A business with employees in both Delaware and New Jersey can fall under two state retirement mandates, one, or neither. The two laws count employees differently, accept different plans and run on different timelines. This guide lines them up side by side. For each state’s full rules, see the Delaware EARNS and RetireReady NJ pages.
Each state counts only its own employees
New Jersey’s law (N.J.S.A. 43:23-14) defines an employer as one that “at no time during the previous calendar year employed fewer than 10 employees in the State.” An employee is someone 18 or older who lives in New Jersey or is employed by an employer in New Jersey, and whose wages are subject to New Jersey income tax withholding.
Delaware’s law (19 Del. C. §3802) covers an employer that “employs, and during the previous calendar year employed, at least 5 covered employees,” where a covered employee has wages allocable to Delaware and is at least 18.
Because each law looks at its own state’s workforce, you check the two headcounts separately. For example, a company with 8 New Jersey employees and 6 Delaware employees would read very differently under the two tests: New Jersey’s wording requires 10 or more New Jersey employees at every point of the prior year, while Delaware’s requires 5 or more Delaware employees now and during the prior year. Confirm your status with each program.
Side by side
| Delaware EARNS | RetireReady NJ | |
|---|---|---|
| Employee threshold | 5 covered employees, now and during the prior year | At no time fewer than 10 New Jersey employees during the prior year |
| Time in business | At least 6 months in Delaware in the prior calendar year | At least two years |
| Plans that exempt you | 401(a), 401(k), 403(b), SEP, SIMPLE IRA, or an automatic-enrollment payroll-deduction IRA for all covered employees | 401(a), 401(k), 403(a), 403(b), SEP, SIMPLE IRA, 457(b), or a PEO plan, offered in the preceding two years |
| Deadlines | Businesses notified before January 1, 2026: passed. Newly eligible: June 30, 2026 | 40+ and 25–39 employees: passed. 20–24: December 1, 2026. 10–19: February 17, 2027 |
| Penalty | Up to $250 per employee per year, capped at $5,000 a year | Written warning, then a $100 fine, then $250 and $500 per employee not enrolled |
| Before a penalty | Notice, then 90 days to comply; no enforcement until one year after your first required date | Notice of proposed penalty; 90 days to file a written protest |
| Employer line | 1-855-934-3701 | 855-929-4387 |
The plan lists don’t match
The difference that matters most for a two-state employer is the list of plans that exempt you. Delaware’s statute accepts an automatic-enrollment payroll-deduction IRA offered to all covered employees. New Jersey’s statute lists qualified plans under 401(a), 401(k), 403(a), 403(b), 408(k), 408(p) and 457(b), plus PEO-sponsored plans, and the program says payroll-deduction IRAs do not qualify. An arrangement that exempts you in Delaware may therefore not exempt you in New Jersey.
A qualified plan that appears on both lists, such as a 401(k), a SEP or a SIMPLE IRA, is named in both statutes. Certify it with each program separately; each one issues its own Access Code.
Separate registrations and separate notices
The programs are run independently. If you’re covered by both, you register (or certify an exemption) with each, using that program’s Access Code, and you send contributions to each program for that state’s participants. Notices, deadlines and any penalty process also run separately in each state.
A checklist for two-state employers
- Count your Delaware and New Jersey employees separately for the prior calendar year, using each state’s wording above.
- Check time in business against each state’s test.
- Compare any plan you already offer against both plan lists.
- For each state where you’re covered and have no qualifying plan, register before that state’s deadline.
- Certify your exemption with every program where your plan qualifies.
Want a second pair of eyes on a two-state setup? Book a free 15-minute audit.
Sources: 19 Del. C. ch. 38 (§§3802, 3804, 3805); N.J.S.A. 43:23-14 and 43:23-31 as amended by P.L.2025, c.379; Delaware EARNS and RetireReady NJ employer pages. Informational only, not legal advice.
This content is for educational purposes only and does not constitute financial, tax, legal, or investment advice. State requirements and penalties are subject to change. Consult a qualified professional before making compliance decisions.
