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CalSavers Program Expanding for Small Employers


On August 26, 2022, the Governor of California signed Senate Bill No. 1126 (“S.B. 1126”) into law, amending California’s CalSavers Retirement Savings Program (“CalSavers”).  In general terms, CalSavers automatically enrolls eligible California employees in ROTH Individual Retirement Accounts if their employer does not provide a qualified retirement plan.  CalSavers requires eligible employers to facilitate the program by registering with CalSavers, providing employee information to CalSavers, and remitting employee contributions to CalSavers.

CalSavers currently applies to eligible employers with five or more employees.  The CalSavers requirements for employers took effect in three phases:  (1) September 30, 2020, for eligible employers with more than 100 employees;  (2) June 30, 2021, for eligible employers with more than 50 employees; and (3) June 30, 2022, for eligible employers with five or more employees.

As amended by S.B. 1126, CalSavers will expand to eligible employers with one or more eligible employees by December 31, 2025.  Accordingly, California employers with less than five employees may need to carefully consider the following questions:

  • Will you be subject to CalSavers, as amended by S.B. 1126?  In other words, are you an eligible employer with eligible employees, as defined under the CalSavers rules?
  • When do CalSavers requirements take effect for employers with less than five employees? As noted above, S.B. 1126 calls for compliance by December 31, 2025.  However, S.B. 1126 also grants the CalSavers Retirement Savings Board authority to extend the deadline.  Therefore, small employers may want to pay close attention to any applicable CalSavers deadlines announced in the next few years.
  • If you will be subject to CalSavers, would you rather offer a different qualified retirement plan?  Employers are exempt from CalSavers if they provide an employer-sponsored qualified retirement plan (e.g., a 401(k) Plan). 

The failure to comply with CalSavers may result in penalties of up to $750 per eligible employee for continued noncompliance.  Earlier this year, the CalSavers Retirement Savings Board announced that CalSavers began imposing these penalties in January 2022.



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