The employment contract can be terminated by both parties if due notice or payment in lieu of notice is given. Severance must be paid in case the employee has an indefinite term contract. Fixed term contracts don't have severance.

Steps:

1. Employer notifies employee of termination
2. Employer pays employee final pay with last payroll.
3. Employer sends email notifying employee of Unemployment Rights and benefit termination

Fixed term contract: no severance, but if terminated early may be liable for the remainder of the contract term if the contract is terminated without cause.

Indefinite term contract: An open-ended contract will trigger the provisions of the Unjustified Dismissal Act (“Act 80”) which requires “just cause” to terminate employment. If there is no “just cause” then severance will be owed to the employee, based on his/her highest salary in the last 3 years of employment, and his/her years of service. The applicable formula at this time is 3 months’ salary plus 2 weeks’ salary for every completed year of service, up to a cap of 9 months of severance. Notice is not required under Puerto Rico law, but may be required under the contract

In Puerto Rico, non-exempt employees (indefinite contract) are entitled to:

• 6 days the first year of employment
• 9 days after the first year of employment
• 12 days after the fifth year of employment
• 15 days after fifteen years of employment

Employees with a fixed term contract, are not entitled to paid time off, however is best practice to grant 6 days as indefinite contracts.

Employees documentation will be required by Coffee HR directly to employees

Process to onboard an employee in the country:

In Puerto Rico, Deel's affiliate will do the onboarding (documentation capture) for the employee. Coffee HR haan online onboarding process that will begin once the contract is signed on the Deel platform. This includes I-9 processing, tax form submissions, direct deposit, and signing handbook.

1. Is it necessary for the employee to be registered with Social Security before the start date? How much time it takes? No, but they must be in the process of registering
2. Is it required for the employee to go through a medical check before the employment starts?

Documentation required

1. New hire form
2. I-9 Form
3. Tax Id copy

Probation period is not mandatory. For indefinite contracts can raise up to 12 months, and for fixed term contracts probation period can last up to 9 months.