Act 148 of June 30, 1969, as amended, known as the Christmas Bonus Act, requires employers to pay an annual bonus to each employee who meets the criteria.

Employees hired before January 26, 2017, are eligible to receive the annual Christmas bonus if they work seven hundred hours or more during the twelve-months ended September 30 of the current year.

The statutory annual Christmas bonus in Puerto Rico will range between $300 and $600.

Currently, employers with twenty (20) employees or more must pay qualifying employees 3% of the first $20,000 paid to each employee, or $600.

Employers with less than twenty (20) employees must pay a bonus of 3% of the first $10,000 paid to each employee, or $300.

Employees hired by small and medium-sized businesses (PyMEs by their Spanish acronym), as defined by the Law to Support Microenterprise, Small and Medium Merchants, are eligible to receive the annual Christmas bonus if they work nine hundred (900) hours.

A PyMEs is any business that generates less than ten million ($10,000,000) in annual gross revenue for the year ended September 30, or any business that contracts less than fifty (50) employees during such period.

Unless a waiver is granted, the Puerto Rico Christmas bonus must be paid between November 15 and December 15 of each year to avoid a penalty.

The total of the amounts paid for Christmas bonus shall not exceed 15% of the net annual profit of the employer for the twelve-month period ended September 30 of the year the Christmas bonus is paid.

The employer may request an exemption from the payment of Christmas bonus for that year if the total bonus exceeds fifteen percent of net annual profits. The employer must submit to the Secretary of Labor and Human Resources a balance sheet and a profit and loss statement, duly certified by a Certified Public Accountant, for the twelve-month period ended September 30 of the current year. This statement must be submitted by November 30 of the year to which the bonus corresponds.

If the fiscal year of the employer that requests the exemption does not end on September 30, the balance sheet and profit and loss statement required may correspond to the fiscal year of the business. The Department of Labor and Human Resources has the authority to investigate the financial situation of the employer that requests the exemption.

In addition to Christmas bonus, Puerto Rico employees are also entitled to other fringe benefits, as recently amended by Act 41-2022.