2023 Laws of Puerto Rico › TITLE TWENTY-NINE - Labor (§§ 1 — 3004) › PART III - Social Security (§§ 611 — 726f) › Chapter 47 - Employment Security Act (§§ 701 — 717) › § 708 - Taxes

(a) Definitions.— Unless otherwise deduced from the context, the terms expressed hereinbelow shall have the following meanings for purposes of this section:
(1) Experience system.— Means the method whereby the tax rate to be paid by each employer shall be computed based on his/her individual experience with regard to unemployment, taxes, and wages paid.
(2) Year of experience.— Means the twelve (12)-month period immediately preceding the computation date.
(3) Computation date.— Means June 30 of each year, except for the first year of effectiveness of this act, which shall be December 31, 1991.
(4) Taxable wages.— Means the total taxable wages paid by an employer during the year of experience that ends on the computation date.
(5) Applicable benefits.— Means the total benefits paid to a claimant charged to an employer’s account during the year of experience.
(6) Nonapplicable benefits.— Means the total benefits paid to a claimant not charged to the employer’s account during the year of experience.
(7) Tax rate.— Means the tax rate fixed on the basis of experience. The effective date of the rates shall be January 1, of the year following the computation date.
(8) Adjustment factor.— Means the product of the division of the total wages for covered employment on any calendar year that ends December 31, by the total wages for covered employment on the calendar year that ended December 31, 1990.
(9) Employer.— Shall have the meaning stated in this chapter.
(10) Business.— Means a business or part thereof.
(11) Taxes.— Shall have the meaning given to such term by Section 3306(g) of the Internal Revenue Code of 1986.
(12) Knowingly.— Means to have actual knowledge of or to act with deliberate ignorance of or crass disregard for the imposed prohibition.
(13) Violate or attempt to violate.— For purposes of this section, includes without it being limited to an attempt to evade, misrepresent, or wrongfully or deliberately fail to reveal facts.
(14) Person.— Shall have the meaning given to such term in Section 7701(a)(1) of the Internal Revenue Code of 1986. In addition the term “person” includes tax return preparer.
(15) Tax return preparer.— For purposes of this section, is a person who prepares any tax return for profit, or who employs one or more persons who prepare any tax return imposed by this chapter for profit, or any refund claim for taxes imposed by this chapter. For purposes of this definition, filling out a significant part of the tax return or refund claim shall be considered as preparation of the refund or refund claim.
(b) Payment of taxes.— Taxes with regard to wages for employment shall accrue and shall be paid by each employer with regard to each calendar year in which he/she is subject to the provisions of this chapter. Said taxes shall be due and payable by each employer to the Secretary of the Treasury for the Fund according to the regulations adopted by the Secretary, and they shall not be deducted, neither in whole nor in part, from the wages of the persons employed by said employer.
(1) Commencing January 1, 1979 and until December 31, 1984, each employer shall pay taxes equal to two point ninety-five percent (2.95%) of the wages paid by him during each calendar year with respect to services specified in paragraphs (A)—(H) of § 702(k)(1) of this title, which shall be covered into the Unemployment Fund established by § 710 of this title.
(2) On and after January 1, 1985, each employer shall pay taxes equal to five point four percent (5.4%) of the first seven thousand dollars ($7,000) in wages paid by him to each employee during each calendar year with respect to services specified in paragraphs (A), (C), (D), (F)—(H) of § 702(k)(1) of this title which shall be covered into the Unemployment Fund established by § 710 of this title.
(3) On and after January 1, 1985, each employer shall pay contributions equal to two point ninety-five percent (2.95%) of the first seven thousand dollars ($7,000) in wages paid by him to each employee during each academic year with respect to services specified in § 702(k)(1)(E) of this title, which shall be covered into the Unemployment Fund established by § 710 of this title. Provided, That any employer who pays wages for services specified in § 702(k)(1)(E) of this title, who is covered by the Federal Unemployment Tax Act, shall also pay two point forty-five percent (2.45%) of the first seven thousand dollars ($7,000) in wages paid by him to each employee during each calendar year.
(4) On and after January 1, 1988, each employer shall pay taxes equivalent to one point five percent (1.5%) of the first seven thousand dollars ($7,000) in wages paid by him to each worker during each calendar year on account of services specified in § 702(k)(1)(B) of this title which must be paid into the Unemployment Fund established by § 710 of this title.
