an agency of a state or political subdivision.
Inmates of penal or custodial institutions.
Elected officials.
Members of the Legislative Assembly or judges.
Members of the Air or State National Guard.
Temporary employees serving in case of fire, storm, earthquake, flood or any other emergency.
Individuals serving in posts of public confidence or as assessors in the formulation of public policy.
Employment for Disability Benefits.- The term “employment” does not include:
Service not in the course of employer's trade or business, unless cash wages therefor are $50 or more a quarter and individual is “regularly employed” (worked 24 days in current or preceding quarter) to perform such services.
Door-to-door salesman whose remuneration consists of, or derives exclusively from, commissions, discounts, or percentages related to orders for and house-to-house sales of articles that were previously acquired or purchased by such individual for that purpose.
Employees on non-American aircraft or vessels outside the U.S. or Puerto Rico.
House seller engaged in the business of sale of articles for use and consumption to any buyer for resale (by the buyer or other person) in his home or any other premises other than a store or business, if he receives compensation related to sales rather than to hours worked and performs his services under a contract providing that he will not be treated as an employee for tax purposes.
Services performed by real estate agent if he holds a real estate license, receives compensation for services performed rather than for hours worked, and performs services under a contract providing that he will not be treated as an employee for tax purposes.
Services performed by a partner for the partnership of which he is a member.
Service covered under a federal unemployment insurance program.
Service covered under another state law through reciprocal arrangements.
Service performed in the employ of an international organization.
Services by officer or crew member of U.S. vessel or aircraft, in connection with such vessel or aircraft, if operating office is outside Puerto Rico.
Services by officer or crew member in catching or harvesting fish, shellfish, crustacea, sponges, seaweed, or other forms of aquatic or vegetable life except (a) salmon and halibut fishing for commercial purposes, or (b) services in connection with vessel of more than ten net tons.
Services performed for son, daughter, or spouse, or by child under 21 for parent.
Students' services, performed as an employee of a school, college, or university, if performed by a student enrolled in and regularly attending such school, college, or university.
Service for a hospital by patient of the hospital.
Service by student enrolled at nonprofit or public educational institution in full-time work-study program. Exemption not applicable if service performed under program established for an employer or group of employers.
Government and nonprofit employers.- Services for the federal government and foreign governments are exempt. Services for the state and nonprofit organizations do not include the following:
Church or organization operated primarily for religious purposes and which is controlled by a church.
Religious duties of a minister or member of a religious order.
Patients performing services in a rehabilitation facility or sheltered workshop.
Individual receiving unemployment work-relief or work training under program financed by federal agency or an agency of a state or political subdivision.
Inmates of penal or custodial institutions.
Elected officials.
Members of the Legislative Assembly or judges.
Members of the Air or State National Guard.
Temporary employees serving in case of fire, storm, earthquake, flood or any other emergency.
Individuals serving in posts of public confidence or as assessors in the formulation of public policy.
PROCEDURES
Base period.- First four of the last five completed calendar quarters preceding benefit year.
Base period for disability insurance.- The first four of the last five consecutive calendar quarters immediately preceding the first day of the disability period; or, if claimant has not had at least $150 in base-period wages and his disability period begins within a benefit year previously established under the employment security act, his base period will be the first four of the five calendar quarters immediately preceding the unemployment insurance benefit year.
Benefit year.- 52-week period beginning with day worker first files request for determination of insured status.
Week of unemployment.- For a worker other than an agricultural worker, any week in which he or she did not render services for a complete workweek and his or her wages or remuneration from self-employment was less than one and one-half times his or her weekly benefit amount. For an agricultural worker, any week in which he or she did not render services in a full working period and his or her salary in a covered job is less than one and one-half times his or her weekly benefit amount.
Benefit period for disability insurance.- Defined as a period during which a person has been continuously disabled. Subsequent periods of disability caused by the same or a related illness or accident are considered as one period if occurring within periods of less than 90 days.
Weekly benefit amount.- The weekly benefit amount is from $7 to $133, depending on high quarter base period wages and total base period wages, less weekly income in excess of weekly benefit amount. Effective each July 1, maximum is 50% of statewide average weekly wage for preceding calendar year. For agricultural workers, weekly benefit amount is from $10 to $42 (maximum is 50% of average agricultural weekly wage as of each July 1); except that the claims of agricultural workers with wages in two quarters of the base period are determined in the same manner as for nonagricultural workers.
