Back in 2016, California passed legislation requiring employers with 5 or more employees to offer a qualified retirement plan or register with the state option: CalSavers.  CalSavers officially launched in 2019 as part of a phased rollout over a three year period. The first phase required employers with more than 100 employees to register, followed by those with more than 50 employees and lastly, employer with 5 or more employees. The most recent registration deadline of the program passed on June 30, 2021, which affected employers with more than 50 employees. Employers who missed this deadline should contact CalSavers and register as soon as possible to avoid penalties. Employers with 5 or more employees must register for CalSavers by June 30, 2022.

CalSavers is a retirement savings program sponsored by the State of California. California implemented CalSavers to help ensure Californian workers have a path to financial security in retirement.  This program is designed to give employers an easy way to help their employees save for retirement without having to pay any fees or other costs. Importantly, employers have no fiduciary liability and minimal employer responsibilities.

Employers can register through the CalSavers website ( or file an exemption on the same site if they already offer a qualified retirement plan such as a 401(k). After registering, employers are required to add employees within 30 days of completing the registration.

Employees will have the option to join or opt-out of CalSavers. If they join, a standard deduction of 5% from gross pay will be automatically deducted from their payroll with an annual automatic escalation of 1% until it reaches 8%. Employees, however, will also have the option to select their own contribution rate and rate of increase.

The California Franchise Tax Board is empowered to fine noncompliant employers $250 per employee. After 180 days, the penalty increases to $500 per employee. Thus, it is important employers take steps to either adopt a private retirement plan and file for an exemption or register with CalSavers.