Washington Saves Mandate: What Are Employers Required to Do?

Information and figures in this post are current as of October 30, 2026. Washington Saves is still finalizing its program rules, and some details may change before it opens.

Picture a Washington business that has been open for five years, with eight full-time employees and no retirement plan. Once Washington Saves opens in July 2027, that business has two choices: offer its own retirement plan, or sign up for Washington Saves by its deadline of December 1, 2029. If it signs up for Washington Saves, it has to send the program each eligible employee's information so they can be enrolled in an individual retirement account, then take money out of each paycheck and send it to the program. If an employee changes their contribution rate or opts out, payroll has to update the deduction.

That's the Washington Saves mandate. This post covers which businesses it applies to, what a business has to do if it enrolls with Washington Saves, what that costs, and which retirement plans meet the requirement instead.

There are alternatives if you'd rather not sign up for the state program.

Do I have to participate in Washington Saves?

Not necessarily. The mandate applies to your business if all three of these are true:

• You've been in business in Washington, with a physical location in the state, for at least two years.
• Your employees worked a combined 10,400 hours or more during the previous calendar year. That's about five full-time employees.
• You don't offer a retirement plan, such as a 401(k), 403(b), SIMPLE IRA or SEP IRA, to employees who have worked for you for a year or more without a break.

Nonprofits count. Government employers aren't covered.

If all three are true, you have to do one of two things: sign up for Washington Saves, or offer a qualifying retirement plan. Either one meets the requirement, and you can compare Washington Saves with a 401(k) before choosing.

The hours test counts every hour your employees worked, including part-time and seasonal hours. A business with 12 part-time employees who each work about 17 hours a week can meet the test even though none of them work full time. The test looks at the previous calendar year, so a business that doesn't meet it this year can meet it next year as it grows.

If you decide to enroll with Washington Saves, your employees age 18 or older are enrolled automatically unless they opt out. Employees can opt out, but you still have to make the program available to each one. Washington Saves is scheduled to open July 1, 2027. Your sign-up deadline depends on your size: under the program's proposed rules, covered employers whose employees worked more than 20,800 combined hours in Washington the previous year (about 10 full-time employees) must sign up by December 1, 2028, and all other covered employers by December 1, 2029.

What do you need to do to comply with the Washington Saves mandate?

If you decide to enroll with Washington Saves, your business is required to take the following steps:

1. Register. Sign the business up on the program's website by your deadline: December 1, 2028 if your employees worked more than 20,800 combined hours in Washington during the previous calendar year, or December 1, 2029 for all other covered employers. A business that becomes covered after December 1, 2028 has until December 1 of the year it becomes covered.
2. Send employee information. Within 30 days of registering, give the program each covered employee's legal name, Social Security or taxpayer ID number, date of birth and address, plus phone and email if you have them. Under the proposed rules, you send the same information for each new hire within 30 days of their hire date, and for each employee who turns 18 within 30 days of their birthday.
3. Share the program information. Pass along the program information and disclosures the program provides. The program also sends materials to employees directly. Once you submit an employee's information, they have 30 days to opt out, and you can't send their contributions to the program until that period ends.
4. Set up payroll deductions. Each pay period, take the contribution out of the paycheck of every employee who doesn't opt out, at the rate the program reports to you. The law lets the program's board set the default rate between 3% and 7% of wages, with increases of up to 1% a year to a maximum of 10%. The proposed rules set a 5% default. For employees enrolled at least six months, it rises 1% each January 1, up to 10%, unless the employee opts out of the increase. Accounts are Roth IRAs by default. Employees can change their rate or stop at any time. When the program notifies you of a change, you have up to 30 days to update the deduction.
5. Send the money on time. Under the proposed rules, you send contributions as soon as you reasonably can, generally within seven business days of each payroll deduction. You start sending an employee's contributions no later than 30 days after the program notifies you of their enrollment, and never before their 30-day opt-out period ends.

