labor law guide
The Iowa employment laws every business owner should know
Wages and breaks
The current minimum wage in Iowa is $7.25.
Minimum wage requirements don’t apply to employers with an annual gross sales volume of less than $300,000, except for the following industries that are not subject to a minimum sales threshold:Laundry and clothing repair, construction or reconstruction, hospital, schools, or public agencies.
The minimum wage for tipped employees is $4.35.
Tipped employees are allowed to participate in a tip pooling or sharing arrangement, but it is not clear whether employers are allowed to require employees to do so.
Employers are required to pay non-exempt employees an overtime rate of 1 ½ times the regular rate of pay for the number of hours worked in excess of 40 in one workweek, according to the Iowa Department of Labor.
The federal overtime law stipulates that the minimum salary requirement for administrative, professional, and executive exemptions is $684 per week, or $35,568 per year.
Iowa does not require employers to provide meal breaks.
Final paychecks in Iowa
Employees who separate from employment for any reason must be paid final wages by the next regular payday.
Iowa child labor laws
14-and 15-year-old minors
Iowa child labor laws require that minors 14 and 15 years of age work only in retail and food service, agriculture, caddying on golf courses, selling gas and oil, and in offices. They may also work in street trades, migrant labor and as models. They may not work in establishments that serve alcohol and are prohibited from working in these hazardous occupations.
When school is in session, minors 14 and 15 years of age may not work during school hours. They may have a maximum of 4 hours worked day outside of school hours, 28 hours a week, and only in between the hours of 7 a.m. and 7 p.m. (4 a.m. to 7 a.m. if they work in street trades, migrant laborers may work from 5 a.m. to 7:30 p.m.).
The same time restrictions apply when school is not in session, except the maximum time increases to 8 hours a day and 40 hours a week.
16- and 17-year-old minors
Minors 16 and 17 years of age may not work in an establishment that sells or serves alcohol and are prohibited from working in these hazardous occupations.
When school is in session, they may not work during school hours, more than 4 hours a day, or more than 28 hours a week.
When school is not in session, minors may work 8 hours a day and 40 hours a workweek.
Employers are not required to provide paid or unpaid sick leave.
Employers may be required to provide employees unpaid leave in accordance with the federal Family and Medical Leave Act.
Employers are not required to provide bereavement leave.
Employers are not required to provide paid or unpaid vacation leave but must comply with their own established policies in their employee handbook if they choose to implement one.
Employers may deny employees payment for accrued vacation leave upon separation or disqualify them from receiving payment for the leave if they fail to comply with specific requirements if it is in their contract.
An employer must pay accrued vacation to an employee upon separation from employment if its policy requires it.
Employers may cap the amount of vacation leave an employee can accrue.
Employers may implement a “use-it-or-lose-it” policy requiring employees to use their vacation time by a set date.
Private employers are not required to provide paid or unpaid time off for holidays.
Employers do not have to pay employees for time spent responding to a jury summons unless their policy stipulates they have to do so, but employees cannot be terminated or otherwise penalized for doing so.
Employers must provide employees with enough paid leave to ensure that an employee has 3 hours when combined with non-working time to vote while the polls are open. The employee must request the leave in writing prior to the day of the vote.
Employers may not discharge or discriminate against an employee because they are a member of the National Guard or armed forces. and must allow them to take leave to serve in the military.After their service, the employee is entitled to return to their job with the same rights to vacation and other employment benefits they would be entitled to if they had not taken the leave.
As long as the employee provides notice in writing that they are a volunteer emergency services, the employer may not discharge them for missing or being late to work because they were responding to an emergency.
If the employee is called for emergency services during work, the employer may decide whether to release them from work to perform emergency services.
The employer may require that the employee provide notice of their need for leave as soon as possible.
The employer may choose whether the leave is paid or unpaid. Afterward, the employer may require that the employee provide documentation confirming they were providing emergency services.
Employers that have four or more employees must treat their employees who have a temporary disability because of pregnancy, childbirth, or related medical conditions the same as employees who have other temporary disabilities.
If leave is not otherwise available or has been exhausted, an employee with a pregnancy-related disability is entitled to leave for the duration of their pregnancy-related disability, up to eight weeks.
