An AARP study found that 47% of American workers in 2022 were employed by a business that does not offer any type of retirement plan. They also found that Americans are 15 times more likely to save for retirement when they have a workplace plan and 20 times, when the contributions are automatic. With such a low rate of employees saving for their retirement, many states are looking at closing that gap through state-facilitated programs and mandating employers in their state to offer a retirement plan.
If you are an employer who does not have a retirement plan, such as a 401(k) already in place, then you want to review the following states, where they have implemented regulations for employers who have employee(s) working in their state. Some states start regulation with just one employee, so an employee working from home in another state could trigger a penalty.
The following is a list of states that currently have a mandate. Included in the latter are a couple that have a voluntary program, along with their requirements and potential penalties for non-compliance:
California – CalSavers: Employers with one or more employees or more are mandated to have a plan. Each spring, employer mandate status is assessed based on quarterly employee data that employers submit to the Employment Development Department (EDD) from the preceding year. A registration deadline of December 31 is then applied to newly-mandated employers. Employers may be subject to a $250 fine per employee, if found in noncompliance 90+ days after the notice, and an additional $500 fine per employee, if found in noncompliance after 180+ days.
Colorado – SecureSavings: Employers with five or more employees that have been in business for two or more years are mandated to have a plan. Employers may be subject to a $100 fine per employee (up to a maximum of $5,000 per calendar year,) if found in non-compliance.
Connecticut – MyCTSavings: Employers with five or more employees are mandated to have a plan. Employers that don’t comply by 90 calendar days after the final noncompliance notice could receive between $500 and $1,500 in fines.
Delaware – EARNS: Employers with five or more employees are mandated to have a plan. Employers that don’t comply with the law could be fined up to $250 per employee per year with a maximum total penalty of $5,000 per year.
Hawaii – Retirement Savings Program: The program is projected to implement in mid to late2026. Noncompliant employers will receive a penalty of no less than $500 for each violation or failure, provided that the penalties shall not exceed $5,000 per calendar year.
Illinois – SecureChoice: Employers with five or more employees and are currently required to comply. Employers that do not comply face penalties of $250 per employee for the first year and $500 per employee for each subsequent year.
Maine – Maine Retirement Investment Trust (MERIT): Employers with five or more employees, and have been in business two or more years, are currently required to comply. A penalty of $20 per eligible employee will apply, which is set to increase up to $100.
Maryland – Maryland$aves: Employers with one or more employees, have been in business two or years and pay employees through an automated payroll system are currently required to comply. The program does not currently provide for penalties for non-compliance, however, participating employers receive a waiver of the $300 required annual report filing fee.
Massachusetts – CORE Plan: This program is currently voluntary.
Minnesota – Secure Choice Retirement Program: Employers with five or more employees are currently required to comply. A penalty starting at $100 per employee in the second year of non-compliance will apply, rising to $500 per employee annually, with no maximum cap after four years. Penalties issued after warnings and willful failure-to-remit contributions are a misdemeanor.
Missouri – MyRetirement Savings: This program is currently voluntary.
Nevada – Employee Savings Trust Program (NEST): Employers with six or more employees and have been in operation for at least 36 months are currently required to comply. The state has not yet announced any penalties for noncompliance.
New Jersey – RetireReady NJ: Employers with ten or more employees are required to comply. After a written warning in the first year, employers are subject to these fines per employee for every year following: $100 in year two, $250 in years three to four, $500 in year five and beyond.
New Mexico – Work & Save and New Mexico Marketplace: This program is currently on an indefinite hold and is currently voluntary.
New York – Secure Choice Savings Program: Employers with ten or more employees and have been in business for at least two years are required to comply. Employers required to facilitate the program must register by the following deadlines: 30 or more employees – March 18, 2026, 15 to 29 employees – May 15, 2026, 10 to 14 employees – July 15, 2026.
Oregon – OregonSaves: Employers with one or more employees are currently required to comply. Employers not in compliance with the mandate must pay a fine of $100 per affected employee, up to a maximum of $5,000 per calendar year.
Rhode Island – RISavers: Registration is required for employers with five or more employees. Businesses with more than 100 eligible employees must comply no later than October 15, 2026, those employing between 50 and 99 eligible employees must comply no later than October 15, 2027, and those employing between 5 and 49 eligible employees must comply no later than October 15, 2028. Each eligible employer that, without good cause, fails to allow its eligible employees to participate in the program within 30 days from the date the notice of penalty is issued, shall be subject to a penalty of $250 per eligible employee.
Vermont – VT Saves: Employers with 15 or more employees and in business for at least two years are required to comply. Effective July 1, 2026, the employee count drops to five or more. Employers with two or more employees and in business for at least 2 years are required to register. Employers are subject to a $20 noncompliance fine per eligible employee, per year, set to increase to $75 on October 1, 2026.
Virginia – RetirePath: Employers with 25 or more employees, operating for two or more years, are required to comply. An eligible employee is 18 or older and employed at least 30 hours for any portion of a week in the preceding 12 month period. Fines for noncompliance can be upwards of $200 per eligible employee per year.
Washington – Washington Saves: Washington Saves, replacing Washington’s Small Business Retirement Marketplace by July 1, 2027, will be required for businesses that have operated in Washington for two years or more to have a physical presence in the state and employ workers for 10,400 or more hours a year, which is roughly five full-time employees. Deadlines for this new program are unknown at this time. For Washington Saves, if the department finds an employer-administrative violation, the department must first provide an educational letter outlining the violations and provide 90 days for the employer to remedy the violations. (Ivy’s note: keep Then, a) first-time willful violation is $100, increased to $250 for a second willful violation. For each subsequent willful violation, the employer is subject to a maximum penalty amount of $500 for each violation.
If you have any employees in any of the states listed above, there is likely a registration and/or opt out that needs to be performed, so be sure you check with the state for details.
While the above covers state mandates, we can’t rule out the possibility of a city requirement, and it looks like Philadelphia is in the pipeline. PhillySaves, as they will call it, is on the ballot scheduled for May 19, 2026 for voters to officially establish the Retirement Saving Board. If passed, the program would automatically sign people up without a company-supported retirement program and deduct 3–6% for a Roth or traditional IRA. A couple of other cities explored or even passed legislation, but they ended up being absorbed by the state program.
That is 20 states so far and the list is expected to grow as the following states are currently considering a state-mandated plan: Alabama, Alaska, Arizona, Arkansas, Georgia, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Michigan, Mississippi, Montana, Nebraska, New Hampshire, North Carolina, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, Tennessee, Texas, Utah, West Virginia, Wisconsin, Wyoming
Whew! That is almost every state, and if you were keeping track, that leaves Florida and South Dakota as two states that do not have an employer mandate anywhere on their radar.
To get ahead of the game and not have to worry about a state mandate and where you may be hiring employees, the best option is to implement a 401(k) or other retirement plan now. Now is actually a perfect time with the free money the federal government is giving away, as mentioned in our previous post: https://blog.paymaster.com/implementing-a-401k-plan-is-now-a-win-win-free-money-for-business-owners-and-their-employees/
While we make every attempt to ensure the accuracy and reliability of the information provided in this article, the information is provided “as-is” without warranty of any kind. Romeo Chicco or PayMaster, Inc. does not accept any responsibility or liability for the accuracy, content, completeness, legality or reliability of the information contained. Consult with your CPA, Attorney, Financial Advisosr and/or HR Professional, as state and local laws are rapidly changing on this topic and your situation may vary.
