Iowa Wage Payment Laws - ELH / HR4Sight

Frequency of Wage Payments

An employer must pay employees at least in monthly, semimonthly, or biweekly installments on regularly spaced paydays designated by the employer. An employer must pay employees within twelve (12) days, excluding Sundays and legal holidays, of the end of the pay period. IA Statute 91A.3

Manner of Wage Payments

An employer may pay employees by:

cash,
check redeemable on demand at full face value, or
direct deposit, if the employee has consented in writing and is able to designate the financial institution with which the wages are deposited.

IA Statute 91A.3

Direct Deposit

An employer may pay wages by direct deposit, so long as the employee consents in writing and is able to designate the financial institution with which the wages are deposited. IA Statute 91A.3

Payroll Card

Iowa labor laws do not specifically address whether an employer may pay an employee their wages by payroll card.

Payment upon Separation from Employment

Employees who are fired, discharged, terminated, or laid off

When an employer discharges or lays off an employee, the employer must pay the employee all wages due by the next regular pay day. IA Statute 91A.4

Employees who quit or resign

When an employer quits, the employer must pay the employee all wages due by the next regular pay day. IA Statute 91A.4

Employees who are suspended or resigns due to a labor dispute (strike)

When an employee resigns employment due to a labor dispute, the employer must pay the employee all wages due by the next regular pay day. IA Statute 91A.4

Wages in Dispute

If there is a dispute between an employer and employee concerning the amount of wages or expense reimbursement due, the employer must timely pay, without condition, all wages conceded to be due to the employee and reimburse all expenses conceded to be due, less any lawful deductions. The payment of conceded wages or reimbursement of expenses does not relieve the employer of any liability for the balance of wages or expenses claimed by the employee. IA Statute 91A.7

Deductions from Wages

An employer cannot deduct or withhold wages from an employee’s pay check for any of the following:

a cash shortage in a common money till, cash box, or register operated by two or more employees or by an employee and an employer. However, an employer and a full-time manager may agree in writing signed by both parties that the manager will be responsible for a cash shortage that occurs within forty-five days prior to the most recent regular payday. Not more than one such agreement can be in effect at an establishment;
any losses due to dishonored checks received by an employee if the employee has been given the discretion to accept or reject such checks and the employee does not abuse the discretion given;
any losses due to breakage, damage to property, default of customer credit, or nonpayment for goods or services rendered so long as such losses are not attributable to the employee’s willful or intentional disregard of the employer’s interests;
lost or stolen property, unless the property is equipment specifically assigned to an employee and the employee acknowledged receipt of the item in writing;
gratuities received by an employee from customers of the employer;
costs of personal protective equipment needed to protect an employee from employment-related hazards, unless provided otherwise in a collective bargaining agreement. This does not apply to items of clothing or footwear which may be used by an employee during nonworking hours;
costs of more than twenty dollars for an employee’s return to the place of employment.

An employer may not make any other deductions from 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
The employer has written authorization from the employee for any lawful purpose accruing to the benefit of the employee.

IA Statute 91A.5

Uniforms, Tools, and Other Equipment Necessary for Employment

An employer may require an employee to pay for the cost of a uniform, tools, and other equipment necessary for employment. If a uniform has a logo, company colors, etc., that make the elements of the uniform unusable outside of employment, the employer may not deduct the cost from an employee’s wages. If a uniform is generic, such as a uniform requiring a white blouse or black pants, an employer may deduct the cost of the uniforms from an employee’s wages. IA Div. of Labor Wage & Hour FAQ

Pre-hire Medical, Physical, or Drug Tests

Iowa does not have any laws prohibiting an employer from requiring an applicant or employee to pay the cost of a medical examination or the cost of furnishing any records required by the employer as a condition of employment.

Notice of Wage Reduction

The Iowa Workforce Development Division of Labor may require an employer, if it has previously violated wage payment laws, to notify its employees at least one pay period prior to the initiation of any changes to wages or paydays. The notice must either be in writing or posted at a place where employee notices are routinely posted. Otherwise, there is no Iowa law requiring employers to notify employees of changes to wages or other terms and conditions of employment. IA Statute 91A.6

Statement of Wages (Pay Stub)

On each regular payday, an employer must provide a statement to each employee showing:

the hours the employee worked,
the wages earned by the employee, and
any deductions made.

The employer need not provide information on hours worked for employees who are exempt from overtime under the Fair Labor Standards Act (FLSA), unless the employer has established a policy or practice of paying exempt employees overtime, a bonus, or a payment based on hours worked. An employer may comply with this notice requirement by providing each employee access to view an electronic statement of the employee’s earnings and free and unrestricted access to a printer to print the employee’s statement of earnings if the employee chooses. IA Statute 91A.6

Record Keeping Requirements

An employer must maintain and preserve for at least three (3) years payroll or other records containing the following:

name in full, as used for social security record-keeping purposes, and on the same record, the employee’s identifying symbol or number if such is used in place of name on any time, work, or payroll records;
home address, including ZIP code;
date of birth, if under 19;
time of day and day of week on which the employee’s workweek begins. If the employee is part of a workforce or employed in or by an establishment all of whose workers have a workweek beginning at the same time on the same day, a single notation of the time of the day and beginning day of the workweek for the whole workforce or establishment will suffice;
basis of pay by indicating the monetary amount paid on a per hour, per day, per week, per piece, commission on sales, or other basis;
hours worked each workday and total hours worked each workweek (for purposes of this rule, a workday is any fixed period of 24 consecutive hours and a workweek is any fixed and regularly recurring period of seven consecutive workdays);
total daily or weekly straight-time earnings or wages due for hours worked during the workday or workweek, exclusive of premium overtime compensation;
total additions to or deductions from wages paid each pay period including employee purchase orders or wage assignments. Also, in individual employee records, the dates, amounts, and nature of the items which make up the total additions and deductions;
total wages paid each pay period; and
date of payment and the pay period covered by payment.

IA Admin. Code 875-216.2; IA Admin. Code 875-216.6

An employer must keep and preserve for a period of at least two (2) years:

Basic employment and earnings records, including, from the date of last entry, all basic time and earning cards or sheets on which are entered the daily starting and stopping time of individual employees, or of separate workforces, or the amounts of work accomplished by individual employees on a daily, weekly, or pay-period basis (for example, units produced) when those amounts determine, in whole or in part, the pay-period earnings or wages of those employees.
Wage rate tables, including, from their last effective date, all tables or schedules of the employer which provide the piece rates or other rates used in computing straight-time earnings, wages, or salary, or overtime pay computation.

IA Admin. Code 875-216.6

Notice Requirements

The Iowa Workforce Development Division of Labor may require an employer, if it has previously violated wage payment laws, to:

notify its employees in writing at the time of hiring what wages and regular paydays are designated by the employer.
notify its employees at least one pay period prior to the initiation of any changes to wages or paydays. The notice shall either be in writing or posted at a place where employee notices are routinely posted.
make available to its employees upon written request, a written statement enumerating employment agreements and policies with regard to vacation pay, sick leave, reimbursement for expenses, retirement benefits, severance pay, or other comparable matters with respect to wages. Notice of such availability shall be given to each employee in writing or by a notice posted at a place where employee notices are routinely posted.

IA Statute 91A.6