Applies to for profit and not-for-profit employers employing 25 or more employees during past calendar year and no qualified retirement plan.
In 2019, Governor Murphy signed legislation that requires employers to automatically enroll their employees in the New Jersey Secure Choice Savings Program (hereinafter Program). The law took effect March 28, 2021 and requires employers to either sponsor a 401(k) plan or adopt the state-run retirement plan by the end of 2021.
The Program must be offered to any individual who is 18 years of age or older, lives and is employed by an employer in New Jersey, and whose wages are subject to withholding under New Jersey income tax act.
Unless an employee opts-out, an employee will be automatically enrolled and contribute 3% of his/her pre-tax income into the Program through a payroll deduction. The contributions to Program are employee funded.
An employer must provide the enrollment packet to new employees 30 days after date of hire and hold open enrollment every two years. An employer that fails to comply with the law could be subject to a fee of $100 up to $500 (increases each year for non-compliance) per eligible employee.
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