CalSavers Compliance for California Employers

Question: I am a small employer with 3 employees. Someone told me that if I don’t have a 401(k) for my staff, I’m supposed to register with CalSavers or else I could face penalties. Is this true?

Short Answer: If you don’t offer your employees a qualified retirement plan, then, yes, you do need to register with CalSavers. In fact, all covered employers with one to four employees were required to register with CalSavers by December 31, 2025, so you should register as soon as possible.

Below, we answer some of the frequently asked questions about this California-sponsored retirement program.

What is CalSavers?

The CalSavers Retirement Savings Program (CalSavers) is a state-sponsored program that helps private-sector employees save for retirement when their employer doesn’t offer a retirement plan. It gives workers an easy way to start saving, with little effort required, and has absolutely no cost to employers.

CalSavers is managed by a private financial services firm and overseen by a public board led by the State Treasurer. Participation by employees is completely optional. However, when an employer joins CalSavers, all employees are automatically enrolled and then must opt out if they don’t want to participate. Employees can choose to join or leave the program at any time.

Who is eligible for CalSavers and who is exempt?

CalSavers applies to employers of all sizes who don’t offer their own retirement plan. If your business employed an average of one or more California-based employees in the previous calendar year (at least one whom is age 18) and your company doesn’t sponsor a qualified retirement plan, then your business is required to register with CalSavers.

CalSavers does not apply to employers who offer a qualified retirement plan, including:

• 401(a) – Qualified Plan (including profit-sharing plans and defined benefit plans)
• 401(k) plans (including multiple employer plans or pooled employer plans)
• 403(a) – Qualified Annuity Plan or 403(b) Tax-Sheltered Annuity Plan
• 408(k) – Simplified Employee Pension (SEP) plans
• 408(p) – Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA Plan
• Payroll deduction IRAs with automatic enrollment

Religious, tribal, and government organizations are also exempt.

If I’m exempt, is there anything I need to do?

Yes! If you already offer a qualified retirement plan above and you have received a notice to register, then you need to notify CalSavers of your exemption on the employer portal.

What are my responsibilities as an employer participating in CalSavers?

A covered employer’s general obligations include:

• Registering for CalSavers,
• Setting up a payroll list to add employees,
• Making sure employees receive information about CalSavers,
• Calculating the deduction rate for each participating employee (note: the percentage will be shown on the employer’s account page),
• Deducting & submitting the employees’ contributions, and
• Ongoing maintenance of the payroll list (e.g., adding new employees within 30 days of hire or eligibility; removing former employees)

There are no employer fees or contributions.

How does CalSavers work?

CalSavers uses information from the employer to contact employees directly to inform them on how the program works, how to set up their account, and how to opt out if they wish. If an eligible employee takes no action within 30 days, they will be automatically enrolled in the program under the default savings settings.

Employers must submit employee contributions for each paycheck, within seven days of taking the deduction out of the participating employee’s paycheck.

If an employee wants to make changes to their account settings or opt out of participating, they can manage their account directly through the CalSavers website, mobile app, or by phone.

Which employees are eligible?

All employees of a participating employer are eligible if they are at least age 18 and have the status of an “employee” under California law. There are no minimum requirements based on hours worked or tenure with their employer.

Some employees don’t contribute to our qualified retirement plan. Do I need to enroll them in CalSavers?

No. CalSavers is only required for employers who do not offer a qualified retirement plan.

Are there penalties for non-compliance?

Yes. Employers may face penalties for missing their registration deadline or failure to upload employee information or submit employee contributions in the required timeframes.

After receiving notice of failure to comply, penalties can range from $250 to $500 per eligible employee.

Note: At the time of this article’s publication, CalSavers’ website states, “There’s still time to register and start running CalSavers before you are subject to financial penalties.”

Additional questions?

CEA members can call our subject matter experts at 800.399.5331 or email us at CEAinfo@employers.org.