CalSavers Registration Deadline Extended
CalSavers Registration Deadline Extended

In December 2018, California announced the start of its CalSavers retirement savings program.  The program is available to California employees whose employers do not offer a workplace retirement plan, to self-employed individuals, and to others who want to increase their retirement savings.  Through this program, employees working for a participating employer may automatically contribute a portion of their pay to a Roth (post tax) Individual Retirement Account.  Individuals who do not work for a participating employer but want to save under CalSavers can set up recurring contributions. 

Mandatory Registration Extension

CalSavers, which began as an operational pilot, is alive and well, and requires California employers with five or more employees to facilitate the program if they do not offer employer-sponsored retirement plans.  One of the registration deadlines has now been extended in light of COVID-19.  Previously, mandatory registration was required by June 30, 2020 for employers with more than 100 employees.  The new registration deadline for such employers is now September 30, 2020. 

For employers with 51 to 100 employees, the mandatory registration deadline remains the same, June 30, 2021.  For the smallest employers of 5 to 50 employees, the prior deadline of June 30, 2022 has not changed.  Additionally, eligible employers can register at any time before their deadline.

Registration Information Required To Register

To register your business, you need the following information:  (1) A federal Employer Identification or Tax Identification Number (EIN/TIN); (2) the EDD California Payroll Tax Account Number; and (3) your CalSavers access code.  Businesses that do not yet have a CalSavers access code may request an access code here

Multi-Party Employment Relationships

For employers that use a temporary services or leasing employer, the “eligible” employer is the temporary services or leasing employer, not their clients.  The “client employer” is still required to comply with CalSavers if it employs at least five of its own employees and does not sponsor a qualified retirement plan.

Employer Post-Registration Responsibilities

Once the employer has registered for CalSavers, the employer is required to provide basic employee roster information to the program for all eligible employees (name, date of birth, social security or ITIN, and contact information).  Information for new employees must be submitted within 30 days of their date of hire or date of eligibility.  The employer must then facilitate payroll deductions for the appropriate contributions for each pay period and remit each saver’s contributions.

Once CalSavers receives the employee roster information, the program takes on the responsibility to contact employees directly to provide the employees information about the opt-out or customization methods availability.  Employers are to remain neutral about their employees’ participation in CalSavers.

Employer Penalties For Non-Compliance

Under California Unemployment Insurance Code section 1088.9(b), eligible employers who, without good cause, fail to allow employees to participate in CalSavers on or before 90 days after service of notice of its failure to comply shall pay a penalty of $250 per eligible employee if the employer’s non-compliance extends 90 days of more after the notice.  Should the employer remain non-compliant 180 days or more after the notice, an additional penalty of $500 per eligible employee is required. 

Frequently Asked Questions

The CalSavers’ web site has answered frequently asked questions concerning both employer and employee obligations.

Employers with questions regarding CalSavers may contact the authors or their usual employment counsel at AALRR.

This AALRR presentation is intended for informational purposes only and should not be relied upon in reaching a conclusion in a particular area of law. Applicability of the legal principles discussed may differ substantially in individual situations. Receipt of this or any other AALRR presentation/publication does not create an attorney-client relationship. The Firm is not responsible for inadvertent errors that may occur in the publishing process.

© 2020 Atkinson, Andelson, Loya, Ruud & Romo

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