13 States Now Mandate Retirement Plans — Is Yours One?

Does Your Small Business Need a 401(k) Plan?

State-mandated retirement plan laws are expanding rapidly. Find out exactly what your state requires, what the fines are for non-compliance — and how Chris can help you compare your payroll and retirement plan options.

13
Active state
mandates in 2026
$15K
SECURE 2.0 tax
credits available
$1,000
Max fine per
employee (NY)
30+
More states with
laws in progress
States with active mandates — 2026
CaliforniaNew York IllinoisOregon ColoradoConnecticut VirginiaNew Jersey DelawareMaryland NevadaVermont Maine Minnesota ↑ 2026 Georgia ↑ coming +30 states pending
Penalty exposure without a plan
$250 – $1,000
per employee, per year — escalating annually
Auris Payroll helps coordinate payroll and retirement plan administration — without forcing you to switch providers blindly. Work with your current 401(k) provider, or ask Chris about Auris partner options.
Updated May 2026
All 50 states covered
SECURE 2.0 credits explained
Current provider or partner options
Free 15-min fit check with Chris

Does My Business Need a Retirement Plan?

Answer 4 questions. We'll check your exact state law, show your penalty exposure, flag your growth triggers, and give you a state-specific compliance guide.

Small Business 401(k) Requirement Calculator

State mandates · Employee thresholds · Penalty calculator · Growth triggers · Compliance steps

Step 1 of 4
Step 1 of 4
Which state(s) does your business operate in?
Select every state where you have W-2 employees. Each state has completely different rules, deadlines, and penalty structures.
Step 2 of 4
How many W-2 employees do you have?
Include full-time and part-time W-2 employees only. 1099 contractors do not count toward state mandate thresholds.
total W-2 employees
Step 3 of 4
How long has your business been operating?
Several states — including New York, Illinois, Virginia, Nevada, and Maryland — only require retirement plans after a minimum time in business. Your answer here can change everything.
Step 4 of 4
Do you currently offer employees a retirement plan?
A qualified plan — 401(k), 403(b), SEP IRA, SIMPLE IRA, 403(a), 457(b), or pension — exempts you from state auto-IRA programs. You'd just need to register your exemption.

Which States Require Employers to Offer a Retirement Plan?

13 states have active mandates. Employers without a qualified plan — like a 401(k) — must enroll in the state's auto-IRA program or face escalating fines. Chris can help you review the requirement and decide whether to work with your provider or one of Auris’s partners.

Use the calculator above for your specific situation. State laws update frequently — Chris can help review these requirements during a payroll and retirement plan fit check.

Powered by Auris Payroll

The Smarter Way to Handle Payroll and 401(k) Compliance Together

Managing a state retirement mandate is hard enough. Auris publicly positions 401(k) under Benefits: Auris can work with your 401(k) provider, automate deductions, and streamline reporting. Chris can help compare your current payroll and 401(k) setup, coordinate with your existing provider, or introduce an Auris partner when that is a better fit.

  • State mandate review during setupChris can help review state retirement plan requirements for the states where you have employees and flag what needs confirmation with your provider or advisor.
  • Auris works with your 401(k) providerAuris’s public benefits page says Auris manages easily with your 401(k) provider, automating deductions and streamlining reporting. Chris can help review that workflow with your current provider or an Auris partner option.
  • Exemption documentation checklistIf you already offer a qualified plan, Chris can help identify the exemption documentation you may need to keep organized for the state program.
  • Auto-enrollment workflow reviewSome new plans have auto-enrollment requirements. Chris can help review the new-hire, opt-out, and payroll deduction workflow with your provider or advisor.
  • Clear payroll and plan recordsKeep payroll deduction records, enrollment handoffs, contribution history, and provider communication cleaner so questions are easier to answer.

Already have a payroll provider?

Many small businesses are juggling payroll, state mandate notices, and 401(k) administration across separate systems. Chris can help you decide whether to keep your provider, improve the workflow, or use an Auris partner.

