The Fair Labor Standards Act sets the baseline rules for minimum wage, overtime, child labor, and recordkeeping for most Iowa workers, and Iowa law adds its own requirements on top in a handful of important areas: a higher cash wage floor for tipped employees, strict rules on pay timing and paycheck deductions, employee access to personnel files, and a recently rewritten child labor statute. Where the two sets of rules overlap and disagree, the stricter standard applies to any employer covered by both.
Minimum Wage in Iowa
Iowa’s minimum wage is $7.25 per hour, the same as the federal rate and unchanged since 2008.1U.S. Department of Labor. State Minimum Wage Laws Cities and counties cannot set a higher local minimum.
Workers under 18 can be paid a training wage of $6.35 per hour for their first 90 calendar days with an employer. Once that window closes, the full minimum wage applies regardless of age. A separate federal certificate program, administered by the U.S. Department of Labor’s Wage and Hour Division, allows subminimum pay for workers whose disabilities affect their productivity on specific tasks, but the certificate has to be in place before any subminimum wages are paid.2U.S. Department of Labor. Subminimum Wage
Tipped Workers
Iowa’s tip-credit rules are tighter than the federal version. The state caps the tip credit at 40 percent of the minimum wage, which means employers must pay tipped workers at least $4.35 per hour in direct cash wages before tips.3U.S. Department of Labor. Minimum Wages for Tipped Employees Under the FLSA alone the cash wage could drop as low as $2.13, but the Iowa floor controls for work performed in the state. If tips plus the cash wage don’t reach $7.25 per hour in any workweek, the employer owes the shortfall.
Employers using the tip credit must tell workers about it in advance. Managers and supervisors cannot keep any share of other employees’ tips or take from a tip pool, even if they do tip-generating work themselves.4U.S. Department of Labor. Fact Sheet 15B – Managers and Supervisors Under the Fair Labor Standards Act and Tips
Overtime
Iowa has no separate overtime statute, so the FLSA controls entirely. Non-exempt employees are owed one and a half times their regular rate for every hour worked beyond 40 in a workweek.5eCFR. 29 CFR Part 778 – Overtime Compensation An employment agreement cannot waive overtime, and hours cannot be averaged across two or more weeks to avoid the premium.
The regular rate used for the calculation is not just the base hourly wage. Non-discretionary bonuses, shift differentials, and commissions generally fold in, which raises the overtime rate above what a simple hourly figure would produce. Getting this wrong is a common source of back-pay claims that stretch across years of pay periods.
Who Is Exempt from Overtime
Iowa follows the federal exemption framework without adding its own tests. To qualify for the most common white-collar exemptions, an employee must earn at least $684 per week ($35,568 per year) on a salary basis.6U.S. Department of Labor. Earnings Thresholds for the Executive, Administrative, and Professional Exemption A relaxed duties test applies to highly compensated employees earning at least $107,432 per year (with at least $684 per week in salary): they only need to customarily and regularly perform one of the exempt duties listed below.
Meeting the salary threshold is only half the test. The employee’s actual day-to-day work has to fit one of these categories:
- Executive: primary duty is managing the business or a recognized department, with regular direction of at least two full-time employees and genuine authority over hiring, firing, or promotion.
- Administrative: primary duty is office or non-manual work directly related to management or general business operations, with discretion and independent judgment on significant matters.
- Professional: work requires advanced knowledge in a field of science or learning, customarily acquired through prolonged specialized education.
- Outside sales: primary duty is making sales or obtaining orders away from the employer’s place of business. No salary threshold applies.
- Computer employees: systems analysts, programmers, software engineers, and similar roles. These workers can be paid at least $27.63 per hour as an alternative to the weekly salary threshold.
The employer carries the burden of proving that a worker is properly classified. Misclassification is one of the most common FLSA violations and often turns on whether the job actually involves the independent judgment or management authority the exemption requires, regardless of what the title says.
When Iowa Workers Must Be Paid
Iowa Code Chapter 91A governs pay timing and deductions, and these obligations go beyond anything the FLSA requires.
Pay Frequency
Employers have to pay wages at least monthly, semimonthly, or biweekly on regular paydays set in advance. A payday cannot fall more than 12 days (excluding Sundays and legal holidays) after the end of the pay period in which the wages were earned.7Iowa Legislature. Iowa Code 91A.3 – Mode of Payment Commission pay can be settled at longer intervals, but no more than 12 months apart.
Final Pay
When an employee is terminated or suspended, all wages earned through the last day of work are due by the next regular payday for that pay period.8Iowa Legislature. Iowa Code 91A.4 – Employment Suspension or Termination Iowa does not have an accelerated deadline for involuntary terminations. For commission-based employees, any difference between credits already paid and actual commissions earned must be settled within 30 days of the separation date.
Accrued vacation, holiday, or sick leave pay is owed at termination only if the employer’s own policy or an agreement with the employee provides for it. Iowa law doesn’t independently require payout, but when a company handbook promises it, that promise becomes enforceable as wages.
Paycheck Deductions
Iowa limits what employers can take out of a paycheck. The only permissible deductions are those required by law (taxes, court orders) or ones the employee has authorized in writing for a purpose that benefits the employee.9Iowa Legislature. Iowa Code 91A.5 – Deductions from Wages Several specific prohibitions sit on top of that baseline:
- Shortages from a cash register, till, or cash box used by more than one person cannot be charged to any employee’s wages. A narrow exception applies to a full-time manager who has signed a written agreement accepting responsibility for shortages occurring within 45 days before the most recent payday.
