Iowa Termination Laws

In Iowa, termination laws outline the rules for how an employee can be dismissed, aiming to ensure that the process is fair and lawful. Both employers and employees need to be aware of these regulations to handle terminations correctly and minimize potential conflicts.

This article covers the main points of Iowa’s termination laws, providing a thorough overview of employee rights and responsibilities.

This Guide Covers

Legal Considerations for Termination in Iowa

At-Will Employment in Iowa

• What is At-Will Employment?
• What are the Exceptions to At-Will Employment in Iowa?
• Employment Under Contract in Iowa

Lawful Termination in Iowa

• Legal Grounds for Termination in Iowa
• How Do I File a Wrongful Termination Claim in Iowa?

Legal Protections During Termination in Iowa

Terminated Employee Benefits in Iowa

Layoffs in Iowa

Resignations in Iowa

• Voluntary Resignations
• Involuntary Resignations

Legal Cases Related to Wrongful Termination in Iowa

Legal Considerations for Termination in Iowa

In Iowa, legal considerations for termination primarily revolve around ensuring compliance with federal and state laws, and company policies. Considerations include:

• Discrimination and Retaliation: Employers must comply with federal and state anti-discrimination laws. This includes avoiding discrimination based on their protected characteristics (age, race, color, sex, national origin, or disability). Employers cannot retaliate against employees for exercising their rights,
• Public Policy Exception: Termination is considered wrongful if it violates an established public policy, such as firing an employee for serving on a jury or reporting illegal activities.
• Implied Contract: An employee may have a claim if termination contradicts an implied contract or the employer’s policies such as a promise of job security.
• Employment Contract: If there is an employment contract in place, it should be reviewed to ensure termination complies with the terms outlined, including notice requirements and severance provisions.
• Final Paycheck: Iowa law requires that the final paycheck be provided by the next regular payday.
• Unemployment Benefits: Employees who are terminated may be eligible for unemployment benefits, provided they meet other eligibility requirements. However, if an employee is terminated for misconduct, they may be disqualified from receiving benefits.
• Documentation: Employers should maintain thorough documentation of the reasons for termination, any disciplinary actions taken, and communications with the employee to protect against potential legal claims.

At-Will Employment in Iowa

What is At-Will Employment?

At-will employment in Iowa means that an employer or employee can terminate the employment relationship at any time, for any reason, as long as it is not illegal. This means that either party can end the employment without providing notice or cause unless there is a contract or agreement that specifies otherwise.

What are the Exceptions to At-Will Employment in Iowa?

In Iowa, there are several key exceptions to the at-will employment doctrine that protect employees from wrongful termination. These exceptions include:

• Discrimination: Employers cannot terminate employees based on discrimination. This includes race, color, national origin, sex, religion, disability, or age. If an employee is fired for reasons related to these protected categories, the termination may be deemed unlawful.
• Retaliation: Employees cannot be terminated as retaliation for asserting their rights or engaging in protected activities. This includes actions such as reporting unsafe working conditions, participating in workplace investigations, or exercising rights under family and medical leave laws. Retaliatory terminations are illegal and can lead to claims against the employer.
• Public Policy Exceptions: Terminations cannot violate public policy. For example, an employee cannot be fired for refusing to engage in illegal activities, serving on a jury, or taking time off to vote. Such terminations are considered wrongful because they violate the broader principles of public policy.
• Contractual Agreements: If an employment contract or collective bargaining agreement specifies conditions for termination, these conditions must be followed. Such agreements may outline procedures for dismissal, required notice periods, or reasons for termination. Firing an employee in violation of these contractual terms can be deemed a breach of contract.
• Implied Contract: An implied contract may be established through company policies, employee handbooks, or verbal assurances that suggest job security or specific reasons for termination. If an employee is terminated in a manner inconsistent with these implied terms, the termination may be challenged as a wrongful discharge.

Employment Under Contract in Iowa

In Iowa, employment under contract differs significantly from at-will employment by providing a more structured and predictable employment framework. Employment contracts are formal agreements often expressed in writing and specify detailed terms of employment, such as duration, job responsibilities, compensation, and conditions of termination. It must comply with both state and federal employment laws.

For instance, a contract might specify that an employee can only be terminated for cause, including misconduct or failure to meet performance standards. Contracts may also include provisions for termination without cause, often requiring notice or severance pay. When it comes to enforcement, if either party fails to adhere to the contract terms, it may lead to a breach of contract claim.