Weekly benefit amount for disability insurance.- $12 to $113, depending on total base-year wages and, for some claimants in the lower brackets, high-quarter base-period wages. For workers 50% or more of whose base-year wages were paid for agricultural services (agricultural labor and sugar mill work), the range of weekly benefit amounts is from $12 to $55. Agricultural workers may elect to receive benefits under benefit tables established for nonagricultural workers.
of the weekly rate is payable for single days of disability.
$3,000 in addition to regular disability benefits owed will be paid to the dependents of a worker upon the sudden death of such worker as a result of injuries or accident compensable under the law or if, as a result of injury or sickness compensable under the law, the worker dies within 52 calendar weeks after the disability began.
Certain dismemberments will be compensable in sums from $1,000 to $3,000. Amount payable will be paid within 90 days following the date of the accident causing the particular dismemberment. If a worker dies within 30 days after suffering the dismemberment, any amount paid for the dismemberment will be deducted from the death benefit due him or her.
Claims for death or dismemberment benefits must be filed within six months of the worker's death or dismemberment, although this period may be extended for good cause. Benefits will not be paid for death or dismemberment caused by an automobile accident covered by the Automobile Accidents Social Protection Act of 1968.
An employee disabled due to pregnancy may receive disability benefits, but benefits received for any period during which she is receiving benefits under the Act to Protect Working Mothers will be the difference between the benefits received under that Act and 75% of her weekly wages.
Maximum total benefits.- 23 times weekly benefit amount (duration of benefits is 23 weeks). In addition, during certain periods of high unemployment, payment of extended benefits at a claimant's weekly benefit rate. Extended benefits are also payable under certain conditions to workers in the agricultural phase of the sugar industry.
Maximum total benefits for disability insurance.- 26 times the weekly benefit amount. Total unemployment insurance benefits and disability benefits may not exceed 26 calendar weeks in any 52-week period. There is no reduction in the maximum duration of benefits for days paid or payable as vacation or sick leave pay if the days are provided by mandatory decree, collective bargaining agreement, or provision of law.
If claimant continues to receive some compensation from his or her employer (or from a fund to which the employer has contributed) during his or her disability, his or her total benefits will be reduced if the amount of the payments from the employer and the disability benefits together would exceed his or her full-time weekly wages prior to his or her disability.
These other restrictions on duplication of payments apply:
No disability benefits are payable for any week in which claimant receives unemployment insurance benefits under Puerto Rico's law or that of any state.
Generally, where a claimant receives workers' compensation benefits, he or she is not eligible for disability benefits. But, where there is a dispute as to whether workers' compensation or disability benefits should be paid, the disability benefits paid to the claimant may not exceed $40 per week until a final decision is reached.
No benefits may be paid from the Disability Benefits Fund for any period when benefits are paid under a private plan, except if that payment is due to concurrent employment on the last day of employment preceding the disability.
No disability benefits are payable for periods for which payments are received under any employer liability act, any act of temporary disability benefits or benefits for illness, any similar act, or disability benefits under the Social Security Act; except that this provision is not applicable if the payments are received on account of a different permanent partial disability incurred prior to the disability for which benefits are being claimed.
Benefit eligibility; Requirements.-
Claimant is eligible for benefits if-
he or she was paid total of $280 in base-period wages, earned in at least two quarters of the base period, with at least $75 in one quarter of base period;
he or she officially filed notice of unemployment, registered for work and served waiting-period week; and
he or she is able and available for suitable work.
No otherwise eligible individual may be disqualified for benefits because he or she is undergoing approved vocational training or retraining. An otherwise eligible individual in approved training may not be considered ineligible for benefits on grounds of nonavailability for work or failure to apply for or refusal to accept suitable work. Separate qualifying earnings requirements apply to agricultural workers, and special eligibility requirements apply in claims for the extended benefits payable to workers in a “special unemployment situation.”
A claimant may not receive benefits in the second of two consecutive benefit years unless, after the beginning of the first of such years during which he or she received benefits, claimant received wages of at least three times his or her weekly benefit amount determined for the first benefit year, but not less than $50.
An individual in an instructional, research or principal administrative capacity for an educational institution is ineligible for benefits during school vacation periods and paid sabbatical leaves based on service with such an institution.
Employees of educational institutions or educational service agencies are ineligible during established and customary vacation and holiday periods if there is reasonable assurance of reemployment after such period.
