Does anyone know if workers in a Puerto Rican division of a US based company can participate in a Section 125 Plan?

Sources seem to say no, but need some quotable language.

What sources are those?

The Puerto Rico Dept of the Treasury issued a letter dated May 13, 1992 addressing when and under what circumstances cafeteria plan contributions would be subject to payroll taxation. That presupposes that employees in Puerto Rico may participate in a cafeteria plan.

Puerto Rico has its own tax code and now has a section 125 equivalent. I think you can have dual qualified 401(k) plans, but I don't think you can have dual qualified cafeteria plans. I think the Puerto Rican employees would need a separate plan, but this is not my best subject.