(5) On and after January 1, 1992, each employer shall pay taxes based on the experience system as provided in subsection (f) of this section, on the first seven thousand dollars ($7,000) in wages paid by him/her to each employee during each taxable year. Said taxes shall be covered into the Unemployment Fund established by § 710 of this title.
(c) Penalties and surcharges.—
(1) Penalty for failure to render reports to determine the contribution.— Any employer who fails to render a report or statement to determine the contribution, within the term prescribed by the Secretary pursuant to this chapter shall be bound to pay in addition to the contribution imposed, and as a part thereof, a penalty equal to five percent (5%) of the contribution due per calendar month or fraction thereof in which said omission exists, up to a maximum of twenty-five percent (25%), unless it is shown that the omission was due to circumstances beyond the employer’s control. These circumstances shall be determined by the Secretary by regulations within sixty (60) days following the date this act takes effect. The regulations established for this paragraph shall also apply to clause (2) of this subsection and § 709(a) of this title.
(2) Surcharge for not paying the contribution on time.— Any employer who fails to pay the determined contribution within sixty (60) days following the date on which payment of the same should have been made shall be bound to pay, in addition to the interest and penalties imposed by this chapter, a surcharge of five percent (5%) of the amount of contributions in arrears. At the Secretary’s discretion, he may be exempted from this surcharge, after it is shown that the contributions were not paid on time due to circumstances beyond the employer’s control.
Provided, That the penalty and surcharge imposed by this subsection shall be collected as part of the contribution at the same time and in the same manner as the latter, unless the contribution has been paid prior to the discovery of the omission, in which case the amount so added shall be collected in the same manner as the contribution.
(d) Financing of benefits paid to employees in nonprofit organizations.— Benefits paid to employees of nonprofit organizations shall be financed pursuant to the provisions of this subsection. For the purposes of this subsection, a nonprofit organization is an organization or group of organizations as described in § 702(k)(1)(F) of this title.
(1) Obligation to pay taxes and option for payment of reimbursement in lieu of taxes.— Any nonprofit organization which, pursuant to § 702(i)(3) of this title, is or shall be subject to this chapter on or after January 1, 1972, shall pay taxes under the provisions of subsection (b) unless it opts to pay to the unemployment fund created by § 710 of this title, pursuant to this clause, an amount equal to the sum of regular and additional benefits plus half of the extended benefits attributable to services rendered to said organization which have been paid to claimants with regard to weeks of unemployment that commence during the effectiveness of said option.
(2) Payment of reimbursements in lieu of taxes.— Payments of reimbursements in lieu of taxes shall be made in accordance with the provisions of this clause including either (A) or (B):
(A) At the end of each calendar quarter, or at the end of any other period as determined by the Secretary, the Director shall bill each nonprofit organization or group of such organizations which has elected the method of payments of reimbursement in lieu of contributions for an amount equal to the full amount of regular and additional benefits plus one-half of the amount of extended benefits paid during such quarter or other prescribed period that is attributable to service in the employ of such organization.
(B) Each nonprofit organization that has elected the method of payments of reimbursement in lieu of contributions may request permission to make such payments as provided in this paragraph. Such method of payment shall become effective upon approval by the Director.
(i) At the end of each calendar quarter, or at the end of such other period as determined by the Secretary, the Director shall bill each nonprofit organization for an amount representing one of the following:
(I) For calendar year 1972, two point seven percent (2.7%) of the taxable payroll for the calendar year 1971.
(II) For years after December 31, 1972, such percentage of its total payroll for the immediately preceding calendar year as the Secretary shall determine. Such determination shall be based each year on the average benefits costs attributable to service performed in the employ of nonprofit organizations during the preceding calendar year.
(III) For any organization which did not pay wages throughout the four (4) calendar quarters of the preceding calendar year, such percentage of its payroll during such year as the Secretary shall determine.
(ii) At the end of each taxable year, the Secretary may modify the quarterly percentage of payroll thereafter payable by the nonprofit organization in order to minimize excess or compensate insufficient payments.
(iii) At the end of each taxable year, the Secretary shall determine whether the total of payments for such year made by a nonprofit organization is less than, or in excess of, the total amount of regular and additional benefits plus one-half (1 / 2) of the amount of extended benefits paid to individuals during such taxable year based on wages attributable to service in the employ of such organization. Each nonprofit organization whose total payments for such year are less than the amount so determined shall be liable for payment of the unpaid balance to the fund in accordance with paragraph (C) of this clause. If the total payments exceed the amount so determined for the taxable year, all or a part of the excess may, at the discretion of the Secretary, be refunded from the fund or retained in the fund as part of the payments which may be required for the next taxable year.