The last step is handled differently from the rest. If a business keeps money taken out of an employee's paycheck instead of sending it to the program, the Department of Labor & Industries handles the employee's complaint as a wage payment violation, the same way it handles unpaid wages. Employers remain liable for failing to send employee contributions.

Some tasks are not part of the employer's role. The program's governing board and its investment manager choose the investments. Employers aren't fiduciaries under Washington Saves, which means they aren't responsible for employees' savings decisions or their investment results. Employers also can't add money to employees' accounts, because federal law doesn't allow employer contributions to these IRAs.

If you set up your own 401(k) instead, you don't register with Washington Saves or follow its steps.

A full-service 401(k) provider can handle enrollment, employee notices and recordkeeping, and some providers also take on the 3(16) plan administrator role, which includes the plan's annual government filings. Your business still sends employee contributions from payroll to the plan on time, which federal rules require for every 401(k).

How much will Washington Saves cost my business?

Washington Saves doesn't charge employers fees. The cost to your business is time:

• Setting up a new deduction in payroll
• Adding new hires and employees who turn 18
• Updating deductions when employees change their rate or opt out
• Making sure each deposit reaches the program on time

Fines can't start until 2030. Before January 1, 2030, a business that isn't following the rules gets help from the Department of Labor & Industries to fix the problem instead of a fine. After that date, the department first sends a letter explaining what's wrong and gives the business 90 days to fix it. Only violations a business commits knowingly and intentionally can be fined, at a maximum of $100 for the first, $250 for the second and $500 for each one after that. Unpaid contributions are handled under the wage payment law instead, as described above.

The law requires the program's board to collect administrative fees to cover the cost of running the program, and the program says it charges no fees to businesses. Other state programs, such as OregonSaves and CalSavers, take these fees out of savers' accounts. As of October 30, 2026, Washington hasn't published how much employees will pay.

Which retirement plans make you exempt?

A business that offers a qualifying retirement plan to every employee who has worked there for a year or more without a break doesn't have to sign up for Washington Saves. Qualifying plans include:

• 401(k) plans, including plans a business joins along with other employers
• 401(a) plans, such as profit sharing plans
• 403(a) and 403(b) plans
• SEP IRAs
• SIMPLE IRAs

A plan can require employees to work for up to one year before they're eligible to join. A plan that leaves out any employee who has worked for the business for a year or more may not meet the requirement.

A business can also meet the requirement by automatically enrolling its employees in a qualified plan offered through a trade association, chamber of commerce or professional employer organization, as long as employees can opt out.

Under the proposed rules, a business with a qualifying plan can certify its exemption on the program's website.

A 401(k) can be set up in different ways, from a traditional or safe harbor 401(k) to a plan where the company doesn't contribute at all.

The bottom line on the Washington Saves mandate

If the mandate applies to your business, you can either sign up for Washington Saves or offer a qualifying retirement plan. 

With Washington Saves, you have to register by your deadline, keep your employee roster current, run payroll deductions and send the money on time. Washington Saves charges employers no fees, but the work comes up every pay period, and money withheld but not sent is handled as unpaid wages.

A 401(k) of your own meets the same requirement. First Hill Trust offers three Washington plans, the Ready 401(k), the Ready 401(k) Safe Harbor and a Custom 401(k). 

Give us a call at 206-625-1800 or click the banner below to discuss any of the options available to your company. 

Plan Sponsor FAQs

Continue Reading

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• What Separates the Best 401(k) Plans From the Rest?

• Can a Business Owner be the Trustee of their 401(k) Plan?

Sources

• Washington State Legislature, Chapter 19.05 RCW, "Washington Saves Program"
• Washington Saves Governing Board, proposed Chapter 520-01 WAC (WSR 26-16-061), August 2026
• Washington State Department of Labor & Industries, "Washington Saves Retirement Program"
• Washington Saves, "Employer Fact Sheet" (January 2026)
• U.S. Department of Labor, 29 CFR 2510.3-102, "Definition of 'plan assets': participant contributions"
• California State Treasurer, "CalSavers Overview for Employers"

Important Disclosures

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