California Employers: Retirement Plan Mandate
If you’re a small or mid-size employer in California and don’t currently offer a retirement plan, there’s an important compliance deadline you shouldn’t ignore.
California law requires all employers to either
Offer a qualified retirement plan such as a 401(k), SEP IRA, or SIMPLE IRA, or
Register with CalSavers, the state’s retirement savings program for employees.
Failing to take action can result in penalties per employee, and those fines can grow quickly.
📅 CalSavers Registration Deadlines
The state phased in the requirement by employer size. Here’s where things stand:
Key CalSavers Deadlines:
1–4 employees: Register by December 31, 2025 [Upcoming]
5+ employees: Deadline was June 30, 2022
50+ employees: Deadline was June 30, 2021
100+ employees: Deadline was September 30, 2020
If you have five or more employees and haven’t registered or offered your own plan, your business is already considered out of compliance.
💸 Penalties for Non-Compliance
The state enforces CalSavers with financial penalties:
$250 per eligible employee if you don’t comply within 90 days after receiving a notice.
An additional $500 per employee if you remain noncompliant after 180 days.
That means for a business with 10 employees, penalties could reach $7,500, and that’s completely avoidable by registering or offering your own plan.
🌎 States with Similar Mandates
California is not alone. As of 2025, 13 states have implemented similar “auto-IRA” or retirement savings mandates. These include:
Oregon (OregonSaves)
Illinois (Secure Choice)
New York (NY Secure Choice)
Maryland (MarylandSaves)
Colorado (Colorado SecureSavings)
Connecticut, Delaware, Maine, New Jersey, Vermont, Virginia, and Washington
Other states are currently exploring or launching pilot programs.
Many of these state programs share similar requirements: if an employer does not offer a qualified retirement plan, they must register with the state’s program and facilitate payroll deductions for employees.
For employers operating in multiple states, it’s important to track each state’s deadlines and registration process to stay compliant across jurisdictions.
✅ What Employers Should Do Now
Check if you’re exempt.
You’re exempt if you already offer a qualified retirement plan.
You must register if you don’t.
Register with CalSavers.
Go to CalSavers.com to set up your account and add employees.
The process is simple and takes less than 15 minutes.
Notify employees.
CalSavers is employee-funded, meaning contributions come from their paychecks.
Employees can choose to participate or opt out at any time.
Stay compliant going forward.
Once enrolled, employers must keep employee information up to date and submit payroll deductions each pay period.
💡 Why It Matters
Offering a retirement savings option isn’t just about compliance. It helps you
Stay competitive when recruiting and retaining employees
Support your team’s long-term financial wellbeing
Avoid state fines and administrative headaches later
With the final CalSavers deadline for 1–4 employee businesses coming December 31, 2025, now is the best time to prepare.
The bottom line:
California wants every worker to have access to a retirement plan. Whether you register with CalSavers or set up your own plan, acting early protects your business and supports your employees’ future.
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