(C) Payment of any bill rendered under paragraph (A) or (B) of this clause shall be made not later than thirty (30) days after such bill was mailed to the last known address of the nonprofit organization or was otherwise delivered to it, unless there has been an application for review and redetermination in accordance with paragraph (E) of this clause.
(D) Payments made by any nonprofit organization under the provisions of this subsection shall not be deducted or deductible, in whole or in part, from the remuneration of individuals in the employ of the organization.
(E) The amount due specified on any bill from the Director shall be conclusive on the organization unless, not later than fifteen (15) days after the bill was mailed to its last known address or otherwise delivered to it, the organization files an application for reconsideration by the Director or appeals before the Secretary. If the petition of reconsideration is filed with the Director and his determination is adverse, the organization may file a petition for review before the Secretary within fifteen (15) days after the notice of redetermination is mailed by the Director. The Secretary shall promptly review and reconsider the amount due specified in the bill, and shall thereafter issue a redetermination and notify the organization. Any such redetermination shall be conclusive on the organization unless, not later than thirty (30) days after the notice of redetermination was mailed to its last known address or otherwise delivered to it, the organization files an appeal to the part of the Court of First Instance for the jurisdiction in which the organization has its principal place of business, setting forth the grounds for the appeal. The decisions of the Court of First Instance in relation to any proceeding under this subsection shall be subject to the provisions of § 709(f) of this title.
(F) Payments owed under the method of financing by refund of payments in lieu of taxes shall be subject to the same interest, penalties, and surcharges which apply to taxes owed pursuant to §§ 708(c) and 709(a) of this title.
(3) Authority to terminate elections.— If any nonprofit organization subject to the method of payments of reimbursement is delinquent in making such payments under clause (2) of this subsection, the Director may terminate such organization’s election to make payments of reimbursement in lieu of contributions as of the beginning of the next calendar year, and such termination shall be effective for two (2) calendar years.
(4) Assignment of benefit costs.— Each employer who avails him/herself of the financing method of reimbursement of payments in lieu of taxes shall pay to the Secretary for the fund, the corresponding amount of the regular benefits plus half of the extended benefits paid to the employees for services rendered to said employer as provided in § 708(f) of this title.
(e) Financing of benefits paid to employees in institutions of higher learning, hospitals and other agencies or instrumentalities of the Commonwealth or its political subdivisions.— Benefits paid to employees for services rendered, described in § 702(k)(1)(B) of this title shall be financed pursuant to the provisions of this subsection. For the purposes of this subsection, an institution of higher learning is an institution described in § 702(y)(2) of this title, and a hospital is an institution described in § 702(z) of this title.
(1) Subject to the payment of taxes and option for reimbursement in lieu of taxes.— Any institution of higher learning or any hospital which, pursuant to § 702(i)(2) of this title is, or shall be subject to this chapter on or after January 1, 1972, or any agency or instrumentality, which, pursuant to clauses (1), (2), and (4) of § 702(i) of this title is, or will be covered on and after January 1, 1978, shall pay taxes under the provisions of subsection (b) of this section, unless they opt to pay to the Unemployment Fund created by § 710 of this title an amount equal to the sum of regular and additional benefits plus half of the extended benefits attributable to services rendered to said organization which have been paid to claimants with regard to weeks of unemployment that commence during the effective period of said option. Provided, That the amount to be paid for unemployment weeks that commence after January 1, 1979, shall be equal to the sum of regular, additional and extended benefits.
(2) The provisions of paragraphs (A), (B), (C), (D) and (E) of subsection (d)(1), paragraphs (A), (C), (D), (E), and (F) of subsection (d)(2), and subsections (d)(3), (d)(4) and (d)(5) of this section, regarding nonprofit organizations, shall apply to institutions of higher education and hospitals operated by the Government of the Commonwealth, by the governments of its political subdivisions or by any of their instrumentalities, or of both. These provisions shall also apply to those agencies or instrumentalities of the Commonwealth or its political subdivisions.
(3) Application of payments under the fixed tax method.— On and after July 1, 1988, payments made by an employer under the fixed tax method, as that term is defined in clauses (1), (2), and (4) of § 702(i) of this title shall be applied to their corresponding quarter.
