California’s CalSavers mandate is now fully enforced across all employer sizes. The California Franchise Tax Board actively issues penalties to non-compliant employers — and the fines add up fast.
Penalty Structure
Non-compliance penalties are assessed per eligible employee and escalate over time:
Who Must Comply?
Every California employer with 1 or more employees who does not already sponsor a qualified retirement plan must either register with CalSavers or establish a private qualified plan (401k, SIMPLE IRA, SEP IRA, etc.).
How to Avoid CalSavers Penalties
You have two options to achieve compliance and avoid fines:
- Option 1: Register with CalSavers — The state-run Roth IRA program. Free for employers but limited to $7,000/year employee contributions with no employer match or tax deduction.
- Option 2: Establish a Private Qualified Plan — A 401(k), SIMPLE IRA, or SEP IRA. Higher contribution limits (up to $69,000+/year), employer tax deductions, SECURE 2.0 tax credits up to $15,000, and employee matching options.
Frequently Asked Questions
Can the Franchise Tax Board really fine my business?
Yes. The California Franchise Tax Board has enforcement authority and is actively issuing penalty notices to non-compliant employers. These penalties are assessed per eligible employee and can be significant even for small businesses.
Does having a retirement plan exempt me from CalSavers?
Yes — if you already sponsor a qualified retirement plan (401k, SIMPLE IRA, SEP IRA, 403b, etc.), you are exempt from CalSavers. However, you must certify your exemption through the CalSavers portal.
What if I only have part-time or seasonal workers?
California’s mandate applies to eligible employees who are 18+ and have received wages in the state. Part-time and seasonal employees may still count toward your obligation depending on their classification.
Don’t Wait for the Penalty Notice
Get a complimentary 15-minute compliance audit and find out exactly where your business stands.
My credential is in retirement plan fiduciary standards — which means I am professionally and ethically obligated to give you accurate information, not advice that benefits me.
In 15 minutes you will know your exact fine exposure, your SECURE 2.0 credit eligibility, and every option available to you — including ones that have nothing to do with my services.
Then you decide. No follow-up pressure. No obligation. Ever.
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