Automatic Enrollment Implementation
Is automatic enrollment permissible under law?
Partially
Explanation:
The state does not permit wage deferrals without the employee’s written authorization or as empowered by state or federal law, or court order. However, the Iowa 457(b) Plan does permit employers to elect an automatic contribution arrangement for its covered employees (Iowa 457(b) Plan Document revised Apr. 2019 Art. 7).
Relevant State Laws – Iowa Code Ann. § 91 A.5
“Deductions from wages.
- An employer shall not withhold or divert any portion of an employee’s wages unless:
- The employer is required or permitted to do so by state or federal law or by order of a court of competent jurisdiction; or b. The employer has written authorization from the employee to so deduct for any lawful purpose accruing to the benefit of the employee.”