Well, typically it would have to be the employer which would require plan participation as a condition of employment. However, in the case of a statewide plan embodied in a statute, the difference may not be meaningful, because the state statute would govern the employer (the state and/or local governments) as well as the plan itself.
From an IRS perspective, there is no problem at all with making plan participation a condition of employment. However, you need to check applicable state and local law carefully. States may, for example, have laws stating that no amounts may reduce an employee's paycheck unless the employee voluntarily consents to them. Under such circumstances, it may be better to have plan participation something as to which employee's make an irrevocable choice at the time of first employment, rather than making it something which is required as a condition of employment. Either approach works from an IRS perspective.
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