Benefit eligibility for disability insurance; Requirements.-
Claimant eligible if:
He or she serves an eight-day waiting period; and
he or she has received at least $150 in base-period wages.
If an individual enters a hospital within the first seven days of a disability period on orders of a physician, health officer, or court, benefits begin with the first day of hospitalization. If a disability begins during a period of continuous unemployment within which the waiting period required by the Employment Security Act has been completed and if, but for the disability, an individual would be entitled to receive unemployment benefits, he or she will receive disability benefits from the first day of the disability, but the waiting period requirement does not apply to agricultural workers who become disabled during a continued period of unemployment.
These other limitations on eligibility also apply:
Claimant must be under care of a physician or authorized chiropractor.
Benefits are not payable during any disability period caused by or in relation to abortion, except in cases of abortion provoked for medical reasons or if complications arise as a result of abortion.
Benefits are not payable for any day of disability during which the worker rendered services in covered or uncovered employment, whether or not for compensation.
Benefits are not payable for disabilities caused by self-inflicted wounds or for disabilities received in the commission of an unlawful act.
A claimant is not eligible if he or she is receiving a pension, except when, after receiving such pension, the worker performs services in insured employment for at least 15 weeks.
No benefits can be paid to a claimant imprisoned as a dipsomaniac, drug addict, or sexual psychopath.
Benefits may not be paid during a disability period caused by an auto accident covered under the Automobile Accidents Social Protection Act.
A claimant is not eligible for an eight-week period if, within the previous 24 months, he or she committed a premeditated false representation to obtain benefits.
Disqualifications.- Restrictions on benefit payments are phrased as limitations on eligibility rather than disqualifications.
Disqualifications period.- Leaving suitable work voluntarily without good cause, discharge or suspension for misconduct connected with work, failure to apply for or accept suitable work-week in which disqualifying act occurred and until individual has returned to covered employment for at least four weeks and has earned wages equal to at least 10 times his or her weekly benefit amount. Persons undergoing vocational training or retraining with the approval of the Director and meeting the eligibility requirements of the Act may not be disqualified because of such training.
Labor dispute-duration.
Receipt of unemployment benefits under other law-period for which payments are made.
Making false statement or representation of fact or concealing material fact with intent to defraud for purposes of obtaining benefits, within 24 months preceding week in question-week in which determination of fraud is made and next 52 weeks, unless criminal penalty provisions have been applied instead.
Receipt of governmental or other pension under plan maintained or contributed to by base-period employer-weekly benefits reduced by amount of pension, proportionate to claimant's contribution to pension plan. Except for social security or railroad retirement benefits, no reduction unless service rendered or remuneration for such service affects eligibility for or amount of the pension.
No benefits are payable to professional athletes for periods between sport seasons if there is reasonable assurance that the individual will perform services in both such seasons.
No benefits are payable to an alien unless he or she has been legally admitted as a permanent resident or is otherwise permanently residing in the United States under color of law.
WHAT THE EMPLOYER MUST DO
Pay the standard rate.- 5.4%. Maximum rate is 5.4%.
New employers pay the rate assigned to them under the applicable rate schedule. The new employer's rate for 2007 is 2.9%. A new employer is eligible for experience rating after 12 months of liability for benefits.
Experience rating.- An employer's tax rate depends on its proportion of reserves on the computation date (June 30). An employer's proportion of reserves is the percentage ratio between the reserves and the average taxable wage paid by the employer during the last three years ending on the computation date. The proportion of reserves may be positive or negative and assigns the employer's rank in the rate schedule in effect for a year.
There are eight rate schedules in the experience-rating system, one of which is in effect for each year, depending on the balance in the Unemployment Fund as of December 31 immediately preceding the rate year.
When the fund balance is greater than $589 million multiplied by the adjustment factor (the product of the division of the total wages in covered employment for any calendar year ending December 31 by the total wages in covered employment for the year that ended 12/31/90), Schedule A is in effect. Schedule A ranges from 1.0% to 4.2% for positive-balance employers and from 4.4% to 5.4% for negative-balance employers, with new employers paying 2.7%.
When the fund balance as of December 31 is greater than $553 million times the adjustment factor, but less than $589 million times the adjustment factor, Schedule B, ranging from 1.2% to 4.3% for positive-balance employers and from 4.4% to 5.4% for negative-balance employers, with new employers paying 2.8%, is in effect.