(f) System of experience.—
(1) On and after January 1, 1992, and for each subsequent quarter, the Director shall keep a separate account for each employer that shall reflect his/her individual experience regarding unemployment risks.
(A) All taxes paid by the employer shall be credited to the account.
(B) Applicable benefits shall be debited to the account which shall be charged as follows:
(i) Fifty percent (50%) to the claimant’s last employer.
(ii) The remaining fifty percent (50%), among all employers for the basic period in proportion to the wages earned by the claimant in said basic period.
(iii) The employer’s account shall not be debited for fifty percent (50%) of the partial benefits and extended benefits nor the additional benefits for closings, nor benefits paid based on claims defrayed in full with federal funds.
(2) On and after January 1, 1992, each employer shall pay taxes based on the tax rate fixed on the computation date. Tax rates shall be determined by using the proportion of reserves system as it is described in clause (4) of this subsection. Provided, That any adjustment to the amount charged to an employer’s account made after the computation date shall not alter the tax rate that has already been fixed.
(A) The tax rate for a new employer shall be that which is indicated in the last line of the corresponding table for that year, which appears in this subsection below until at least twenty-one (21) months have elapsed from his/her effective date as a covered employer up to the computation date. No employer who, within the nine quarters following the closing date of a business, begins to operate a new a business of the same nature, shall be deemed to be a new employer.
(B) Every employer who, on the computation date commencing on June 30, 1993, owes taxes, penalties, interest or surcharges or who fails to render the quarterly statements, shall be fixed a tax rate of four point four percent (4.4%) of the taxable wages, or that which results from his/her experience, if greater.
(3) The Director shall give prompt notice of the tax rate fixed for the employer and the way it was computed. He/she shall likewise notify the employer of any charge for benefits paid or to be paid that could affect his/her reserves.
(4) Each employer’s tax rate shall depend on his proportion of reserves on the computation date. The proportion of reserves shall be the percentum obtained from the division between the reserve and the average taxable wage paid by the employer during the last three years ending with the computation date, except for what is provided in paragraphs (A) and (B) of clause (2) of this subsection. The proportion of reserves may reflect a positive or negative balance. For the purposes of this computation, an employer’s reserves shall be the taxes paid without payment of interest, surcharges and penalties, less the benefits that are applicable to the employer’s account.
(A) For the effects of computing the proportion of reserves as of December 31, 1991, the taxes paid by the employer, benefits charged and taxable wages for the three years preceding said date, shall be considered.
(B) The tax rate that shall be fixed for each employer shall be determined by his/her proportion of reserves pursuant to the table that is used in a given year from among those below:
Tax Rate Proportion of Reserves (%) A B C D E F G H -20 or less 5.4 5.4 5.4 5.4 5.4 5.4 5.4 5.4 -18 but over -20.0 5.3 5.3 5.3 5.3 5.4 5.4 5.4 5.4 -16 but over -18.0 5.2 5.2 5.2 5.2 5.3 5.3 5.4 5.4 -14 but over -16.0 5.1 5.1 5.1 5.1 5.2 5.2 5.3 5.3 -12 but over -14.0 5.0 5.0 5.0 5.0 5.1 5.1 5.2 5.2 -10 but over -12.0 4.9 4.9 4.9 4.9 5.0 5.0 5.1 5.1 -8.0 but over -10.0 4.8 4.8 4.8 4.8 4.9 4.9 5.0 5.0 -6.0 but over -8.0 4.7 4.7 4.7 4.7 4.8 4.8 4.9 4.9 -4.0 but over -6.0 4.6 4.6 4.6 4.6 4.7 4.7 4.8 4.8 -2.0 but over -4.0 4.5 4.5 4.5 4.5 4.6 4.6 4.7 4.7 0.0 but over -2.0 4.4 4.4 4.4 4.4 4.5 4.5 4.6 4.6 2.0 but over 0.0 4.2 4.3 4.3 4.3 4.4 4.4 4.5 4.5 4.0 but over 2.0 4.0 4.1 4.1 4.1 4.2 4.2 4.3 4.4 6.0 but over 4.0 3.7 3.8 3.9 3.9 4.0 4.0 4.1 4.2 8.0 but over 6.0 3.4 3.6 3.7 3.7 3.8 3.9 4.0 4.1 10.0 but over 8.0 3.1 3.3 3.4 3.5 3.6 3.8 3.9 4.0 12.0 but over 10.0 2.7 2.9 3.2 3.3 3.4 3.6 3.7 3.8 14.0 but over 12.0 2.5 2.6 2.9 3.0 3.1 3.2 3.3 3.4 16.0 but over 14.0 2.2 2.4 2.6 2.8 2.9 3.0 3.1 3.2 18.0 but over 16.0 1.9 2.1 2.3 2.5 2.6 2.7 2.8 2.9 20.0 but over 18.0 1.5 1.7 1.9 2.1 2.2 2.4 2.5 2.7 Over 20.0 1.0 1.2 1.4 1.7 2.0 2.2 2.4 2.5
Tax Rate for New Employers 2.7 2.8 2.9 3.0 3.1 3.2 3.3 3.4
The table to be used in a specific year shall be determined by multiplying the balance in the Unemployment Fund as of December 31 immediately preceding the computation date, by the adjustment factor as defined in § 708(a)(8) of this title. Provided, That during the first year of effectiveness of the experience system, employers shall pay taxes to the Unemployment Fund according to the rates established in Table A.
