San Diego, located on the southern coast of California, is one of the most vibrant and diverse business hubs in the United States. Known for its biotech industry, defense presence, cross-border trade with Mexico, and thriving tourism sector, San Diego combines a highly educated workforce with strategic proximity to global markets.
The city is home to top research institutions like the University of California, San Diego (UCSD) and major defense contractors, making it an attractive destination for companies hiring in healthcare, technology, and international trade. Its location along the U.S., Mexico border also makes it a gateway for global commerce and talent mobility.
For companies seeking to expand in 2025, San Diego offers a unique blend of innovation, culture, and lifestyle appeal, though employers must also navigate California’s progressive labor regulations and the region’s competitive job market.
How to Hire in San Diego Easily in 2025
Employers entering San Diego can hire in two primary ways:
- Establishing a U.S. entity in California, registering with federal and state authorities, and managing HR compliance and payroll directly.
- Partnering with an Employer of Record (EOR), which allows companies to hire employees in San Diego without setting up a local entity. The EOR manages contracts, benefits, payroll, and compliance, while the business oversees the employee’s day-to-day responsibilities.
Key steps in the hiring process include:
- Drafting compliant job descriptions aligned with California labor standards.
- Registering for payroll taxes at federal and state levels.
- Offering competitive benefits to attract top professionals in biotech, defense, and technology.
- Leveraging local universities, recruitment agencies, and cross-border talent networks.
Why Hire in San Diego? The Benefits of Hiring in San Diego
Strategic Location
San Diego is strategically located along the U.S.–Mexico border, making it a vital hub for international trade and cross-border collaboration. With Port of San Diego and San Diego International Airport, the city offers direct access to Pacific Rim markets and global supply chains. Its proximity to Tijuana also allows companies to leverage binational labor and manufacturing opportunities.
Highly Educated Workforce
San Diego is home to prestigious institutions such as UCSD, San Diego State University, and research centers like the Scripps Research Institute. These institutions produce top talent in biotechnology, engineering, medicine, and business, making the city one of the leading sources of skilled professionals in the U.S.
Innovative Ecosystem
San Diego is a global leader in biotech, defense, clean energy, and telecommunications. The city has a growing startup ecosystem supported by venture capital, incubators, and research-driven partnerships. For employers, this means access to cutting-edge talent and resources.
Lifestyle and Talent Attraction
San Diego’s mild climate, beaches, and quality of life make it an attractive location for employees. While the cost of living is high, the city’s lifestyle and professional opportunities help employers recruit talent nationally and internationally.
Legal Requirements for Hiring Employees in San Diego
Employers in San Diego must comply with federal labor laws and California’s employee-focused regulations, which are among the strictest in the country.
Employment Contracts
California is an “at-will” employment state, meaning either the employer or employee can terminate the relationship at any time without cause, provided the termination does not violate anti-discrimination or labor laws. Written contracts are not mandatory but are advisable to define compensation, duties, and benefits.
Working Hours and Overtime
The standard workweek in San Diego is 40 hours. California law requires overtime pay of 1.5 times the hourly rate for hours worked beyond 40 per week or 8 per day, and double time for hours worked beyond 12 in a day. Employers must also provide meal and rest breaks.
Probation Periods
Probationary periods are not required by law in California but are commonly applied, typically lasting 90 days.
Termination of Employment
Although California follows the at-will model, the state imposes strict anti-discrimination, retaliation, and employee rights protections. Employers must document reasons for termination carefully to avoid wrongful dismissal claims. Severance pay is not legally required but is often offered in competitive sectors to protect reputation and goodwill.
Taxation and Social Security Contributions in San Diego
Employers hiring in San Diego must comply with both federal and California state-level payroll taxes.
1. Individual Income Tax (IIT)
California imposes one of the highest state income tax rates in the U.S., ranging from 1% to 13.3% depending on earnings. Employees also pay federal income tax, which ranges from 10% to 37%. Employers must withhold both.
2. Employer Contributions to Social Insurance
Employers contribute to several mandatory programs:
- Social Security: 6.2% of wages (matched by employees).
