Act No. 148 of June 30, 1969, as amended, requires that employers pay bonuses to
all employees who have worked more than 700 hours during the 12-month qualifying
period starting on October 1 of each year and ending on September 30 of the
following year (“qualified employees”).
Employers with up to 15 employees have to pay their qualified employees a bonus
equal to 3.00% of the employee’s earned wages during the qualifying period, up
to $10,000 of wages (maximum bonus $300). Employers with 16 or more employees
have to pay their qualified employees a bonus equal to 6.00% of the employee’s
earned wages during the qualifying period, up to $10,000 of wages (maximum bonus
$600). The total amount of bonuses required to be paid by an employer will not
exceed 15% of its profits derived during the qualifying period.
Act No. 148 also requires that bonuses are paid to employees between December 1
and December 15 of the current year. An alternate payment period could be
applicable provided that the employer and employees agree to it in writing, the
payment date is before December 31 of the current year, and the change in
payment date is notified to the Department of Labor and Human Resources before
November 30 of the current year.
According to regulations of the Department of Labor and Human Resources of
Puerto Rico , an employee’s wage means all remuneration earned by a person for
his/her services, including but not limited to, the base salary, commissions,
vacation and sick leave payments. However, it does not include any amount
received under unemployment insurance and disability insurance.
Employees in agricultural activities, domestic activities, charitable
institutions, and the government are excluded from the application of Act No.
Employees covered by a collective bargaining agreement will receive their bonus
as set by the agreement as long as it matches or exceeds the bonus they would
have received under Act No. 148. If the bonuses under the collective bargaining
agreement are lower than those under Act No. 148, employers must pay the
necessary amount to match the bonus required by Act No. 148.
If the bonus is not paid in the period prescribed by law or the alternate
payment period, when applicable, employers will have to pay as bonus to their
employees 1.5 times the bonus, if the payment is made within 6 months after the
expiration of the due date, and 2 times the bonus, if the payment is made more
than 6 months after the due date.
Act No. 148 provides that employers in a net loss position or whose earnings are insufficient to cover the required Christmas bonus as provided by law, can request a full or partial exemption. In order to request a full or partial exemption, employers are required to submit to the Department of Labor of Puerto Rico reviewed financial statements duly certified by a Puerto Rico certified public accountant.
The requirements for filing the reviewed financial statements with the Department of Labor of Puerto Rico are the following:
- Due date for filing the reviewed financial statements is November 30th.
- Compiled financial statements will not be accepted.
- The period covered by the reviewed financial statements will be from October 1 until September 30th.
The employer should file Department of Labor Form NNT-BN-21 with the reviewed financial statements. The
Department of Labor shall also request additional information in order to grant the exemption. In the event that the
bonus amount exceeds 15% of the net profits of the employer, it must then apportion the 15% of the net profits
between the employees in proportion to what would correspond to each in the absence of such limitation. The employer may choose to pay the total amount of the bonus even if it exceeds 15% of the profits.