(C) When the balance in the Unemployment Fund as of December 31 of any year is greater than five hundred eighty-nine million dollars ($589,000,000) multiplied by the adjustment factor, employers shall pay taxes to the Fund the following year according to the rates established in Table A.
(D) When the balance in the Unemployment Fund as of December 31 of any year is greater than five hundred fifty-three million dollars ($553,000,000) multiplied by the adjustment factor, but less than five hundred eighty-nine million dollars ($589,000,000) multiplied by the adjustment factor, employers shall pay taxes to the Fund the following year according to the rates established in Table B.
(E) When the balance in the Unemployment Fund as of December 31 of any year is greater than five hundred seventeen million dollars ($517,000,000) multiplied by the adjustment factor, but less than five hundred fifty-three million dollars ($553,000,000) multiplied by the adjustment factor, employers shall pay taxes to the Fund the following year according to the rates established in Table C.
(F) When the balance in the Unemployment Fund as of December 31 of any year is greater than four hundred eighty-one million dollars ($481,000,000) multiplied by the adjustment factor, but less than five hundred seventeen million dollars ($517,000,000) multiplied by the adjustment factor, employers shall pay taxes to the Fund the following year according to the rates established in Table D.
(G) When the balance in the Unemployment Fund as of December 31 of any year is greater than four hundred forty-five million dollars ($445,000,000) multiplied by the adjustment factor, but less than four hundred eighty-one million dollars ($481,000,000) multiplied by the adjustment factor, employers shall pay taxes to the Fund the following year according to the rates established in Table E.
(H) When the balance in the Unemployment Fund as of December 31 of any year is greater than four hundred nine million dollars ($409,000,000) multiplied by the adjustment factor, but less than four hundred forty-five million dollars ($445,000,000) multiplied by the adjustment factor, employers shall pay taxes to the Fund the following year according to the rates established in Table F.
(I) When the balance in the Unemployment Fund as of December 31 of any year is greater than three hundred seventy million dollars ($370,000,000) multiplied by the adjustment factor, but less than four hundred nine million dollars ($409,000,000) multiplied by the adjustment factor, employers shall pay taxes to the Fund the following year [according] to the rates established in Table F.
(J) When the balance in the Unemployment Fund as of December 31 of any year is less than three hundred seventy million dollars ($370,000,000) multiplied by the adjustment factor, employers shall pay taxes to the Fund the following year according to the rates established in Table H.
(g) Transfer of individual unemployment risk experience.— Notwithstanding other provisions of this chapter, the following shall apply to transfers of individual unemployment risk experience and the designation of tax rates:
(1)
(A) If an employer transfers his/her business, commercial enterprise, or part thereof to another employer, and both employers (at the time of the transfer) substantially share the property, administration, or control thereof, then the unemployment risk experience attributable to the transferred business or commercial enterprise shall be transferred to the employer who acquired the business object of the transfer. The tax rates for both employers shall be once again computed and shall begin to govern immediately after the date of the transfer of the business or commercial enterprise.
(B) If after the transfer of experience is made pursuant to paragraph (A) of this clause, the Director finds that the true purpose of the transfer of the business or commercial enterprise was to obtain a lower tax rate, the accounts in the experience system of the employers involved in the transfer shall be combined to become one account and said account shall be designated with the highest (standard) tax rate under the law.
