Compliance Watch:

What are my rights as a salaried employee in Iowa?

A salaried employee refers to any worker who receives a fixed predetermined compensation at the end of every pay period regardless of the hours worked, quantity, and quality of their work. 

According to Iowa salaried employee laws, a pay period in Iowa can be bi-weekly, semi-monthly, or monthly based on an employer’s preference. However, once a specific pay period has been established, salaries should be paid consistently on the set payday. The only exception to Iowa’s payday rule is the payment of salaries to employees in commission-based positions. The state’s labor laws require employers to pay these employees at least every 12 days excluding Sundays and legal holidays. Salaries in Iowa are paid in U.S. currency using any written instrument that is negotiable on demand. However, employees can agree to other modes of payment in writing. 

Salaried employment in Iowa is classified into two categories based on eligibility for minimum wage and overtime laws. One category of salaried employees is exempt from minimum wage and overtime while the second is non-exempt and eligible for both overtime and the state’s minimum wage of $7.25 per hour.

Please note that this table outlines general differences between salaried and hourly employees in Iowa. Learn more about hourly employee rights in Iowa. The specific circumstances for each category of employees can vary widely based on the employer, industry, job classification, and individual agreements. It’s important to consider these factors when making employment-related decisions or comparisons in the state of Iowa.

Iowa has a set of employment rights and regulations that protect the interests of employees. These include:

1. Minimum Wage: Salaried employees in Iowa who are bound by the state’s overtime and minimum wage laws have the right to receive at least the state’s minimum wage of $7.25 per hour as compensation for their labor. Exempt salaried employees in the state, on the other hand, are entitled to compensation of at least the federal minimum salary threshold of $844 per week ($43,888 per year). 
2. Overtime Pay: Eligible salaried employees in Iowa are entitled to overtime pay for all time worked over 40 hours in a workweek. Overtime is compensated at a rate of 1.5 times the regular rate. Please note that some salaried employees in the state are not eligible for overtime pay regardless of hours worked in a workweek. Eligible employees of public agencies can opt for compensatory time in lieu of monetary compensation for overtime. 
3. Harassment: Salaried employees in Iowa are entitled to a workplace environment that is free from harassment, including sexual harassment and retaliation, as per the Iowa Civil Rights Act and the Equal Employment Opportunity Commission (EEOC).
4. Family and Medical Leave: Eligible salaried employees are entitled to up to 12 weeks of unpaid leave for certain family or medical reasons under the Family and Medical Leave Act (FMLA).
5. Meal and Rest Breaks for Minors: Iowa labor laws do not require employers to provide paid or unpaid breaks for adult salaried employees. However, minor employees are entitled to 30-minute breaks for every five consecutive hours of work. Although the Iowa Code does not mandate specific meal or rest breaks, an employer may opt to offer breaks to their employees. In such instances, short breaks of up to 20 minutes should be paid. Longer breaks can be unpaid but an employee should be relieved of all their duties completely for the entire duration of the break.
6. Anti-Discrimination: The Iowa Civil Rights Act protects all employees from workplace discrimination based on the following protected characteristics: color, creed gender identity, marital status, mental disability, national origin, physical disability, race, religion, age, gender, and sexual orientation.

Yes, while some salaried employees are not eligible for overtime in Iowa, the basis of compensation alone does not preclude all salaried employees from entitlement to overtime pay or compensatory time for working more than 40 hours in a workweek. That said, overtime pay does not apply to the following categories of salaried employees according to Iowa overtime laws:

• Salaried Executive, Administrative, or Professional Employees: Employees who meet the criteria for executive, administrative, and professional exemptions as listed by the Federal Labor Standards Act (FLSA) are not eligible for overtime pay. 
• Computer Professionals: Some computer professionals, including computer systems analysts, programmers, and software engineers, are not eligible for overtime if they meet the FLSA’s criteria.
• Outside Salespersons: Certain sales employees who primarily work outside their employer’s premises may not be eligible for overtime.
• Agricultural Workers: Some agricultural employees may be exempt from overtime depending on the nature of their work and the number of employees their employer has.

