Employer Reminder: California Employers Without Employee Retirement Plans Must Offer State Retirement Program
Employer Reminder: California Employers Without Employee Retirement Plans Must Offer State Retirement Program

Beginning as early as June 30, 2020, California employers with 5 or more California-based employees not already offering an employer-sponsored retirement plan will have to begin offering a retirement savings program, either through the private market or by facilitating access to CalSavers, the state-run program.

The CalSavers program, established under SB 1234 in 2012, is intended to assist the estimated 7.5 million California employees without employer retirement savings plans. A pilot program was undertaken in late 2018, and beginning July 1, 2019, eligible employers of all sizes can register through the CalSavers website. Mandatory compliance is phased-in over time and will depend on the size of the employer.

Specifically, employers with more than 100 employees not already offering a retirement plan will have until June 30, 2020 to register. Employers with more than 50 employees will be required to register by June 30, 2021, and those with 5 or more employees have until June 30, 2022 to register. However, the state encourages eligible employers of any size to register at any time, regardless of their registration deadline, at https://www.calsavers.com/.  Self-employed and “gig” workers can enroll beginning September 1, 2019.

The program website states that employer registration is “quick and easy” and “employers play a limited role as facilitator.” California employers are not required to make contributions to the retirement account, which is funded by a default rate of 5% per paycheck. Employees can choose a different savings rate or opt out at any time. Accounts remain with employees even if they change jobs.


The author would like to gratefully acknowledge the assistance of Joanne Warriner.


This blog is presented under protest by the law firm of Ervin Cohen & Jessup LLP.  It is essentially the random thoughts and opinions of someone who lives in the trenches of the war that often is employment law–he/she may well be a little shell-shocked.  So if you are thinking “woohoo, I just landed some free legal advice that will fix all my problems!”, think again.  This is commentary, people, a sketchy overview of some current legal issue with a dose of humor, but commentary nonetheless; as if Dennis Miller were a lawyer…and still mildly amusing.  No legal advice here; you would have to pay real US currency for that (unless you are my mom, and even then there are limits).  But feel free to contact us with your questions and comments—who knows, we might even answer you.  And if you want to spread this stuff around, feel free to do so, but please keep it in its present form (‘cause you can’t mess with this kind of poetry).  Big news: Copyright 2019.  All rights reserved; yep, all of them.

If you have any questions about this article, contact the writer directly, assuming he or she was brave enough to attach their name to it.  If you have any questions regarding this blog or your life in general, contact Kelly O. Scott, Esq., commander in chief of this blog and Head Honcho (official legal title) of ECJ’s Employment Law Department.


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