Introduction to employment laws in Iowa
Overview
As well as federal protections, Iowa’s state laws address minimum wage, workplace safety, and anti-discrimination, ensuring essential protections for workers.
While Iowa’s labor laws are not as strict as in some states, understanding and following these regulations is vital for maintaining a compliant workplace. In this guide, we’ll help keep you compliant as you onboard and manage workers in Iowa.
Employing in Iowa: Key employment laws and practices
Standard work hours
The state’s Division of Labor regulates the standard work hours in Iowa in accordance with the Fair Labor Standards Act (FLSA). Full-time employment typically ranges between 30 and 40 hours per week; however, this can vary based on industry norms and business requirements.
For contractual employees, working hours may differ greatly depending on the contracted job scope, ranging from fixed-hour commitments to project-based agreements.
Self-employed or freelance workers have no set work hours by law. Their working schedule usually depends on individual arrangements they have with their clients or projects.
Minimum wage and overtime
In line with the federal FLSA, Iowa mandates a minimum wage of $7.25 per hour for private sector employees. This rate is subject to change based on annual reviews and amendments to state or federal laws.
Federal law also governs overtime rules, with non-exempt employees entitled to 1.5 times their regular pay rate for any hours worked beyond 40 in a week.
Certain roles, such as executive, managerial, and certain certified professions, may be exempt from overtime, depending on their salary threshold, which currently stands at $684 per week in Iowa.
Insurance and benefits
Iowa employers are required to provide certain benefits such as workers’ compensation insurance, unemployment insurance, and disability insurance, which is consistent with state and federal mandates.
While not stipulated by law, healthcare benefits are typically provided through private insurance companies and are often an integral part of the employee compensation package. Other benefits, such as retirement plans and paid leave, are largely discretionary, but businesses often offer them to attract and retain talent. Iowa law also mandates healthcare continuation coverage obligations for smaller employers.
Benefit | Description |
Workers’ compensation Insurance | Mandatory for most employers, providing compensation for work-related injuries or illnesses |
Unemployment insurance | Funded by employer taxes, providing temporary income support for unemployed workers |
Disability insurance | Optional benefit that provides income protection for employees unable to work due to disability |
Health insurance | Typically offered by employers as part of the compensation package |
Retirement plans | Optional but often provided by employers to attract and retain talent |
Meal and rest periods
Under Iowa employment laws, certain regulations regarding meal and rest periods during work hours apply. Although no specific legislation requires employers to provide rest breaks or meal breaks for adult employees, there are laws applicable to minors.
If employees aged under 16 work for a continuous period of five hours, they should receive a break of at least 30 minutes. This requirement aligns with general practice and the schedule flexibility that many Iowa businesses offer.
Depending upon the nature of the job, federal laws may apply. For instance, for jobs that require constant attention (like truck driving or air traffic control), mandatory rest periods are prescribed under federal law.
Multiplier makes it easy to manage benefits for Iowa employees.
Anti-discrimination laws
Iowa employment laws strongly emphasize anti-discrimination in the workplace. The Iowa Civil Rights Act (ICRA) prohibits employers with four or more employees from discriminating based on protected characteristics such as age (18 years and above), race, color, sex, pregnancy, national origin, religion, disability, gender identity, and sexual orientation.
The ICRA also considers harassment as a form of illegal discrimination. Therefore, it is crucial for employers in Iowa to create workplace policies that prevent any form of harassment based on protected classes.
Retaliation against an employee who has lawfully opposed a discriminatory practice or filed a complaint under ICRA is strictly prohibited. An employer in Iowa is required to provide an interpreter if more than 10% of their workforce comprises non-English speaking employees who speak the same language.
Employees have the right to access their personal records (excluding employment references), including performance evaluations and disciplinary records.
Leave policies
In Iowa, employment laws outline various types of leave policies for employees: vacation leave, sick leave, parental and maternity Leave, bereavement Leave, jury duty leave, military leave, and others.
Leave type | Legislation | Details |
Vacation leave | No state law | No state law mandates that employers provide their employees with paid or unpaid vacation benefits. However, if an employer chooses to provide such benefits, it must comply with the terms of its established policy or employment contract. |
Sick leave | No state law | Iowa does not have a state law requiring private-sector employers to provide employees with paid or unpaid sick leave. |
Parental/ maternity Leave | FMLA | Parental and maternity leave in Iowa follow the guidelines of the federal Family and Medical Leave Act (FMLA). Eligible employees can take up to 12 weeks of unpaid leave for the birth or adoption of a child. |
Bereavement leave | No state law | Iowa employment law does not mandate bereavement leave. If an employer opts to offer it, it should be outlined in the company’s policy or employee contract. |
Jury duty | Iowa Code § 607A.45 | State law requires jury duty leave. Employers must allow employees time off to serve on a jury. It’s important to note that an employer cannot discharge, penalize, or threaten an employee because of jury duty service. |
Military leave | USERRA & Iowa Code § 29A.28 | Military leave in Iowa follows the guidelines established by the federal Uniformed Services Employment and Reemployment Rights Act (USERRA) and Iowa state law. Employees who are members of the state military forces are entitled to a leave of absence for military service |
Easily onboard employees in Iowa?
