In 2016, California passed a law requiring businesses with five or more employees that do not offer a retirement savings plan to participate in the CalSavers program.
Employers are not required to begin sponsoring a 401(k) plan and there are no employer fees or financial responsibility, but if your company does not currently offer a retirement plan to employees, there are important administrative steps that will be required: Deadlines for employers with 100+ and 50+ employees to register with CalSavers have already passed. The deadline for employers with 5+ employees is June 30, 2022.
After registering your company, you will receive enrollment information for each employee. Within 30 days, you will begin withholding retirement contributions from employees’ paychecks and submitting the funds to CalSavers for investment in their individual accounts. CalSavers is an opt-out program, so you will be expected to begin payroll withholdings unless the employee instructs otherwise, using the Opt Out Form.
But Wait… There’s More!
Updated SDI Brochure
The EDD has (finally) published an updated version of DE 2515, the employee brochure describing State Disability Insurance benefits. This document should be replaced in your New Hire Kit for employee onboarding and provided to employees as needed. (The Spanish version of this form has not yet been updated.)
Changes Expected for Form I-9
The existing version of Form I-9 is set to expire on October 31, 2022, and the Department of Homeland Security has announced plans for an overhaul of the document’s format. Sierra HR will be watching for publication of a new, revised version and will provide more information as soon as it becomes available.
Minimum Wage Increase in 2023
We have all been watching the State minimum wage rise over the past several years, heading toward a planned stopping point of $15.00 per hour in 2023. However, the Governor’s office has announced that due to high inflation, the minimum wage for all workers will increase to $15.50 per hour effective January 1, 2023. This will also impact the salary test for exempt employees, which must be at least two times the State minimum wage. The minimum salary for exempt classifications will rise to $64,480 annually.