July 3, 2024: Article updated to include information about the December 2024 registration requirement for employees who reported an average of five or more employees in 2023.
Soon, all California employers with at least one employee and who do not sponsor a qualified retirement plan will be required to facilitate their employees’ enrollment in the CalSavers Retirement Savings Program, including new hires within 30 days of hiring.
Nearly all employers in California, including dental practice owners, who have five to 50 employees and do not sponsor a retirement plan are already required by state law to enable CalSavers participation for their workers. CalSavers is the state’s Roth IRA voluntary retirement savings program initiated in 2019 for workers who do not have access to a retirement plan at work.
Legislation signed into law in August 2022 by Gov. Gavin Newsom expanded the registration requirement to include eligible employers with one to four employees. Unless these employers qualify for and request an exemption, they must either either establish a qualified payroll-deposit retirement savings program or register with CalSavers no later than Dec. 31, 2025.
Employers can register their workplace or request an exemption now.
Employee participation is optional, but employers must facilitate enrollment
CalSavers participation is optional for employees. They can choose not to participate in the program and to reduce or increase their payroll contribution, which is initially set at 3% of the worker’s annual salary or wages, but employers must facilitate initial enrollment and any ongoing payroll contributions for them.
The CalSavers FAQ for employers states, “All employees of a participating employer are eligible if they are at least age eighteen and have the status of an employee under California law. There are no minimum requirements based on hours worked or tenure with their employer.”
Exempt employers — those who employ only the business owner or who already provide an employer-sponsored plan as defined in the bill — should visit the CalSavers website to exempt their business as early as possible but no later than December 2025.
The new law only expands the program to the smallest employers; it does not make any procedural or other changes. Employers do not pay any fees for participating in the program, and they are prohibited from contributing to employee accounts.
Had an average of five employees in 2023? Register by Dec. 31, 2024
Employers with five or more workers who did not register with CalSavers or request an exemption by June 30, 2022, as CDA previously reported, are out of compliance.
Employers who reported having an average of five or more employees in 2023 must register for CalSavers by Dec. 31, 2024, unless they qualify for and request an exemption. These employers may have already received official registration information from the program by mail but, regardless, should visit the CalSavers website to either register or request an exemption.
Noncompliance can result in enforcement action, including financial penalties.
CDA members can log in to their account to view CDA’s CalSavers resource, which includes more background about the program, a step-by-step on the registration process plus frequently asked questions covering exemption, employers’ administrative duties and how they can and cannot assist employees with their accounts, what happens to an employee’s account if they leave employment and much more.