  • 1
    Call Chris — free 15 minutes. Tell him your state, your team size, your current payroll setup.
  • 2
    Chris reviews your state requirements and either coordinates around your current provider or introduces an Auris partner option.
  • 3
    Review Auris Payroll — cleaner payroll workflows with retirement plan handoffs in mind.
  • 4
    Auris can help automate deductions and streamline reporting with the 401(k) provider workflow.
What Chris does for you
Chris reviews your state requirements, your current provider setup, possible SECURE 2.0 credit questions, and whether state auto-IRA, your existing provider, or an Auris partner path makes the most sense.

How Much Does a Small Business 401(k) Actually Cost?

SECURE 2.0 tax credits may offset startup costs for eligible employers, while state non-compliance penalties can become expensive. Chris can help you frame the numbers before you choose a path.

Cost of NOT offering a plan

10-employee business in a mandate state

Year 1 state fine (base rate)$2,500
Year 2 fine (escalated)$5,000+
Year 3+ fine (max rate)$10,000+
Average cost to replace one employee$15,000
Payroll admin time managing compliance manuallyHours/month
3-year total minimum exposure$32,500+

Cost with a 401(k) + Auris Payroll

Same 10-employee business, example private plan scenario

Annual 401(k) admin cost (typical)$1,500
SECURE 2.0 tax credit — Year 1−$5,000
SECURE 2.0 tax credit — Year 2−$5,000
SECURE 2.0 tax credit — Year 3−$5,000
State fine exposure$0 (exempt)
Illustrative 3-year net after credits−$10,500
$43,000+
Illustrative difference over 3 years when credits apply
$24,500
Max employee deferral in 2026 — pre-tax or Roth
$72,000
2026 IRS annual additions limit, before catch-up contributions
100%
Employer contributions are tax-deductible as a business expense
40%
Retirement benefits can support recruiting and retention

401(k) vs State IRA Program — What's Actually the Difference?

Both options satisfy state mandates. But they're not equal. Most growing businesses choose a private 401(k) — here's exactly why.

FeaturePrivate 401(k)State Auto-IRA Program
2026 contribution limit$24,500 employee deferral ($32,500 age 50+ if catch-up is allowed)Lower IRA contribution limit; verify current IRS limit
Employer matchingYes — you choose the formulaNot permitted in state programs
SECURE 2.0 tax creditsUp to $5,000/yr × 3 years = $15,000No startup tax credits
Investment optionsWide range — index funds, target-date, ETFsLimited state-selected funds only
Roth IRA income limitsNo income limits — any earner can participateHigh earners may be excluded
Satisfies state mandateYes — qualifies as exemption in all statesYes — it is the state plan
Safe harbor optionYes — eliminates nondiscrimination testing riskNot available
Loan provisionsEmployees can borrow against their accountIRA loans not permitted
Payroll/provider coordinationAuris works with your 401(k) provider to automate deductions and streamline reportingOften a separate state workflow to manage
The Auris advantage

A private 401(k) can often be coordinated with payroll more cleanly than a separate state auto-IRA workflow. Auris’s public 401(k) positioning is to work with your 401(k) provider, automate deductions, and streamline reporting. Chris can work with your current provider or introduce an Auris partner, then help you compare the options for your exact situation.

Small Business 401(k) and Payroll — Answered

Let Chris Show You What Auris Can Do for Your Business

Chris reviews your state requirements, current 401(k) or retirement provider, possible SECURE 2.0 credit questions, and whether it makes sense to keep your provider or use one of Auris’s partners.

C
Chris
Auris Payroll — 401(k) fit check
Free 15-minute fit check · No obligation

Free consultation No obligation State-specific review Current provider or partner options Auris Payroll review available SECURE 2.0 credit questions framed
Need 401(k) or payroll help? Call Chris Email Chris