In 2022, California enacted SB-1126, expanding the CalSavers mandate to include employers with at least one employee. Beginning in 2025, eligible California employers with 1–4 California-based employees must register or certify an exemption by December 31, 2025. Sole proprietors and businesses with no employees other than the owners remain exempt.
New businesses without a retirement plan must register within 24 months of reaching the employee threshold. Employers who already offer a retirement plan are exempt.
CalSavers accounts are Roth IRAs funded solely by employee payroll contributions. Employers cannot contribute. You must enroll all eligible employees (age 18+) unless they opt out. Short-term, part-time, and household employees are included.
Once registered, employers must:
- Upload an employee roster to CalSavers.
- Begin collecting and remitting contributions within 30 days of employee notification.
Default contributions start at 5% and increase by 1% annually, up to 8%. Employees may adjust rates or opt out anytime.
Noncompliance penalties are $250 per employee, increasing to $500 after 180 days. However, employers are not liable for employee participation decisions or investment performance.
To register or certify an exemption, visit: CalSavers Registration
If you have any questions, please visit the CalSavers FAQ page by clicking here or contact our tax team at [email protected].