- Deductions for lost or stolen property are allowed only if the item was specifically assigned to the employee and the employee signed a written acknowledgment of receipt.
- The cost of personal protective equipment required for the job cannot be deducted, except for clothing or footwear the employee can also wear off the clock.
Meal and Rest Breaks
Neither federal law nor Iowa law requires employers to give adult employees meal or rest breaks.10U.S. Department of Labor. Breaks and Meal Periods If an employer offers short breaks of roughly 5 to 20 minutes, the FLSA treats them as paid work time that counts toward the 40-hour overtime threshold. Meal periods of 30 minutes or longer are unpaid only when the employee is fully relieved of duties; eating lunch while answering phones or monitoring equipment is still work.
Minors under 16 do get a state-law break: any shift of five hours or more must include an unpaid intermission of at least 30 minutes.11Iowa Legislature. Iowa Code Chapter 92 – Child Labor
Child Labor in Iowa
Iowa substantially rewrote its child labor rules in 2023, and the state statute is now more permissive than the FLSA in several places. For any employer covered by both laws (which includes virtually all businesses with at least $500,000 in annual revenue), the stricter standard governs. In practice, that means the federal hour limits usually control for workers under 16.
14- and 15-Year-Olds
Under Iowa law, workers under 16 cannot start before 7:00 a.m. or work past 9:00 p.m. during the school year, with the evening cutoff extended to 11:00 p.m. between June 1 and Labor Day. State law allows up to six hours on a school day and 28 hours per school week, and up to eight hours daily and 40 hours weekly when school is out.11Iowa Legislature. Iowa Code Chapter 92 – Child Labor
The federal FLSA is tighter on nearly every dimension: no more than three hours on a school day, eight on a non-school day, 18 hours per school week, and permissible hours only between 7:00 a.m. and 7:00 p.m. (extended to 9:00 p.m. between June 1 and Labor Day).12U.S. Department of Labor. Fact Sheet 43 – Child Labor Provisions of the Fair Labor Standards Act For FLSA-covered employers, those federal limits are the ones to follow.
16- and 17-Year-Olds
Iowa now allows 16- and 17-year-olds to work the same hours as adults, with no state-level hour restrictions.11Iowa Legislature. Iowa Code Chapter 92 – Child Labor The 2023 law also permits workers in this age group to serve alcohol in restaurants where the kitchen is operating, provided the employer has written parental permission and at least two employees aged 18 or older are on shift. Hazardous-work prohibitions still apply to everyone under 18 under both Iowa and federal law: roofing, excavation, manufacturing, exposure to toxic chemicals, and operation of certain heavy machinery are all off-limits regardless of hours.
Work Permits
Iowa’s 2023 overhaul repealed the state’s general work permit requirements for minors. Narrower verification rules survive in specific contexts: minors under 16 working during regular school hours have to submit written proof they are legally excused from school, and 16- and 17-year-olds in work-based learning programs need written permission from both a parent and the school.11Iowa Legislature. Iowa Code Chapter 92 – Child Labor
Recordkeeping and Pay Statements
The FLSA requires employers to preserve payroll records showing hours worked, pay rates, and deductions for at least three years from the last date of entry.13eCFR. 29 CFR 516.5 – Records to Be Preserved 3 Years Supplemental records such as wage computation worksheets and collective bargaining agreements must be kept for at least two years.
Iowa layers on more. On each regular payday, employers must give every employee a statement showing hours worked, wages earned, and deductions taken.14Iowa Legislature. Iowa Code 91A.6 – Notice and Recordkeeping Requirements Employees can also request a detailed written, itemized breakdown of how wages and deductions were calculated, which the employer has to provide within 10 working days.
Iowa employees have the right to view and copy their own personnel files, including performance evaluations and disciplinary records.15Iowa Legislature. Iowa Code 91B.1 – Files – Access by Employees The employer and employee agree on timing, the employer may have a representative present during the review, and a reasonable per-page copying fee can be charged. Employees do not have a right to see employment references written about them.
When an employer can’t produce time or pay records in a wage dispute, courts tend to credit the employee’s account of hours worked and wages owed. That is a strong practical reason to keep accurate records from the start.
Filing a Wage Claim
Workers in Iowa can pursue unpaid wages through both state and federal channels. The U.S. Department of Labor’s Wage and Hour Division investigates FLSA complaints and can require employers to pay back wages, and workers can also bring private FLSA lawsuits. A successful claim recovers the unpaid amount plus an equal amount in liquidated damages, doubling the recovery.16Office of the Law Revision Counsel. 29 USC 216 – Penalties An employer can reduce or eliminate the liquidated damages only by proving the violation was made in good faith with reasonable grounds to believe the pay practices were lawful, which is a difficult bar to clear.
The FLSA statute of limitations is two years from the violation, or three years if the violation was willful.17Office of the Law Revision Counsel. 29 USC 255 – Statute of Limitations
On the state side, the Iowa Department of Inspections, Appeals, and Licensing (DIAL) handles wage complaints. If the amount owed is $6,500 or less, a worker can file a claim directly with DIAL rather than going to court.18Department of Inspections, Appeals, & Licensing. Wage Claims FAQ Larger claims typically go through a lawsuit. DIAL also oversees child labor compliance under Iowa Code Chapter 92.