- Medicare: 1.45% of wages (matched by employees).
- Federal Unemployment Tax (FUTA): 0.6% on the first $7,000 in wages after credits.
- California State Unemployment Insurance (SUI): Employer rates vary by experience.
- Employment Training Tax (ETT): 0.1% of the first $7,000 in wages.
- State Disability Insurance (SDI): Employees contribute, with employer responsibility for withholding.
3. Contribution Bases
Social Security contributions are capped at the federal wage base (about $168,600 in 2025). Medicare has no cap, though high earners must pay an additional 0.9% surtax on wages above $200,000.
Work Permits and Other Requirements for Hiring Foreign Workers in San Diego
San Diego’s proximity to Mexico and its global industries attract many foreign professionals. Employers hiring non-U.S. citizens must comply with federal immigration regulations.
- Visa Sponsorship: Common visa categories include H-1B (specialty occupations), L-1 (intra-company transfers), and O-1 (extraordinary ability). Sponsorship requires proving that the position cannot easily be filled locally.
- Labor Condition Application (LCA): For certain visas, employers must file an LCA with the Department of Labor to ensure fair wages and workplace protections.
- E-Verify: Many California employers use E-Verify to confirm new hires’ work eligibility.
- Health and Background Checks: Some visa categories require background verification and health screenings.
Current Trends and Top Recruitment Strategies in San Diego
San Diego’s hiring environment is competitive, particularly in life sciences and defense. Effective strategies include:
- University and Research Partnerships: Collaborating with UCSD, SDSU, and research centers provides direct access to top graduates and innovators.
- Biotech and Defense Recruitment: Employers must highlight innovation, stability, and long-term growth to attract talent in these high-demand sectors.
- Cross-Border Opportunities: San Diego’s proximity to Tijuana allows companies to build binational teams, leveraging cross-border skills and operations.
- Diversity and Inclusion: San Diego has a multicultural workforce, and inclusive practices are essential to attract candidates.
- Hybrid and Remote Work: Many professionals expect flexibility, and companies offering remote options remain more competitive.
Hiring Skilled Workers vs. Entry-Level Talent in San Diego
Hiring Skilled Workers
Skilled professionals in biotech, defense, and healthcare often expect robust benefits and professional development opportunities. Employers should emphasize training, advancement, and company culture to attract them.
Hiring Entry-Level Talent
With multiple universities and research centers, San Diego provides a steady supply of graduates. To attract young professionals, employers should focus on mentorship, internships, and structured training programs, while also promoting work-life balance.
Competitive Benefits in San Diego
Benefits play a central role in attracting employees in California’s competitive labor market. Common offerings include:
- Health, dental, and vision insurance
- 401(k) retirement savings with employer matching
- Paid vacation, sick leave, and parental leave
- Wellness programs, including gym memberships and mental health support
- Tuition reimbursement and professional training
- Flexible or hybrid work arrangements
- Stock options or equity, especially in biotech and tech companies
Hiring Solutions for Foreign Companies in San Diego
International businesses can hire in San Diego through three primary models:
Independent Contractors: Flexible but risky if misclassified, as California enforces strict rules on independent contractor status.
Establishing a U.S. Entity: Provides direct control but requires incorporation, tax registration, and compliance with California’s complex labor regulations.
Employer of Record (EOR): The most efficient option for foreign companies. An EOR manages payroll, contracts, benefits, and compliance, allowing the employer to focus on business growth while maintaining compliance with federal and state laws.
Trust INS Global to Hire in San Diego Today
San Diego is one of the most dynamic hiring destinations in the United States in 2025. With its strengths in biotech, defense, cross-border trade, and technology, the city offers unmatched opportunities for employers across industries.
At the same time, California’s complex labor regulations and competitive hiring environment can make expansion challenging. That’s where INS Global can help.
Our Employer of Record (EOR) services in San Diego simplify hiring, managing compliance, payroll, and HR administration on your behalf. This allows you to focus on building your team and growing your business with confidence.
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