CalSavers Mandate for California Businesses

Don’t Miss the Deadline: Enroll in CalSavers by December 31, 2025 

What is CalSavers?  

CalSavers is a state-sponsored retirement savings program designed to help California workers save for retirement. By the end of 2025, all employers are required to offer retirement plans to their employees.  Employers can set up their own retirement plans or join CalSavers.  

CalSavers accounts are Roth IRA accounts and are subject to the contribution and participant income limits applicable to all other Roth IRA accounts. Employers are prohibited from making any contributions to these accounts, which are funded solely through the employee’s payroll contributions. 

Who Needs to Register for CalSavers?  

Currently, California employers with five or more employees and no retirement program are required to register with CalSavers. However, there are exceptions, including:  

• Sole proprietors, self-employed individuals, and businesses with only owner-employees are exempt.  

• Businesses that are already offering a retirement plan are also exempt.  

By December 31, 2025, all California employers are required to set up their own retirement plan or join CalSavers as long as they have employee(s). 

New businesses that don’t offer a retirement plan must register with CalSavers within 24 months of the employer becoming an eligible employer (e.g., having five California W-2 employees). 

What are the Employer’s Responsibilities? 

If you’re required to register, here’s what you need to do:  

1. Register with CalSavers: Create an employer account on the CalSavers website. 
2. Provide Employee Information: Submit an employee roster to CalSavers. You must enroll each employee unless they opt-out.  
3. Enrollment: CalSavers will contact the employees directly. The law does not provide any exceptions for short-term or part-time employees. Household employees are counted toward the employee threshold by their first paycheck issued 30 days after the employee notification. Household employees are counted toward the employee threshold.
4. Payroll Deductions: You must collect, remit, and report contributions for each payroll period. An employee’s initial default contribution rate is 5% the first year the employee is enrolled, increasing by 1% each year, up to 8%.  

Employees choose how their money is invested and have the option to: 

• Opt-out at any time; or 

• Pay lower or higher contribution rates. 

Employers can register in the CalSavers program or certify an exemption for businesses here.  

Penalties for Non-Compliance  

Employers who fail to comply with the program requirements after receiving a notice of noncompliance are subject to a $250 per-employee penalty. The penalty is increased to $500 per employee if the employer does not comply within 180 days. 

Employers are not liable for employees' decisions to participate in the program, their investment decisions, or the performance of those investments. 

Need More Information on the CalSavers Mandate?  

If you have any questions or need further assistance, please contact our team using the form below.