(C) The transfer of some or all workers from one employer to another shall be deemed to be a commercial enterprise or business transfer if as a result of said transfer the employer who made the transfer stops operating the commercial enterprise or business due to the transfer of the workers and said commercial enterprise or business is operated by the employer to whom said workers were transferred.
(2) If a person is not an employer under this chapter at the time of the acquisition of the business or commercial enterprise from an employer, the unemployment risk experience of the acquired business shall not be transferred to said person if the agency finds that said person acquired that business solely or primarily for the purpose of obtaining a lower tax rate. But instead the highest tax rate under this chapter shall be designated to said person for a sufficient period of time so that his/her tax rate may be computed in accordance with his/her unemployment risk experience under this chapter. When determining whether the business was acquired for the purpose of obtaining a lower tax rate, the agency may employ objective factors to include the cost of the acquired business or commercial enterprise, whether the person remained as head of the acquired business or trade, the time during which the business or commercial enterprise was kept, or whether a substantial number of new employees were contracted to perform duties unrelated to the activities carried out in the business before the acquisition.
(3) If a person or employer simultaneously acquires the business or part of a business of two (2) or more employers with different tax rates, the tax rate of the successor after the date of the transfer until the end of such taxable year and until the latter acquires sufficient experience so that his/her tax rate be computed in accordance with his/her unemployment risk experience under this chapter, shall be the sum of the rates determined by the agency under subsection (f) of this section. At the time of the acquisition, this rate shall apply to the predecessor employer who among the parties in the acquisition has the highest payroll (taxable wages) in the calendar quarter that ended immediately preceding the date of the transfer, but it shall not be lower than the sum of the rates determined by the agency under subsection (f) of this section.
(4) When a person or employer acquires the individual unemployment risk experience of an employer or person, the acquirer shall assume the position of the predecessor and continue with the employer account of the predecessor, and the acquirer as well as the predecessor shall jointly and severally be responsible for any sum on account of taxes, interests, or penalties unpaid by the predecessor.
(5) In those cases whereby a part of the business or commercial enterprise is transferred, the acquirer shall assume the position of the predecessor and receive shares equal to the acquired portion of the unemployment risk experience account of the predecessor. The predecessor shall continue to be responsible for the payment of taxes, for reimbursements in lieu of the payment of taxes, for interest and for penalties. Both the acquirer and the predecessor shall jointly and severally be responsible for the obligations in proportion to the transferred portion of the business or commercial enterprise.
(6) Any person who contracts with a taxpaying employer so that such person may obtain the work force of said employer and who provides him/her, for a fee, workers for the insured employer, at the effective date of the contract, shall be assigned to the account of the taxpaying employer. Said person shall keep said account apart and separate from any other taxable account of the person, and shall identify the same as stipulated by the agency. During the term of the contract, the taxable account shall be deemed to be the person’s account for the purposes of this chapter. The workers provided by the taxpaying employer and any other worker provided by said person to the taxpaying employer shall appear in a detailed wages report under the taxable account and said person shall pay any tax imposed under the tax rate computed for said account.
(7) If any person or employer fails to register or to offer accurate and complete information as needed to be registered as employer or to determine his/her insured status under this chapter, shall be deemed prima facie evidence of the intention to obtain a tax rate in violation of this section. An employer or person who violates this subsection shall incur in a civil penalty of one thousand dollars ($1,000) or the payment of the sum of all taxes to the unemployment insurance evaded by the employer or person or the sum that the employer or person attempted to evade during the taxable year, whichever is higher. For these effects, the term “person” shall have the meaning given to such a term in subsection (a) of this section.
(8) A natural or juridical person may not aid, orient, advise, or urge an employer to transfer his/her employees or payrolls in violation of this section. The persons who violate this clause shall be subject to the penalties provided in § 714(c) of this title.
(9) A determination made under this subsection shall be made within the next five (5) years after the facts that motivated the determination have occurred.
(10) The Secretary and the Director are hereby authorized to conduct audits to verify compliance of the law in the cases stated under this section, without their being subject to the criteria provided in the audit procedures as to the selection of employers. Any person other than an employer who makes an acquisition as provided by clause (2) of this subsection and who changes the nature of the acquired business or commercial enterprise, shall be audited automatically, in order to verify any violation of this chapter.
(11) For purposes of this section, the procedures to identify cases in which there may be a presumption that the transfer of employees to another employer is made in an attempt or for the purpose of obtaining a lower tax rate shall be established. The rules shall include those cases that constitute practices commonly known as SUTA Dumping, pursuant to Section 303(k)(1)(E) of the Social Security Act, SSA.