Yes. The Iowa Code allows employers to deduct wages from the salaries of their employees under the following circumstances:

• Employers can withhold a portion of an employee’s salary if they are required to do so by a court of law, federal, or state laws. 
• An employee can authorize deductions in writing for any legal purpose for their benefit.

All other pay deductions are prohibited. The Iowa Code highlights the following prohibited deductions:

• Cash shortages in tills that are operated by two or more people.
• Losses from dishonored checks accepted by an employee for products sold or services rendered to customers.
• Losses from broken or destroyed property or nonpayment of goods. Please note that these deductions are prohibited only if they did not result from an employee’s negligence.
• Lost or stolen property that was not assigned to an employee.
• Relocation costs of more than $20 incurred in an employee’s relocation to their place of employment.

Salaried employees are not eligible for meal or rest breaks, paid or unpaid, as per Iowa break laws. However, minor employees are entitled to 30-minute breaks for every five consecutive hours of work. 

Although the Iowa Code does not mandate specific meal or rest breaks, an employer may opt to offer breaks to their employees. In such instances, short breaks of up to 20 minutes should be paid. Longer breaks can be unpaid but an employee should be relieved of all their duties completely for the entire duration of the break.

The FLSA designated flexible work arrangements as a matter of private agreements between employers and employees or their representatives. Similarly, Iowa state laws do not address flexible work arrangements. However, the state encourages employers to offer alternative work arrangements. Iowa has a telework program for its departments. The program allows state employees to request flexible work arrangements if their duties can be completed offsite.

Exempt status refers to an employee’s exclusion from Iowa’s minimum wage and overtime laws. Therefore, exempt employees in the state are not entitled to any overtime pay or compensatory time regardless of hours worked.

The following are some of the implications of exempt status for employees in Iowa:

• Basis of Compensation: Exempt employees typically receive a fixed salary that meets or exceeds the federal minimum salary threshold of $844 per week.  
• Exemption Categories: Exempt employees typically fall under specific categories, including executive, administrative, professional, or outside sales employee categories. Each category has distinct criteria for exemption.
• Overtime Pay: Exempt employees are not subject to overtime laws. Therefore, they are not entitled to overtime pay for time worked above 40 hours in a workweek. 
• Minimum Wage: Exempt employees are not subject to minimum wage laws. Therefore, they are not entitled to the state’s minimum wage rate of $7.25. Instead, their salary should meet or exceed the federal minimum salary threshold.
• Job Duties and Responsibilities: Exempt status is pegged on an employee’s job duties and responsibilities. As such, the primary job duties of an exempt employee must align with the criteria for their exemption category.

Exempt status has the following implications for employers:

• Overtime Exemption: Since exempt employees are not eligible for overtime for working over 40 hours in a workweek, employers can save on their wage bill by not paying time-and-a-half for extra hours worked.
• Salaried Compensation: Exempt employees are entitled to a fixed salary, which simplifies payroll and budgeting for employers. Further, the consistent salary structure and amount makes forecasting labor costs easier.
• Record-Keeping: Employers are not required to maintain detailed time and attendance records for exempt employees, leading to reduced administrative burdens and paperwork.

Please note that employment laws are dynamic. This table provides a general comparison of the definitions, entitlements, and other distinctions between exempt and non-exempt employees. It’s important to consult the latest state and federal regulations or seek legal advice for more up-to-date information.

In Iowa, employee classification as exempt or non-exempt is primarily governed by the Fair Labor Standards Act (FLSA). Here is an outline of the tests you can use to determine whether you are exempt or non-exempt:

1. Salary Basis Test: To qualify as exempt, an employee must be paid on a salary basis. Further, their salary should be fixed and not subject to reduction based on the number of hours worked in a workweek, or the quality, or quantity of work done.
2. Salary Level Test: The salary of an exempt employee must meet the federal minimum threshold of $844 per week or $43,888 annually.
3. Duties Tests: Exempt employees perform specific job duties that fall under one of the following exempt categories.
4. • Executive Employees: To qualify for the executive exemption, an employee must pass the salary basis and level tests, be involved in the management of an enterprise or one of its divisions or departments, routinely direct the work of more than one employee, and have the authority to hire and fire employees.
   • Administrative Employees: Administrative employees who pass the salary basis and salary level tests qualify as exempt if they perform office or non-manual work directly related to management or general business operations and exercise discretion and independent judgment on significant matters.
   • Professional Employees: Professionals such as lawyers and doctors, and creative professionals such as writers who pass the salary basis and level tests qualify as exempt if they perform work that requires advanced knowledge or creativity.
   • Outside Sales Employees: Sales employees whose primary duties involve making sales or obtaining orders outside the employer’s premises are exempt if they meet the salary basis and salary level criteria. 

It’s crucial to note that employment laws and regulations can change. To ensure that you are classified properly, it’s advisable to consult legal experts or contact the Iowa Division of Labor.

Non-exempt salaried employees in Iowa, who are subject to the state’s minimum wage requirements, are entitled to a minimum wage of $7.25 per hour. Exempt employees, on the other hand, are entitled to the federal minimum salary threshold of $684 per week.

Eligible salaried employees in Iowa earn overtime pay at a rate of 1.5 times their regular pay for all time worked more than 40 hours in a workweek. Employees of state agencies who are eligible for overtime pay can opt for compensatory time according to the provisions of the FLSA. Compensatory pay is compensated at a rate of 1.5 hours for every overtime hour worked.

Employers in Iowa are only allowed to make the following deductions from their employees’ salaries:

• Employers can withhold a portion of an employee’s salary if they are required to do so by the order of a court of law, federal, or state laws. Permissible deductions that are required by law include wage garnishments for spousal and child support and taxes.
• An employee can authorize deductions in writing for any legal purpose for their benefit. Permissible voluntary deductions include health plans and contributions to retirement funds. Additionally, Iowa is a right-to-work state and employers are allowed to deduct union dues with the explicit written authorization of the employees. Authorization to deduct union dues can be revoked at any time but an employee must issue their employer one-month notice to stop the deductions.

Chapter 91A of the Iowa Code prohibits deductions for the following purposes explicitly:

• Cash shortages in tills that are operated by two or more people.
• Losses from dishonored checks accepted by an employee for products sold or services rendered to customers.
• Losses from broken or destroyed property or nonpayment of goods. Please note that these deductions are prohibited only if they do not result from an employee’s negligence.
• Lost or stolen property that was not assigned to an employee.
• Relocation costs of more than $20 incurred in an employee’s relocation to their place of employment.

Iowa state laws guarantee the following employee benefits and protections:

• Workers’ Compensation:  Salaried employees who are injured or become ill while working have the right to file workers’ compensation claims as per Iowa’s Workers’ Compensation Laws. The laws preclude pre-existing conditions unless the conditions in the workplace exacerbate them. Workers who become ill or sustain injuries due to work activities are entitled to medical, disability, death, and vocational education benefits.
• Whistleblower Protection: Iowa has a whistleblower protection program that protects employees who report safety hazards and other labor law violations from retaliation through adverse employment actions. 
• Privacy: Employees in Iowa have a reasonable expectation of privacy in the workplace. Employers cannot disclose the information in an employee’s records.
• Minimum Compensation: The Iowa Code establishes a state minimum wage and recognizes the federal minimum salary threshold for exempt employees.
• Protection from Discrimination and Harassment: Iowa law prohibits workplace discrimination in hiring, promotion, and provision of employee benefits based on protected characteristics. Employees in the state are also protected from any form of harassment in the workplace.

Employers in Iowa can violate their employees’ rights by paying them less than the minimum wage, failing to pay eligible employees overtime for working beyond 40 hours in a workweek, misclassifying employees as exempt or non-exempt, failing to provide breaks for minors, discriminating against employees, harassing, and retaliating against employees for reporting labor law violations.

An employee can report any of these violations to the State of Iowa Department of Administrative Services Human Resource Enterprise by filling out the employee complaint form. To report wage-related violations and claim withheld wages, you can fill out a wage claim form and submit it to the Commissioner of the Iowa Division of Labor.