Lawful Termination in Iowa

Legal Grounds for Termination in Iowa

Employee termination in Iowa is generally permitted if it does not violate legal protections or contractual agreements. Legal grounds for termination include:

• Performance Issues: Employers can terminate employees based on poor performance or failure to meet job expectations as long as the performance issues are documented and communicated. This includes situations where an employee completely fails to meet productivity or quality standards despite feedback and opportunities to improve.
• Misconduct: Employees may be terminated for misconduct, such as theft, dishonesty, or violation of company policies. Misconduct must be documented, and the employee should be allowed to address or rectify the behavior if company policy requires it.
• Reduction in Force: Termination can occur due to economic reasons such as company downsizing, restructuring, or financial difficulties. In such cases, layoffs or position eliminations are permissible as long as the process is not discriminatory or retaliatory.
• Violation of Company Policies: Employers have the right to terminate employees who violate established company policies or procedures. This includes breaches of workplace rules, safety regulations, or confidentiality agreements, provided these policies are clearly communicated and consistently enforced.
• End of Employment Contract: Termination is allowed at the end of a fixed-term employment contract or project-based role. In these cases, the termination is in line with the contractual terms and does not require additional justification.

Read our comprehensive guide to firing employees in Iowa for further information.

How Do I File a Wrongful Termination Claim in Iowa?

To file a wrongful termination claim in Iowa, employees are encouraged to gather all relevant documents related to the termination, such as termination letters, performance reviews, and any relevant communications. Review your employment contract or any collective bargaining agreements to identify any specific termination procedures that may have been violated. Determine the basis of your claim, which could involve discrimination, retaliation, breach of contract, or violation of public policy.

Employees who believe they have been wrongfully terminated can file a complaint with the Equal Employment Opportunity Commission (EEOC) or the Iowa Civil Rights Commission (ICRC).

Legal Protections During Termination in Iowa

In Iowa, termination of employment is governed by the following federal and state laws:

• Title VII of the Civil Rights Act of 1964: Title VII of the Civil Rights Act of 1964 prohibits employment discrimination based on race, color, religion, sex, or national origin. In Iowa, this means employers cannot terminate employees for these protected characteristics. The law requires employers to provide equal employment opportunities and fair treatment regardless of these attributes.
• Age of Discrimination in Employment Act (ADEA): The Age of Discrimination in Employment Act (ADEA) protects employees aged 40 and older from discrimination based on age. This means employers cannot terminate employees solely because of their age. The act ensures that older workers have equal opportunities in hiring, promotion, and termination decisions.
• Americans with Disabilities Act (ADA): The Americans with Disabilities Act (ADA) prohibits discrimination against individuals with disabilities in all areas of public life, including employment. The act ensures that qualified individuals are provided equal opportunities in the workplace. Termination related to disability without proper accommodation or justification may be considered unlawful.
• Family and Medical Leave Act (FMLA): The Family and Medical Leave Act (FMLA) entitles eligible employees to take unpaid leave for specified family and medical reasons without the risk of job loss. The act ensures that employees can take leave for personal or family medical issues and return to their positions without facing termination.
• Occupational Health and Safety Act (OSHA): The Occupational Safety and Health Act ensures that employees are provided with a safe and healthy working environment. This means that employees in Iowa cannot be terminated for reporting unsafe working conditions or for exercising their rights under OSHA regulations. The law protects employees who raise safety concerns or participate in inspections and investigations. Termination related to safety complaints can be challenged as retaliatory and unlawful.
• Whistleblower Protection Act: The Iowa Code 70A.28 safeguards public employees who report illegal activities or misconduct by their employer. Employees cannot be terminated for disclosing fraud, illegal practices, or other significant violations of law. If an employee is fired for reporting such activities, the termination may be deemed unlawful.
• Iowa Civil Rights Act: The Iowa Civil Rights Act prohibits employment discrimination based on race, color, religion, sex, sexual orientation, gender identity, national origin, age, or disability. This state law provides protections similar to federal laws but is specific to Iowa. Employers cannot terminate employees based on these protected characteristics.
• Iowa Wage Payment Collection Act: Under Iowa Code Chapter 91A, this act addresses wage payment and collection issues, including the requirement for employers to pay all wages due at the time of termination. In Iowa, employees are protected from termination for demanding payment of earned wages or for reporting violations of wage payment laws.

