All you need to know about HR legal & taxes when expanding to US. We cover: hiring, visa, payroll, packages, sales & use tax, local taxes and annual filling.
US operations can get tricky because laws can be very different from one state to another, or even from one county to another.
Laws change quickly: the information below might be outdated by the time you read it. Always check with a professional.
- → HR
- 🛂 VISA / Immigration
- 📨 Offer letter key clauses
- 🧧 Employee Payroll, Compensation & Benefits
- Packages & Benefits
- Employer costs
- Packages examples
- Medical benefits explained to the CEO
- 📕 Employee Handbook
- → TAXES
- 💼 Sales Tax & Use Tax (VAT equivalent)
- 💼 Local taxes (such as CFE / taxe fonciere etc)
- 💼 Annual filings ("liasse fiscale")
- → Sales legal (terms and conditions, GDPR, CCPA)
→ HR
🛂 VISA / Immigration
As a preliminary step you can get a B1 visa to explore, but it's usually not recommended as it can interfere with the visa requests below.
Book a XAnge Office Hours with Isabelle Marcus, founder of Columbus Consulting :
Get all VISA type and information here :
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🎙️ Préparer son départ et s'installer aux US par Dolead) and by Fabrice, Americas Director @ Odoo (
🎙️Bonnes pratiques et échecs lors de l'ouverture du marché U.S.)📨 Offer letter key clauses
In the US a signed offer letter is enough to strike an employment relationship. It usually serves as a contract.
Click on ▶️ to open the items listed below :
At will employment and the 2 weeks practice🧧 Employee Payroll, Compensation & Benefits
We recommend getting a PEO to help you handle HR, Payroll and Benefits. (Want to know what a PEO is?)
Packages & Benefits
Benefits include (click on ▶️ to open the items listed below) :
Employer costs
Overall you should factor 20-30% on top of the gross salary to cover payroll taxes and benefits. It will depend on your benefit contribution strategy.
Employer costs include (click on ▶️ to open the items listed below) :
Packages examples
PTO → Some companies prefer to blend vacation and sick days under a US wide "Paid Time Off (PTO)". You just have to make sure it covers at least the most favorable sick leave requirements. In this case packages range from 3 to 4 weeks. 5 weeks is very generous. More info here :
Medical benefits explained to the CEO
Cost of healthcare in general (without insurance) is 10x what you know in France (ie. a routine consult base cost is $250).
Even the best health coverage will not be as good as french "Sécurite Sociale".
2 main systems:
PPO is the closest to what we know in France. You go to the doctor you want. If the doctor is in the 'network', you get a good coverage (ie. you only have to pay a small 'copay'). If it's out of network, you have to pay a portion (usually up to 40% of the bill).
HMO is a system whereby you can only go to a specific hospital, which offers everything you need and is operated by your insurer. It's usually cheaper than a PPO. The main advantage is that everything is in the same place, you get access to specialists easily if needed. But if you get really sick and you want a specific doctor that's not part of their system, you're screwed.
📕 Employee Handbook
Make sure you have an employee handbook / employee manual describing your company policies. A PEO would always offer one.
This is particularly important to have an employee handbook you can refer to when you have to deal with behavioral or performance issues.
Here is an example of what Trinet employee handbook looks like (note it's very detailed, a handbook can be much shorter / straight to the point) →
Here is the Odoo Employee Handbook :
→ TAXES
Define with your CPA and/or Finance & Admin person who is responsible for each category of taxes below.
Mind the PEO trap: when using a PEO it's easy to assume they will handle everything for you. Unfortunately, your PEO will only handle the payroll obligations. When you hire someone in a new state, always check thoroughly your local registration & tax obligations.
💼 Sales Tax & Use Tax (VAT equivalent)
It's important to understand sales tax as your product may not sell at the same price everywhere.
You have the obligation to collect sales taxes from your customers (ie register and report / pay sales tax on a regular basis) if all of the following are conditions are met:
- your product / service is taxable in the state / county the sales takes place
- your company has a fiscal nexus in the state / county.
- your client doesn't provide you with a sales tax exemption certificate.
Facts:
- Services and food are usually not taxable
- Goods are almost always taxable
- Software and services used to not be subject to sales tax, but as the states need more money and economy go digital, more and more states have made the move to tax software and sometimes the services that go with it.
- An example for SaaS https://www.chargebee.com/blog/saas-sales-tax/
Use tax
- Use tax is a weird concept when you come from Europe. Think of it as spontaneous payment of owed sales tax (a kind of "autoliquidation de la TVA"):
- if you buy a pricey good (goods are almost always subject to sales tax), that' something you should keep in mind
Nexus → a Tax nexus defines your tax liability, known in some countries as a ‘tax registration threshold’. Definition varies county by county, which makes it difficult to track (sometimes having a sales travelling more than twice a year there is enough to define a nexus in the area).
💼 Local taxes (such as CFE / taxe fonciere etc)
- In each county / state where you have a nexus, you should register to do business (get a business license) and pay local taxes, ie mainly:
- property taxes
- sales / use taxes
- business taxes
- Make sure someone is responsible for registering and filing all those reporting's. You can ask your CPA or your accountant, just make sure it doesn't fall in between
💼 Annual filings ("liasse fiscale")
- They're handled by your CPA, with the help of your bookkeeper
- They include Federal and State Corporate tax, 1099s, and stock option related filings
→ Sales legal (terms and conditions, GDPR, CCPA)
Terms and conditions : Have a lawyer write your US terms and conditions (CGV).
GDPR : Overall GDPR’s protection scope covers consumer information with broader and more comprehensive restraints than the CCPA.
CCPA : There are only a few instances where CCPA goes further, such as including information linked at the household or device level. CCPA also does not restrict a business’ ability to collect, use, or sell consumer information that has been deidentified or reaggregated, unlike GDPR. However, both require technical controls to prevent reidentification after pseudonymization.
Comparing privacy laws: GDPR v. CCPA ☝