Termination laws
In Iowa, employment relationships are generally considered “at-will,” meaning that either the employer or employee can terminate the employment relationship at any time and for any reason, unless a law or agreement provides otherwise.
Iowa law does not require employers to provide severance pay. If an employer chooses to offer severance benefits, it must comply with the terms of its established policy or employment contract.
Also, upon termination, whether voluntary or involuntary, employers are obliged to pay the employees their due wages by the next regular payday. Unless there is an agreement stating otherwise, unused vacation time doesn’t need to be paid.
Employers should also be aware that under certain circumstances, such as mass layoffs or business closings, they may be required to provide advance notice under the Worker Adjustment and Retraining Notification (WARN) Act.
Safety and health
Under the Iowa Occupational Safety and Health Act (IOSHA), employers are required to provide a safe and healthy work environment. This includes complying with all relevant safety standards relevant to their industry.
The Smokefree Air Act in Iowa prohibits smoking in public places and all enclosed areas within places of employment, including offices, conference rooms, restrooms, and employer-owned vehicles. Employers are required to communicate this prohibition to employees and display appropriate signage.
Taxes in Iowa
At the federal level, employers are required to withhold federal income tax from their employees’ wages. The amount of federal income tax withheld is based on withholding tables, the employee’s filing status, and the number of allowances claimed on their W-4 form.
In addition to federal income tax, employers must also withhold Social Security and Medicare taxes and match the amount. Currently, the Social Security tax rate is 6.2% for the employer and 6.2% for the employee, up to the maximum wage base. The Medicare tax rate is 1.45% each for both the employer and employee, with no wage base limit.
At the state level, employers in Iowa are required to withhold state income tax from their employees’ wages. The rate of withholding varies depending on the amount of income and the number of exemptions claimed.
|
Tax type |
Employer rate |
Employee rate |
|
Social Security |
6.2% |
6.2% |
|
Medicare |
1.45% |
1.45% |
|
Additional Medicare (on wages over $200,000) |
N/A |
0.9% |
|
Federal Unemployment (FUTA) |
6% on first $7,000 per employee |
N/A |
|
State Unemployment (SUTA) |
Varies |
N/A |
|
Other state/local taxes |
Varies by location |
Varies by location |
Managing Iowa employees with an Employer of Record (EOR)
Hiring in Iowa requires compliance with a multitude of employment and labor laws at both the state and the federal levels. To ensure full compliance with these laws, businesses must be aware of regulations related to work hours, overtime, minimum wage, onboarding timeline, payroll cycle, and other key considerations.
This is where Multiplier comes in. As an all-in-one solution, Multiplier aids businesses in navigating the diverse complexities of HR compliance. Multiplier provides an EOR Service solution that enables businesses to legally employ full-time workers in Iowa without establishing a U.S. entity.
We also offer a worldwide payroll platform that will help you run efficient payroll processes for your employees in Iowa, while expertly handling local taxes, contributions, and withholdings.
Check out how the Multiplier platform can streamline your HR and compliance processes when hiring in Iowa. Book a demo today
FAQs
In Iowa, state law generally considers full-time employment as between 30 to 40 hours per week, consistent with the federal regulation of full-time workers.
Under the federal Fair Labor Standards Act non-exempt salaried employees in Iowa are entitled to 1.5x their regular pay rate if they work over 40 hours a week. Exemption depends on the employee’s salary (the threshold being $684 per week), job duties, and profession type.
The Iowa Civil Rights Act (ICRA) prohibits employers with four or more employees from discriminating based on factors like race, sex, age, gender identity, sexual orientation, and disability. Harassment is also illegal under ICRA. Furthermore, employers are not allowed to retaliate against an individual for opposing a practice prohibited by ICRA or for filing a complaint under ICRA.
Indiana laws mandate certain leaves of absence for employees, such as military family leave, military leave, Civil Air Patrol leave, jury duty leave, and emergency responder leave. Understanding these requirements is important to ensure HR compliance in Indiana.
Independent contractors typically aren’t afforded the same leave and wage entitlements as full-time employees in Iowa. Employers should use tools to properly classify workers as employees or independent contractors.
