Stephen R. Hampton, Executive Officer of Wage Payment and Minimum Wage for the Iowa Division of Labor offered up the following to explain the changes to Iowa’s new minimum wage law in the April 2007 edition of the Iowa Lawyer. The law took effect April 1, 2007.
- It increased the minimum wage from $5.15 per hour to $6.20 per hour as of April 1, 2007. That wage rate will go up to $7.25 per hour as of January 1, 2008.
- It generally applies to all employers who gross at least $300,000 in sales or business per year. In addition, the law applies to some types of employers regardless of business volume, such as government agencies, schools, day care centers, pre-schools, hospitals, and those in construction, laundry, and dry cleaning. There are some employers who are not required to comply with the law, such as many types of agriculture-related employers, certain summer camps, and others.
- It also changes the "initial employment wage" that employers may pay a new hire the first 90 calendar days of employment. As of April 1, an Iowa employer is allowed to pay an "initial employment wage" of $5.30 per hour during this 90-calendar-day period. That "initial employment wage" will increase to $6.35 per hour as of January 1, 2008.
- Commencing April 1, tipped employees, those who "customarily and regularly", receive more than $30 per month in tips, must be paid at least $3.72 per hour. This amount will increase to $4.35 per hour on January 1, 2008. If the wage paid and tips received do not average at least minimum wage for all hours worked, the employer is required to pay the difference.
- Iowa employers will be required to put up a new poster reflecting the new minimum wage.
More information on the new Iowa minimum wage law and a free copy of the poster is currently available under the Announcements column on the Iowa Workforce Development Web site. If you have specific questions regarding the minimum wage laws please consult your employment lawyer.