When the fund balance as of December 31 is greater than $517 million times the adjustment factor, but less than $553 times the adjustment factor, Schedule C, ranging from 1.4% to 4.3% for positive-balance employers and from 4.4% to 5.4% for negative-balance employers, with new employers paying 2.9%, is in effect.
When the fund balance as of December 31 is greater than $481 million times the adjustment factor, but less than $517 million times the adjustment factor, Schedule D, ranging from 1.7% to 4.3% for positive-balance employers and from 4.4% to 5.4% for negative-balance employers, with new employers paying 3.0%, is in effect.
When the fund balance as of December 31 is greater than $445 million times the adjustment factor, but less than $481 million times the adjustment factor, Schedule E, ranging from 2.0% to 4.4% for positive-balance employers and from 4.5% to 5.4% for negative-balance employers, with new employers paying 3.1%, is in effect.
When the fund balance as of December 31 is greater than $409 million times the adjustment factor, but less than $445 million times the adjustment factor, Schedule F, ranging from 2.2% to 4.4% for positive-balance employers and from 4.5% to 5.4% for negative-balance employers, with new employers pay 3.2%, is in effect.
When the fund balance as of December 31 is greater than $370 million times the adjustment factor, but less than $409 million times the adjustment factor, Schedule G, ranging from 2.4% to 4.5% for positive-balance employers and from 4.6% to 5.4% for negative-balance employers, with new employers paying 3.3%, is in effect.
When the fund balance as of December 31 is less than $370 million times the adjustment factor, Schedule H, ranging from 2.5% to 4.5% for positive-balance employers and from 4.6% to 5.4% for negative-balance employers, with new employers paying 3.4%, is in effect.
Every employer except governmental employers must pay a special tax equal to 1.0% of taxable wages paid by it. However, those employers to whom a tax rate higher than 4.4% has been assigned must pay the difference between 5.4% and the assigned rate. 90% of the special tax is deposited into the Employment Opportunities Fund and 10% is deposited in the Administrative Expenses Fund.
On the computation date, an employer who owes contributions, penalties, interest or surcharges or who fails to submit the quarterly contribution and wage reports, is assigned a rate of the greater of 4.4% or the assigned rate.
For 2007, Schedule C is in effect. Rates for 2007, not including the special tax, may be determined from the following table:
Proportion of
Reserves (%):
|
Rate (%)
|
|---|
−20 or less
|
5.4
|
−18 but over −20
|
5.3
|
−16 but over −18
|
5.2
|
−14 but over −16
|
5.1
|
−12 but over −14
|
5.0
|
−10 but over −12
|
4.9
|
−8 but over −10
|
4.8
|
−6 but over −8
|
4.7
|
−4 but over −6
|
4.6
|
−2 but over −4
|
4.5
|
0.0 but over −2
|
4.4
|
2.0 but over 0.0
|
4.3
|
4.0 but over 2.0
|
4.1
|
6.0 but over 4.0
|
3.9
|
8.0 but over 6.0
|
3.7
|
10 but over 8.0
|
3.4
|
12 but over 10
|
3.2
|
14 but over 12
|
2.9
|
16 but over 14
|
2.6
|
18 but over 16
|
2.2
|
20 but over 18
|
1.9
|
Over 20
|
1.4
|
New employers
|
2.9
|
For Disability Insurance:
Employer contributions: Each covered employer makes contributions at a rate of 0.30% of the wages paid to workers for covered services up to a maximum of $9,000 during a calendar year.
Employee contributions: Each worker in insured employment makes contributions at a rate of 0.30% of his or her wages for covered services up to a maximum of $9,000 during a calendar year. The worker's contributions are withheld from his wages at the time paid, and if the employer fails to make the deduction, he himself becomes liable for the worker's contribution. The act specifically describes as “not unlawful” the payment of the worker's contributions by the employer. Benefits paid to agricultural or sugar mill workers are paid from public funds.
Each employer insuring through a private plan must pay three different assessments to the Disability Benefits Fund. The assessments, paid each year no later than the following March 31, are based on wages not in excess of the taxable wage base paid to employees covered by a private plan. Until such time as the assessments may be changed by regulation, they are: (1) for sharing in the cost of benefits to the disabled unemployed, a rate of 0.155%; (2) for administrative costs of the Disability Fund, a rate of 0.03%; and (3) for the disadvantage resulting to the Disability Fund because the more favorable risks are covered by private plans, the rate is .004% multiplied by the difference between 115 and the Index of Favorable Risk. If the Index of Favorable Risk is 115 or more, no assessment is levied.
