Currently CalSavers, the state’s mandatory payroll reduction IRA savings plan, requires employers employing 5 or more employees that do not offer a retirement plan to enroll in the program. In August, Governor Newsom signed legislation lowering the employee threshold from five to one.

By December 31, 2025, eligible employers with one or more eligible employees, that do not offer a retirement savings program, shall have a payroll deposit retirement savings arrangement to allow employee participation in the program.

Sole proprietorships, self-employed individuals, or other business entities that do not employ any individuals other than the owners of the business are exempt from complying with the law.

The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.