CalSavers: What California Employers Need to Know

For families in California with nannies or other domestic employees, there’s an important update that’s worth your attention: the CalSavers Retirement Savings Program. We understand that new requirements can feel like a lot, but grasping this information now means being well-prepared as the end-of-year deadline approaches. Our goal is to provide clear, practical information to help employers support their employees and navigate new regulations effectively, and with as little stress as possible.

What is CalSavers?

CalSavers is a state-sponsored retirement savings program designed to help California's workforce save for the future. Specifically, it's for employees whose employers don't already offer a qualified retirement plan like a 401(k), SIMPLE IRA, or SEP IRA.

For employers in California: If your business or household employs even one worker and does not currently offer a qualified retirement plan, you need to register with CalSavers or claim an exemption by December 31, 2025.

Who This Impacts

The CalSavers program broadly impacts most employers in California, as well as their eligible employees.

• Families: If you have paid employees, and you do not currently offer a qualified retirement plan, this program likely applies to you. 
• Nannies/Employees: If you are a W-2 employee working for an employer in California who does not offer a qualified retirement plan, you are eligible for CalSavers.

How Does It Work?

Once an employer is registered, CalSavers will automatically enroll eligible employees into a Roth IRA. A 5% contribution rate will be set, which is then deducted directly from their pay.

For employees, this means:

• You will be automatically enrolled when your employer registers.
• You have the flexibility to adjust your savings rate, choose different investment options, or even opt out of the program entirely.
• You'll have a 30-day window to make these choices after you're added to the system.
• It’s important to note that this program is employee-funded; your employer does not make contributions to your CalSavers account.

What's Required From Employers?

As an employer in California, your role involves a few straightforward steps:

1. Register with CalSavers or file an exemption by the December 31, 2025 deadline.
2. Upload employee information to the CalSavers online portal.
3. Deduct contributions directly from employee paychecks.
4. Submit contributions to CalSavers within 7 days of each payroll.

What if I don’t register in time? Non-compliance can lead to penalties. These include $250 per employee after 90 days, and $500 per employee after 180 days.

Your Path to CalSavers: What You Need to Do

Understanding your role in CalSavers is crucial. Here's a guide to help you determine your next steps, whether you are an employer or an employee:

Staying Informed and Ahead

We understand that navigating new requirements can sometimes feel like a lot. However, this program represents a significant stride in helping employees across California build for their retirement. Providing valuable information and insights on topics like this helps employers ensure a supportive and compliant environment for their employees.

For an in-depth look at CalSavers, especially concerning household employment, we recommend this comprehensive article from our friends at HomeWork Solutions: What California Household Employers Need to Know About the CalSavers Retirement Program.

If you have any questions or would like to discuss how CalSavers might apply to your unique situation, please don't hesitate to reach out.

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