Iowa Labor Law Guide

Iowa is located in the Midwestern United States. In 2023, the state had a population of approximately 3.2 million people and a gross domestic product (GDP) of $220 billion USD. Iowa’s economy is heavily reliant on agriculture, with corn and soybean production being major drivers. Other important sectors include manufacturing, finance, and insurance, making the state a hub for various industries. Iowa is considered business-friendly due to its relatively low taxes and reasonable labor regulations, creating a supportive environment for employers.

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Minimum Wage

$7.25 per hour

Overtime Wage

1.5x regular rate for hours > 40 per week

Meal Breaks

None required

Rest Breaks

None required

Minimum Wage Mandates

Iowa follows the federal minimum wage of $7.25 per hour as of 2024. There are no counties or cities in Iowa that mandate a higher minimum wage than the state or federal rate.

Tipped employees must be paid a base wage of $4.35 per hour, as long as their tips bring their total earnings to at least $7.25 per hour.

Overtime Rules

Iowa follows federal overtime laws as outlined in the Fair Labor Standards Act (FLSA). Non-exempt employees are required to be paid 1.5 times their regular hourly rate for any hours worked over 40 in a workweek. There are no daily overtime requirements for hours worked in a single day.

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Alternate Workweek Agreements: Iowa does not have specific state provisions for alternate workweek arrangements, but such agreements can be implemented if they adhere to federal labor standards.

Exemptions: Certain employees, such as executive, administrative, and professional workers, may be exempt from overtime rules if they meet specific salary and duties requirements.

Meal and Rest Breaks

Meal Breaks: Iowa does not require employers to provide meal breaks for adult employees. However, many employers voluntarily offer a 30-minute unpaid meal break for shifts longer than 6 hours.

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Rest Breaks: Iowa does not mandate rest breaks for employees. It is common practice, though not required, for employers to offer short paid rest breaks, typically 10 minutes for every 4 hours worked.

Rules for Young Employees: Minors under 16 years of age must receive a 30-minute meal break if they work more than 5 hours in a day. Employers must also comply with federal FLSA regulations regarding the employment of minors, which restricts the hours and types of work they can perform.

Paid Leaves and Time Off

Paid Sick Leave Laws: Iowa does not have a state-mandated paid sick leave law. Employers may provide paid sick leave at their discretion, but it is not required by law.

Accrual and Usage of Sick Leave: Sick leave accrual and usage policies are typically determined by the employer, in the absence of state regulations.

Paid Time Off (PTO) Laws: Iowa does not require employers to provide paid time off (PTO) for vacations or personal days. Employers that do offer PTO may establish their own accrual and usage policies.

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Other Leave Laws:

  • Jury Duty Leave: Employers must provide time off for employees serving on a jury, though this leave may be unpaid.

  • Parental Leave: Iowa follows the federal Family and Medical Leave Act (FMLA), which provides up to 12 weeks of unpaid leave for new parents or those caring for a seriously ill family member.

  • Bereavement Leave: There are no state laws mandating bereavement leave, but many employers offer it voluntarily.

  • Voting Leave: Iowa law requires employers to provide up to 3 hours of paid time off for employees to vote, provided their work schedule does not allow sufficient time to vote outside of working hours.

FMLA Eligibility: Employees are eligible for FMLA leave if they have worked for a covered employer for at least 12 months and have logged at least 1,250 hours in the past year.

Exempt vs. Non-Exempt Classification

Exempt Employees:

  • Salary Basis: Exempt employees must be paid a set salary rather than an hourly wage.

  • Salary Level: The minimum salary for exempt employees is $684 per week under federal law.

  • Duties Test: Exempt employees must primarily perform executive, administrative, or professional duties to be classified as exempt. Iowa follows federal regulations for determining exempt status.

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Non-Exempt Employees:

  • Hourly Pay Rules: Non-exempt employees must be paid at least the federal minimum wage of $7.25 per hour.

  • Overtime Wage Rules: Non-exempt employees are entitled to overtime pay at 1.5 times their regular hourly rate for all hours worked over 40 in a workweek.

Equal Pay Act

The federal Equal Pay Act requires that men and women receive equal pay for equal work. Iowa does not have additional state-level equal pay laws, but it complies with the federal Equal Pay Act.

Employers must also adhere to Title VII of the Civil Rights Act of 1964, which prohibits employment discrimination based on race, color, religion, sex, or national origin.

Rules for hiring and firing employees in the state of Iowa

At-Will Employment: Iowa is an at-will employment state, meaning that either the employer or employee can terminate the employment relationship at any time, for any reason, as long as the reason is lawful.

Anti-Discrimination Laws: Iowa’s Civil Rights Act prohibits discrimination in hiring, firing, and other employment decisions based on race, religion, color, sex, sexual orientation, gender identity, age, disability, and other protected characteristics.

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Equal Employment Opportunity (EEO) Act: Iowa follows both state and federal EEO laws, which ensure fair employment practices and prohibit discrimination based on protected categories.

Background Verification Rules: Employers in Iowa can conduct background checks but must comply with the Fair Credit Reporting Act (FCRA) and other relevant federal and state regulations regarding the use of criminal or credit history in hiring.

Work Eligibility Verification Rules: Employers are required to verify the eligibility of employees to work in the U.S. by completing the federal I-9 form.

Final Paychecks: Iowa law requires employers to issue final paychecks by the next regular payday following the employee’s termination.

Unemployment Compensation Rules: Employees who are terminated without cause may be eligible for unemployment benefits, provided they meet the eligibility requirements set by Iowa’s Department of Workforce Development.

Compliance with WARN Act: Employers must follow the federal Worker Adjustment and Retraining Notification (WARN) Act, which requires 60 days’ notice for mass layoffs or plant closures.

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