Terminated Employee Benefits in Iowa

Terminated employees in Iowa may be entitled to various benefits and rights, which can depend on the circumstances of their termination and the terms of their employment. Terminated employee benefits in Iowa include:

• Unemployment Benefits: Employees who are terminated may be eligible for unemployment benefits if they meet certain criteria. Eligibility requires that the employee was terminated through no fault of their own, such as a layoff or a reduction in force, rather than for misconduct or voluntary resignation. Employees can apply for unemployment benefits through the Iowa Workforce Development (IWD). When filing a claim, employees are advised to provide information about their employment history and reasons for termination.
• Final Paycheck: Iowa law requires that terminated employees be paid their final paycheck on the next regular payday. This includes payment for all earned wages, unused vacation time, and any other compensation due.
• Health Insurance and COBRA: Health insurance continuation options in Iowa are available through both the federal Consolidated Omnibus Budget Reconciliation Act (COBRA) and the Iowa Mini-COBRA program. Federal COBRA requires employers with 20 or more employees to offer continuation of health coverage to eligible employees and their dependents. Under COBRA, eligible individuals can maintain their health insurance coverage at their own expense for up to 18 months. In addition to federal COBRA, Iowa offers Mini-COBRA, which provides similar continuation coverage options but is specifically designed for companies with 2 to 19 employees who do not meet the eligibility requirements for federal COBRA.
• Severance Pay: Severance pay is not required by Iowa law but may be offered based on company policy or employment agreements. If provided, it is typically outlined in the employee’s contract or company policy. In cases of layoff, severance payment or wages in lieu of notice are paid for work days occurring during the notice period and must be equivalent to the regular pay the employee would earn during those workdays.

Layoffs in Iowa

In Iowa, layoffs are regulated under both state and federal laws. The federal Worker Adjustment and Retraining Notification (WARN) Act covers larger employers, specifically those with 100 or more employees. This law requires a 60-day notice for plant closings or mass layoffs. A plant closing occurs when 50 or more employees, or 33% of the workforce, are permanently laid off within a 30-day period. The federal WARN Act is enforced by the U.S. Department of Labor and the United States District Courts.

The Iowa Worker Adjustment and Retraining Notification (WARN) Act applies to companies with 25 or more employees and mandates notice in cases of permanent or temporary shutdown or a mass layoff affecting 25 or more employees for a period exceeding six months. Under this state law, employers must provide a 30-day notice before the event.

Here’s a quick comparison between the state and federal WARN Act.

Both laws aim to provide employees with advance notice and allow time for them to prepare for the impact of a layoff.

Resignations in Iowa

In Iowa, resignations occur when an employee decides to leave their job, either voluntarily or involuntarily.

Voluntary Resignations

A voluntary resignation occurs when an employee leaves the job of their own accord. While Iowa does not have a specific law mandating a notice period for resignations, it is common practice to provide at least two weeks’ notice. Iowa employers require that the employer must pay the final wages by the next regular payday. Employees who voluntarily resign may not be eligible for unemployment benefits.

Involuntary Resignations

Involuntary resignation, often referred to as constructive discharge, occurs when an employee resigns due to intolerable working conditions imposed by the employer. This includes a significant reduction in pay or benefits, unsafe working conditions, harassment, or discrimination.

In Iowa, if an employee resigns due to constructive discharge, they may have grounds for wrongful termination. The employee must show that the conditions were severe enough to force a reasonable person to resign.

Legal Cases Related to Wrongful Termination in Iowa

Iowa University Pays $1.1 Million for Wrongful Termination Over ADA Violation

In the case of Lynne Seabrooke v. Upper Iowa University (UIU), Lyenne Seaborke was an assistant registrar of international programs at Upper Iowa University. Seabrooke suffered from depression and post-traumatic stress disorder, which made her request for reasonable accommodations from her supervisors, including a shorter work week, lighter workload, and a desk by a window. Instead of accommodating her needs, her supervisors significantly increased her workload and terminated her employment shortly thereafter. This exacerbated her condition, leading to severe depression and a suicide attempt.

Lynne sued the University for violating the Americans with Disabilities Act, and the jury awarded Seabrooke $1,100,000 in back wages and punitive damages.

Key lessons learned from this case:

• Employers must comply with the ADA by providing reasonable accommodations for employees with disabilities, neglecting to accommodate employees’ needs can exacerbate their conditions.
• The case shows that failure to adhere to ADA regulations can result in substantial awards for damages, highlighting the need for employers to proactively address accommodation requests and legal obligations.
• Employers are encouraged to create a supportive and inclusive work environment for employees with disabilities.

Learn more about Iowa Labor Laws through our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.