California's CalSavers Retirement Savings Program is a mandatory state-run retirement savings plan for employers who don't sponsor a qualified retirement plan. Under California law, any employer with one or more W-2 employees and no existing retirement plan must either register with CalSavers or offer their own plan. Registration deadlines have passed for businesses with five or more employees, and the final deadline-December 31, 2025-applies to employers with 1 to 4 employees.
CalSavers requires no employer contributions, no fiduciary obligation, and no ongoing administrative burden beyond setting up payroll deductions. Employers simply register, upload employee information, and facilitate payroll deductions through their payroll system. Employees are automatically enrolled at 5% (unless they opt out), with automatic increases up to 8%, and can manage their accounts directly with CalSavers. The state handles recordkeeping, communication, and investment management.
Importantly, noncompliance carries penalties: employers may be fined $250 per eligible employee if they don't comply within 90 days of receiving a notice, and an additional $500 per employee after 180 days. Employers should also be aware that independent contractors are not eligible, and only W-2 employees age 18 or older qualify for the program.
To stay compliant, employers should assess whether they already offer a qualified retirement plan such as a 401(k). If not, they must register with CalSavers or face possible enforcement actions. Registration can be completed online at CalSavers.com, and many payroll providers offer direct integration to streamline the process. Now is the time for California employers to take action, avoid penalties, and ensure compliance with the state mandate.
