Iowa Wage Law Explained
Table of Contents
- 1 Iowa Wage Law Explained
- 2 Understanding Iowa Wage and Overtime laws
- 3 Minimum Wage
- 4 Overtime Pay
- 5 Misclassification of Independent Contractors
- 6 Statute of limitations
- 7 Penalties for Violations
- 8 Lore Law Firm is On your side
a table of contents
If you believe you’ve been deprived of the compensation to which you’re legally entitled, please contact the Lore Law Firm. Our overtime rights lawyers represent Iowa employees who have been subjected to workplace wage and hour violations and take cases on a contingent fee basis – no fee if no recovery of backpay.
Understanding Iowa Wage and Overtime laws
While Iowa does have certain state labor laws that differ from the federal Fair Labor Standards Act (FLSA), the state law applies only in instances where it provides greater rights or protections than federal law. Whichever law (state or federal) is more favorable to the worker will apply.
The current Iowa and federal minimum wage is $7.25 per hour. The minimum wage for a tipped employee is $4.35 per hour. The minimum wage for new hires is $6.35 per hour for the first 90 days, under Iowa’s “initial employment wage” law.
Iowa state labor laws on overtime pay generally apply the FLSA and require employers to pay time and a-half for all hours worked over 40 per workweek, unless an employee is properly classified as exempt.
For minimum wage workers in Iowa, the overtime pay rate amounts to $10.88 per hour (1.5 x $7.25).
An employer doesn’t violate overtime laws by requiring employees to work overtime, (ie “mandatory overtime”), as long as they are properly compensated at the premium rate required by law.
Iowa labor laws do not require reporting pay or show-up pay when workers show up for a scheduled shift but are sent home due to no available work.
Which Employees are Entitled to Overtime Pay
Most workers in Iowa are entitled to overtime pay when they work more than 40 hours per week. In certain circumstances, however, there are exceptions.
Employees engaged in executive, administrative, or professional capacities (and paid at least $455 per week on a salary basis) are exempt from the overtime requirement. Note that new minimum salary requirements for these overtime exemptions take effect in January 2020 and increase the minimum salary threshold to $684 per week (or $35,568 annually). This change in federal law will also apply to most workers in Iowa when making the determination of whether they are classified as exempt or non-exempt from the overtime pay laws.
Are You Owed Back Overtime Wages?
Misclassification of Independent Contractors
While there are situations in which workers are legitimately running their own business and properly treated as independent contractors who are not entitled to receive overtime, employers are not allowed to mischaracterize employee roles to avoid paying overtime compensation.
Merely labeling a worker as an independent contractor, or even entering into a written agreement, is not enough to avoid the labor laws on overtime pay.
While there is no single definition of “independent contractor” under Iowa labor laws. There are several factors to be considered in determining if a worker in Iowa is an employee or independent contractor (a/k/a 1099 employee)
If properly classified as an independent contractor under Iowa law, workers are typically eligible for only the specific compensation bargained for in a contract.
The minimum wage for a tipped employee under Iowa state law is $4.35 per hour.
Employers may not withhold any portion of an employee’s wages unless required to by Iowa or federal law or if the employer has written authorization to make deductions from an employee’s paycheck.
The following items can be deducted from wages:
- Deductions for any lawful purpose accruing to the benefit of the employee if the employee has given written authorization for the deduction (for example, insurance, 401K, pensions, bonds and savings programs).
The following items cannot be deducted from wages:
- Cash shortages in common money till.
- Losses due to breakage, damage, acceptance of bad checks, and default of customer credit except in certain limited cases.
- Lost or stolen property unless certain conditions are met.
- Personal protective equipment, in most cases.
All wages due a separated employee must be paid the earlier of the next regularly scheduled payday.
An employer may require direct deposit of wages if:
- You were hired after July 1, 2005.
- The costs of opening and keeping the account do not drop your pay below minimum wage.
- There is no charge to your account for the direct deposit.
- You are not covered by a union contract that prohibits mandatory direct deposits.
Pay Stubs / Statements
Iowa labor law requires every employer provide employees a statement on each regular payday showing:
- The hours the employee worked.
- The wages earned by the employee.
- The deductions made from that paycheck.
The statement shall be provided using one of the following methods:
- Sending the statement to an employee by mail.
- Providing the statement to an employee by secure electronic transmission or other secure electronic means, provided the employee is able to receive under these methods. Otherwise, the employer must use another approved method.
- Providing the statement to an employee at the normal place of employment during normal working hours.
- Providing each employee access to view and print a statement of their earnings electronically and providing free and unrestricted access to a printer to print the statement.
An employer is not required to provide information on hours worked for an employee who is exempt from overtime under Federal Law, as long as the employer does not actually pay overtime, a bonus or other payment based on hours worked. If the hours worked affect the pay for such employees, the employer shall provide a statement showing the hours worked or payments made, as applicable.
Breaks or Meal Periods
Iowa labor law does not require employers to give breaks or meal periods to adults. Employees would only be entitled to breaks if it is the employer’s policy to provide them.
Vacation or Holiday leave
Iowa doesn’t require employers to provide workers with paid or unpaid vacation leave.
Many employers choose to provide vacation leave as part of a benefits packages to attract employees, however. In these situations, employers may set the policies, terms and conditions as to how and when such a benefit is used – including “use it or lose it” policies that state that terminating employees forfeit accrued but unused vacation time.
Statute of limitations
Iowa’s deadline for filing an overtime claim adheres to the FLSA, which requires those seeking to recover unpaid back overtime wages file a lawsuit within two years from the date of the employer’s wage violation. So, a lawsuit filed today would be able to seek recovery of back overtime for only the prior 2 (sometimes 3) years.
As an example, suppose you believe that your employer has failed to pay you proper overtime wages since January 1, 2016. Waiting until June 1, 2019, to file your lawsuit means you are only allowed to seek unpaid wages from June 1, 2017, to June 1, 2019.
The statute of limitations may be extended to three years if an employer’s violation of the FLSA was willful. An FLSA violation is deemed willful if the employer knew that its conduct was prohibited by the FLSA or showed reckless disregard.
Penalties for Violations
Under federal law, employers who fail to pay proper overtime wages may be liable for up to double the amount of unpaid back wages plus costs and attorney’s fees incurred by employees. These cases can be brought by overtime pay lawyers on a class or collective basis on behalf of all workers who were subjected to the same illegal pay practices.
Layoffs, Plant Closings and WARN Notices
The Worker Adjustment and Retraining Notification Act (WARN) offers protection to Iowa workers, their families and communities by requiring employers to provide notice 60 days in advance of covered plant closings and covered mass layoffs. This notice must be provided to either affected workers or their representatives (e.g., a labor union).
An employer who violates the WARN Act by failing to provide appropriate notice is liable to each employee for an amount up to 60 days back pay and benefits for the period of violation.
Lore Law Firm is On your side
At the Lore Law Firm, we represent salaried, hourly, and day-rate workers in an array of employment litigation matters, including unpaid overtime compensation claims in Iowa. Our attorneys, and the Iowa overtime law attorneys we associate with, are passionate about protecting the rights of workers and have helped recover millions of dollars in unpaid overtime wages for our clients.
Contact us for a free and confidential review of your situation.