Beginning January 1, 2026, all employers even those with just one California employee will be required to offer a retirement savings plan or enroll in the state-run CalSavers program.
This mandate is designed to expand access to retirement savings for employees across the state. For business owners, it’s important to understand what this means and how to stay compliant.
What Is CalSavers?
CalSavers is a state-sponsored Roth IRA program that allows employees to contribute directly from their paychecks.
Employers are not required to contribute or manage investments. Their only responsibility to employees is to facilitate payroll deductions.
Who Must Participate
Starting in 2026, employers with one or more employees must do one of the following:
- Offer a qualified retirement plan, such as a 401(k), SEP IRA, or SIMPLE IRA.
- Register for CalSavers and enroll eligible employees.
Failure to comply may result in penalties to the business owner ranging from $250 to $500 per employee.
- Already Have a Plan?
If your business already offers a qualified retirement plan, you don’t need to join CalSavers. However, you must certify your exemption through the CalSavers website. The exempt employers are government entities, religious and tribal organizations.
- Visit CalSavers.com and select Employers – Register or Exempt
- Enter your FEIN and CA payroll tax number from the EDD. An access code was mailed to employers or you can request a new one.
- Submit your exemption certification to confirm compliance.
Why This Matters?
Even if you already have sponsored a company retirement plan, failing to file your exemption could result in unnecessary notices or fines.
Taking a few minutes now to complete the exemption process ensures your business remains in good standing when the mandate takes effect.