Retirement Plan Mandate for
Construction Contractors

State Mandates for Construction Contractors

General contractors, subcontractors, specialty trades, and home improvement businesses are all subject to state retirement mandates based on their W-2 employee count:

• California: 1+ employees — CalSavers. $250-$500/employee penalty. Active enforcement.
• Oregon: 1+ employees — OregonSaves. $100/employee penalty.
• Illinois: 5+ employees — IL Secure Choice. $250-$500/employee penalty.
• New Jersey: 25+ employees — RetireReady NJ. ~$100/employee estimated penalty.
• Colorado, Connecticut, Maryland, Maine, Virginia: Active mandates with varying thresholds.

1099 subcontractors do NOT count toward your employee threshold. Only W-2 employees matter.

Seasonal Workers: What Contractors Need to Know

Construction is one of the most seasonal industries. Here's how state mandates handle seasonal workers:

• Seasonal W-2 employees count toward your threshold during the period they're employed
• Employees working fewer than 500 hours/year can often be excluded from enrollment
• If your workforce fluctuates above and below a threshold seasonally, consult a plan advisor on optimal plan design
• A SIMPLE IRA's 2-year eligibility rule can exclude newer seasonal hires from mandatory enrollment

Prevailing Wage & Union Contractors

If your construction company works on prevailing wage projects or your workers belong to a union with a pension plan, you may already have a qualifying exemption:

• Union pension contributions typically satisfy state mandate exemption requirements
• Prevailing wage retirement fringe benefits may qualify as a "retirement plan" for exemption purposes
• Verify your specific plan qualifies with a retirement compliance advisor

SECURE 2.0 for Construction Companies

Construction companies with 1-50 employees are ideal SECURE 2.0 candidates:

✅ $5,000/year × 3 years startup cost credits

✅ $1,000/employee/year contribution credits

A New Jersey contractor with 20 field workers → up to $35,000 in total credits over 3 years while being fully exempt from RetireReady NJ.