San Juan failed to remit employee deductions to health insurance, IRS and others

On December 11, 2012, the Centro de Periodismo Investigativo reported that the Municipality of San Juan withheld employee payroll deductions and did not transfer them to agencies and providers: Retirement, Treasury, Social Security, State Insurance Fund, unemployment and health plan, among others.

It owed the Retirement Systems Administration alone $16,841,023.20; Treasury $8,440,914.03; Mapfre (health insurance) about $2.6 million ($2,632,124 in the breakdown); the Commonwealth Employees Association $659,843.82; the IRS $48,222.47; and smaller amounts to ORHELA and unemployment. Labor attorney Ruy Delgado Zayas warned that failing to remit is illegal and can draw fines, and that the official in charge of remittance may face personal IRS liability. Héctor Ferrer, adviser to the incoming administration, said non-transfer violates the law and that agencies can sue or fine.

Beyond the municipal deficit — outgoing ~$47 million vs incoming ~$190 million — payables as of November 19, 2012 exceeded $108 million; the incoming team estimated suppliers at ~$180 million. Short- and long-term debts to government agencies >$34 million. The transition report also listed more than 90 days overdue on much of $75.8 million in payables (72%). Debts to AAA, PREPA, ASG, Red Cross, Hogar CREA and trash/health contractors appear in the same schedule. Withholding without remittance ≠ criminal sentence; these are debts and possible administrative or civil sanctions.

Source: Centro de Periodismo Investigativo. https://periodismoinvestigativo.com/2012/12/san-juan-no-pago-las-aportaciones-de-sus-empleados-a-seguro-medico-irs-y-otros/