Guide to Hiring in North America
Understand the employment laws, visas, social security, and tax essentials for North American country 3 in one go, with in-depth coverage by nation.
Overview of North American Expansion
North America is one of the most fragmented regions for employment regulations: most U.S. states follow at-will employment, but California and New York impose heavier obligations; H-1B visa lottery outcomes are uncertain; Canadian provincial employment standards vary significantly, with Quebec requiring French language compliance; and Mexico mandates severance pay of 3 months' wages plus 20 days per year. NAZAR supports Employer of Record services, benefits compliance, and payroll processing across all U.S. states, Canadian provinces, and Mexico.
North America Employment Costs and Policy Index
All 3 countries and regions in North America now have dedicated landing pages featuring hiring cost overviews, visa pathways, social security breakdowns, and FAQs—optimized for direct search engine indexing.
United States
PopularEmployer social security contribution: approx. 10.0% · Minimum monthly salary: approx. 5,000 USD
Most states follow at-will employment; no federal paid leave mandate; state sick leave and benefit requirements vary widely.
Canada
Employer payroll tax approx. 9.0% · Minimum monthly salary approx. 4,500 CAD
Employment standards vary by province; annual leave ranges from 2 to 3 weeks based on tenure; termination requires notice or pay in lieu of notice.
Mexico
Employer Social Security ~30.0% · Minimum Monthly Salary ~25,000 MXN
Probation period: 30-180 days; Annual leave starts at 12 days and increases annually; Severance pay: 3 months + 20 days/year.
Key Considerations for Hiring in North America
- Total U.S. FICA contribution is 7.65%, plus federal/state unemployment insurance and state workers' compensation.
- Misclassification of exempt vs. non-exempt employees is a high-frequency compliance risk in the U.S.
- Canadian CPP employer contribution is approximately 5.95%, EI is approximately 2.37%; additional workplace safety and health insurance taxes apply in each province.
- In Mexico, the Aguinaldo (Christmas bonus) and PTU (profit sharing) are both legal obligations.
Common Questions for Expanding to North America
Can a U.S. entity hire U.S. employees?
Yes. Under the Employer of Record (EOR) model, a U.S.-based EOR signs the contract and assumes employer responsibilities while your company retains day-to-day management control. This structure also supports visa applications such as H-1B and L-1.
Where do employment cost differences vary across U.S. states?
State income tax (0-13.3%), state unemployment insurance rates, workers' compensation rates, and additional benefits and notice requirements in states like California, New York, and Washington significantly impact overall employment costs.