New Regulation Adopted to Administer Unemployment Insurance

New Regulation or Official Guidance

Author: Erika Berríos-Berríos, Member — Littler Puerto Rico

On November 8, 2018, Puerto Rico’s Department of Labor and Human Resources published the Regulation to Administer the Unemployment Insurance Program, which implements Puerto Rico’s Employment Security Act. The new regulation, which became effective on December 8, 2018, implements the changes made in weekly benefit amounts for employees, revises partial payment plan requirements, and extends the time for employer appeals of tax deficiency determinations. Employers are advised to review the new regulations to benefit from the extended deadlines and more lenient debt payment plans.

Treasury Department Changes Tax Reporting on Act 80 Payments During Tax Year 2018

New Regulation or Official Guidance

Authors: Elizabeth Perez-Lleras, Capital Member & Ana Maria Bigas-Kennerley, Special Counsel — Littler Puerto Rico

On October 22, 2018, the Puerto Rico Department of the Treasury issued Publication 18-03, revising tax reporting obligations on certain severance payments for tax year 2018, which must be reported by January 31, 2019. The new guidance eliminates double reporting and provides that “compensation or severance pay received by an employee by reason of dismissal, without the need to determine just cause thereof, up to a maximum amount equal to the severance pay that the employee may receive pursuant to Act 80”, which is excluded from the employee’s gross income, will be reported for both Puerto Rico income (as exempt salaries) and FICA taxes (as wages) on a single form.