DEADLINES
Unemployment insurance
Tax.- The Employer's Contribution Report, Form PR-UI-10, is due quarterly on or before the last day of the month following the close of each calendar quarter. If the due date falls on a Saturday, holiday or other day during which the employer is unable to make payment due to the fact that the Bureau offices are closed during normal working hours, contributions become due on the next working day. Returns received through the mail are deemed to have been received on the date shown by the postmark.
Failure to submit contribution reports subjects employer to penalties and a possible surcharge.
Wage.- Form PR-UI-10A, Employer's Quarterly Report of Wages Paid, is due quarterly at the same time as Form PR-UI-10, above.
Disability benefits
Employer’s Contribution Report, Form PR-UI-10, and Employer’s Quarterly Report of Wages Paid, Form PR-UI-10-A, must be filed on or before the last day of the month which follows the close of the calendar quarter for which the wages were paid. By September 30 of every year, each employer or administrator must file, in form prescribed by the Director, a report of experience under the private plan or plans for which it is responsible for the year ended the preceding June 30. Each self-insured plan is also required to submit such a report. Failure to submit reports to determine contributions within the prescribed time subjects employer to a penalty of 0.5% of the amount due, up to a maximum of $5, for each month or fraction thereof in which the omission exists. Failure to pay the contributions within 60 days following the date payment should have been made subjects employer to penalty of 5% of the contribution owed.
Where the worker was otherwise eligible for disability benefits but his employer paid him his regular full pay, the employer may receive the disability benefits that would otherwise have been paid to the worker.
Employers are required to reserve the job occupied by a worker at the time the disability began and to reinstate him when he is able to return to work if certain conditions are met.
ENFORCEMENT
The Puerto Rico Employment Security Act and the Disability Benefits Act are administered by the Bureau of Employment Security in the Division of Labor and Human Resources.
Contributions may be collected by the constraint proceedings used for the collection of property taxes, or by civil action brought in the name of the Secretary. Civil actions brought under this provision are heard in the superior court of the jurisdiction in which the employer has his principal place of business. An employer found in default must pay the costs of the proceeding.
The courts of the commonwealth are granted power to entertain actions to collect contributions, interest or penalties that have accrued under the unemployment laws of any state or the federal government.
Powers of the courts and appeal procedure vary with the type of civil action commenced. No suit, including an action for a declaratory judgment, is maintainable and no writ or process is issuable by a court if it has the purpose or effect of restraining, delaying or forestalling the collection of any contribution, interest or penalty. Any decision concerning the liability and collection of a contribution, once it has become a final decision, becomes binding on any future proceeding for refund or credit, insofar as the determination necessarily involves the issue of whether or not an employing unit was an employer or services performed constituted employment.
Appeals from administrative decisions on contributions and credits are made to the superior court in the jurisdiction in which the employer has his principal place of business or residence. Generally, a 15-day time limit, commencing with the date a determination was mailed to the employing unit's last known address, is allowed before the decision becomes final. No appeal from a jeopardy assessment may be had unless the employer first pays the assessment or establishes security for the sums owed. Appeal may also be taken from the superior court to the supreme court. A 30-day time limit is applicable. Note that an appeal to the Puerto Rico Supreme Court may not be taken in cases in which a deficiency is determined unless the aggregate amount of the deficiency is deposited in the secretariat of the court within the 30-day appeal period.
WHO TO CONTACT
The Puerto Rico Employment Security Act and the Disability Benefits Act are administered by the Bureau of Employment Security in the Division of Labor and Human Resources, 505 Munoz Rivera Ave., Hato Rey, Puerto Rico 00918. Telephone (787) 754-5262.
RECORDKEEPING
Every employing unit, whether or not subject to the Act, must keep true and accurate records for five years containing information and relative to periods of time prescribed by the Secretary. These records are subject to inspection, including inspection as to information with respect to persons who are or have previously performed services for the unit, by the Secretary or his representative. Any employing unit failing to keep required records is presumed to be an employer subject to the Act. Failure, without good cause, to make the necessary reports is penalized by a fine of $5 for each report or employee omitted. This penalty does not apply to reports to determine contribution rates, however.
POSTING
Employers are required to post and maintain an unemployment benefit poster.
