If HR leaders are holding onto any notion that only full-time, salaried workers are interested in contributing to a 401(k) plan, it’s safe to say they can retire that belief.

New research from payroll and benefits platform Gusto finds that the share of small businesses offering a retirement plan has grown steadily over the last seven years, with a notable pickup among those in sectors with high shares of hourly workers.

Some 31% of small businesses now offer a retirement plan to their employees, up from 19% in 2019, according to Gusto. Industries where retirement plans were rare prior to the pandemic, such as hospitality, recreation, and agriculture, saw adoption grow by more than 100% during this time period (hospitality alone saw a 200% increase). Unsurprisingly, more hourly workers now have access to a retirement plan as well, with the share of employees in this category rising to 38%, up from 21% in 2019.

What’s more, “most of that growth has been happening at very smallest employers,” with fewer than five or 10 employees, Nich Tremper, head of Gusto Insights and a senior economist with the company, told HR Brew.

SECURE 2.0 legislation helps drive adoption. One obvious reason more small employers are now offering retirement benefits has to do with policy.

As of June, 18 states had enacted “auto-IRA” programs that require most private employers to either offer a retirement plan of their own, or help their employees enroll in one managed by the state, according to tracking from the American Association of Retired Persons. Adoption of IRAs was higher in states with such mandates, Gusto found.

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