Employers cannot take any adverse action against an employee for appearing as a witness in a criminal proceeding or as a plaintiff, defendant, or witness in a civil proceeding involving domestic abuse.
Hiring and firing
Federal law makes it illegal for an employer to discriminate on the basis of: Race, Color, Age, Sex, Sexual orientation, Gender, Gender identity, Religion, National origin, Pregnancy, Genetic information, including family medical history, Physical or mental disability, Child or spousal support withholding, Military or veteran status, Citizenship and/or immigration status.
Additionally, Iowa prohibits discrimination based on AIDS/HIV.
Employers may not inquire about an applicant’s criminal history until an offer of employment has been made.
Click here to read our blog on what acceptable and unacceptable questions to ask during an interview.
Iowa is an employment-at-will state, which means that without a written employee contract, employees can be terminated for any reason at any time, provided that the reason is not discriminatory and that the employer is not retaliating against the employee for a rightful action.
In the case of layoffs and workforce reductions, Iowa requires that employers with at least 25 employees provide 30 days’ written notice to affected employees and the Iowa Workforce Development before closing their business or conducting a mass layoff. The notice must contain the following information:
The company’s name
The company’s address
The company’s business contact information
The date of the closing or mass layoff
The names of affected employees
The address of affected employees
Regarding employment and payroll data, under the Fair Labor Standards Act (FLSA) and others, you must:
For at least 3 years: keep payroll records, certificates, agreements, notices, collective bargaining agreements, employment contracts, and sales and purchase records. Also keep completed copies of each employee’s I-9 for three years after they are hired. If the employee works longer than three years, hold on to the form for at least one year after the employee leaves.
For at least 2 years: Keep basic employment and earning records like timecards, wage-rate tables, shipping and billing records, and records of additions to or deductions from wages. Also keep the records that show why you may pay different wages to employees of different sexes, such as wage rates, job evaluations, seniority and merit systems, and collective bargaining agreements.
For at least 1 year: The Equal Employment Opportunity Commission says employers should keep all employment records for at least one year from the employee’s date of termination.
Other record-keeping laws that may apply to you:
Under the Occupational Safety and Health Act, you need to keep records of job-related injuries and illnesses for five years. But some records, like those covering toxic substance exposure, have to be kept for 30 years.
You must keep files of benefit plans and seniority and merit systems while they are in effect and for at least a year after they end. You must also retain summary descriptions and annual reports of benefits plans for six years.
If your company is covered by the Family and Medical Leave Act, you must also retain relevant records of leaves, notices, policies, and more for three years.
Additional laws that may apply to you.
Iowa does not require drug and alcohol testing of applicants and employees. If employers want to test their employees or applicants for drugs or alcohol, they must comply with extensive requirements. Among other things, a policy that provides for alcohol testing must specify the unacceptable limit, but it may not be lower than .02%.
Certain employers must offer employees the opportunity to attend rehab after a positive alcohol test at work, and all employers must provide information about the dangers of drug and alcohol use in the workplace.
COBRA is a federal law that allows many employees to continue their health insurance benefits after their employment ends. Because federal COBRA only applies to employers that have 20 or more employees, many states have adopted their own versions of the law, which are known as “mini-COBRAs.” Iowa’s mini-COBRA allows employees to continue their coverage for up to nine months. Employers must provide an employee with a notice of their COBRA rights within 10 days of the triggering event.
Employers may not discriminate or retaliate against an employee because the employee opposed any unfair or discriminatory employment practice, obeys the Iowa Civil Rights Act, filed a complaint or participated in a civil rights proceeding, or reported a workplace safety violation.
Employers who run background checks should ensure they’re following the requirements of the Fair Credit Reporting Act, which are available here.
Iowa requires that employers conduct background checks on the following types of employees: police officers, lottery personnel, healthcare personnel, and childcare personnel.
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This summary is not qualified legal advice. Laws are always subject to change, and they can vary from municipality to municipality. It’s up to you to make sure you’re compliant with all laws and statutes in your area. If you need more compliance help, we recommend consulting with a qualified lawyer, checking with your local government agencies, or signing up for Homebase to get help from our certified HR Pros.