PENALTIES
Failure to comply with a demand for information may be punished as contempt of the court involved. No person may be excused from appearing or producing records before the Secretary or his representative, or in obedience to a subpoena issued by them, on the ground that the testimony or evidence required may tend to incriminate him or subject him to a penalty or forfeiture. Having so pleaded, however, a person may not be prosecuted or put in jeopardy of penalty or forfeiture on account of the matter he was compelled to produce. This does not exempt the person pleading self-incrimination from prosecution and punishment for perjury committed while so testifying, however.
Interest and penalties.- If an employer fails to submit reports concerning contributions, he is subject to a penalty equal to 5% of the amount of contributions due for each month or fraction thereof in which the omission exists, up to a maximum of 25% of such amount, unless he demonstrates that the omission is due to circumstances beyond his control. Any employer who fails to pay the contribution determined within 60 days following the date on which payment should have been made is bound to pay, in addition to the interest and penalties imposed by the Act, a surcharge of 5% of the amount of contributions owed. These amounts are added to the contributions due and collected as part of the contributions.
Any employing unit that knowingly makes a false statement or representation or conceals a material fact so as to defraud an individual by reducing or preventing the payment of benefits which the individual would be entitled to receive, or to avoid becoming or remaining a covered employer or to avoid or reduce any contribution or other payment required of an employing unit by Puerto Rico or by any state, the federal or a foreign government, or who willfully fails to make contributions, reports, etc., as required, or fails to produce the required records, is subject to imprisonment of not more than one year or a fine of not more than $1,000, or both, for each false statement or representation or concealment of a material fact or day of refusal.
Refusal to comply in any way with a subpoena is punishable by imprisonment up to 30 days and/or fines up to $200. Under this provision, each day of refusal is a separate offense.
Violations of the Act or any of its rules, regulations, or orders that are not ascribed any particular penalty are punishable by fines up to $1,000 and/or imprisonment up to one year, each violation being a separate offense.
If contributions or payments in lieu of contributions are not paid in full on the due date, interest is assessed on any unpaid amounts at the rate of 1% per month or fraction of a month from that date until the payment is received.
Liens.- Assessment and lien are also available for collection of contributions. If an employer does not report timely, files an incorrect or insufficient report, or fails to pay any part of the contributions or interest due, the Secretary may either determine the sums due on the basis of submitted information or make an estimate of contributions due. If the Secretary feels the collection of any contributions or interest will be placed in jeopardy by any delay, he is authorized to give notice of assessment to the employer immediately, regardless of statutory due dates or the like.
In case of failure to pay an assessment of this nature, the employer's record will be placed on the judgment docket of the superior court of proper jurisdiction by the Secretary. Once entered in this manner, the amount of the assessment constitutes a lien upon the entire interest of the employer, legal or equitable, in any property, real or personal, tangible or intangible, located in that court's jurisdiction. Failure to pay an assessment is also punishable as contempt. Compensation authorities may be given the powers of marshals of the court to enforce a lien.
Claims for wages have priority of payment over those for contributions, interest or penalty under this law. Wages, as used here, however, does not include remuneration for executive or administrative officers of corporations, and covers only sums up to $250 for each worker that was earned within six months from the start of the formal action to collect or the date of an informal agreement to distribute an employer's assets. With this exception, claims for contributions, interest or penalties accrued and payable under the law are payable with full priority over any other claims, including claims for other contributions or debts due to the Commonwealth. Preference on court dockets is accorded actions of this type over any and all civil actions except the review of benefit decisions.
Successors may be liable for unpaid contributions, interest or penalties. Any individual or organization, whether or not an employing unit, that acquires the organization, trade or business of an employer is liable in an amount not to exceed the reasonable value of the entity acquired. This liability is a lien against the property or assets the successor has acquired and has priority over other similar claims. Upon request, the Secretary will furnish the successor a statement of the amount of contributions, interest and penalties due or accrued and unpaid by the employer as of the acquisition date. The amount of liability or of the lien on the successor may, in no event, exceed the liability disclosed on this statement. The successor must complete the acquisition before requesting a statement of this type.
No lien is valid against a person acquiring interest in the property or assets from the successor in good faith, for value and without legal notice of the lien. Similarly, no lien may be validly attached to a person who acquires personal property of an employer by means of a purchase in the usual course of his business, if the person did so in good faith and without having legal notice of the lien.
Bonds posted to guarantee performance of any kind of public or private work may be attached to cover unpaid taxes, penalties or interest due under the Act, whether or not the bonds contain a provision to this effect.
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