(12) This section shall be construed and applied so that it complies with the minimum requirements contained in any handbook or regulations published by the United States Department of Labor.
(h) Special tax.— As of January 1, 1992, any employer, subject to the payment of taxes pursuant to the provisions of this chapter, with the exception of the agencies and instrumentalities of the Government and its political subdivisions, shall pay a special tax equal to one percent (1%) of the taxable wages paid by him; Provided, That those employers to whom a tax rate higher than four point four percent (4.4%) has been fixed, shall pay the difference between five point four percent (5.4%) and said rate. This special tax shall be distributed as follows:
(1) Ninety percent (90%) shall be covered into the Employment Opportunities Development Fund, established by § 711c of this title.
(2) Ten percent (10%) shall be covered into the Administrative Expenses Fund established by § 711d of this title.
(i) Finality of the determination.— A determination made by the Director under § 708 of this title shall be considered final unless the party that is entitled to be notified thereof requests a reconsideration within the term of fifteen (15) days counting from the date the notice was sent by mail or otherwise to his/her last known address; Provided, That if the Director’s decision were adverse, the injured party may appeal to the Secretary within fifteen (15) days following the date the decision was mailed to his/her last known address.
(j) Appeals.— The Secretary shall appoint one or more Examining Officials pursuant to § 713(d) of this title, to hear and decide appeals of the determinations and redeterminations of the Director in accordance with this section.
(1) Any party entitled to receive notice of any determination as provided in this section may file an appeal against the determination issued by the Director before an Examining Official within the term specified in subsection (i). A reasonable opportunity shall be granted promptly to all the parties for the holding of a fair hearing.
(2) The Examining Officials shall be empowered to:
(A) Take oaths and statements;
(B) issue summons, require the introduction of reports, books, papers and documents that are deemed necessary for the exercise of their functions;
(C) receive pertinent evidence and rule upon it;
(D) take depositions or have them taken;
(E) hold hearings and regulate the course thereof;
(F) provide procedural action or similar matters, and
(G) recommend decisions to the Secretary.
It shall be the duty of the Examining Officials, once the parties have submitted a case for their consideration, to prepare a report to the Secretary. The report shall contain a summary of all evidence received, the facts, the applicable statutory section and the decision recommended.
(3) The Secretary’s decision shall be issued, in writing, within ninety (90) days after the hearings have been concluded, and a copy thereof shall be furnished to all parties, including the Director.
(4) The decision of the Secretary shall be final unless one of the parties requests its judicial review by filing a petition to such effects at the Court of First Instance Part of the jurisdiction where the employer or employment unit has its place of business within a thirty (30)-day term counting from the notice of the decision. The petitioning party shall notify the filing of the petition for review to all the other parties within the term to request the review.
(5) The decision of the Court of First Instance may be appealed before the Supreme Court and shall be processed pursuant to § 709(f) of this title.
(k) Report of salaries.— Every employer, those that pay taxes under this section as well as those that make reimbursement payments in lieu of taxes, shall submit a quarterly report of the salaries paid to their employees, to the Secretary of Labor and Human Resources of Puerto Rico, as he/she may establish it. The report shall include the following information: name of the employee, salary paid to the employee, social security number of the employee; the name, address and state and federal identification number of the employer who pays the salary to the employee.
History —June 21, 1956, No. 74, p. 328, § 8; June 25, 1958, No. 97, p. 226, §§ 1, 2; Dec. 22, 1960, No. 1, p. 1, § 9; June 8, 1962, No. 27, p. 54, § 4; June 24, 1971, No. 85, p. 257, § 6; June 15, 1972, No. 16, p. 374, § 7; Aug. 9, 1974, No. 21, Part 2, p. 646, § 4; June 30, 1975, No. 111, p. 329, § 5; June 23, 1976, No. 18, p. 730; June 24, 1977, No. 101, p. 228, § 4; Dec. 13, 1977, No. 2, p. 602, § 3; July 26, 1979, No. 4, p. 924, § 6; May 25, 1985, No. 15, p. 49, § 1; July 15, 1988, No. 102, p. 424, § 4; Aug. 9, 1991, No. 52, § 1; July 9, 1992, No. 16, § 1; Jan. 13, 2002, No. 28, § 1; Sept. 16, 2005, No. 114, §§ 3, 4, retroactive to July 1, 2005.