HOURLY WAGE INDEX
Let’s talk wages in Iowa
What is the minimum wage in Iowa?
The minimum wage in Iowa is $7.25 per hour, the same as the federal minimum wage. Tipped employees must be paid at least $4.35 per hour, but employers must ensure wages and tips combined equal at least the minimum wage. Employers may pay a sub-minimum wage of $4.25 per hour to learners and employees under 18 for the first 90 consecutive calendar days of employment.
What is the average wage in Iowa?
According to the U.S. Bureau of Labor Statistics, the average hourly wage in Iowa is $26.21. Wages vary by occupation, industry, and location.
What is the living wage in Iowa?
The estimated living wage in Iowa is $21.29 per hour. A living wage represents the estimated hourly rate needed to cover basic living expenses, including housing, food, transportation, healthcare, and other essential costs.
A guide to hourly labor laws in Iowa
● Standard Minimum Wage: $7.25 (Iowa Code § 91D.1) (29 US Code § 206).
● Tipped Minimum Wage: $4.35, totaling at least minimum wage after tips (Iowa Code § 91D.1) (DoL Table).
● Overtime: Hours exceeding 40 in a fixed week are overtime and subject to 1.5 times the regular rate (29 US Code § 207) (DoL).
● Meal Breaks:
● Adults: No state or federal law requiring meal breaks. Federal law allows unpaid, non-working, bona-fide meal breaks over 30 minutes; exceptions may apply (29 C.F.R. § 785.19) (DoL).
● Children under 16: Employers must provide at least a 30-minute meal break after five consecutive hours (Iowa Code § 92.7).
● Rest Breaks: No Iowa state or federal law requiring rest breaks. However, breaks lasting 5–20 minutes must be paid (29 C.F.R. § 785.18).
● Wage Deductions: Only deductions required by law or authorized in writing by the employee. Third-party deductions benefitting the employer may not reduce the wage below the applicable minimum (Iowa Code § 91A.5) (29 C.F.R. § 4.168) (29 US Code § 203).
● Final Paychecks: Paid on the next regular payday (Iowa Code § 91A.4).
● Wage Payment Frequency: At least monthly, semimonthly, or biweekly on regular, designated paydays of consistent intervals (Iowa Code § 91A.3).
● Paid Sick Leave: No state/federal law. Policies are determined by the employer or through collective bargaining agreements (DoL).
● Paid Family and Medical Leave: No state/federal law. For eligible employees, the FMLA provides up to 12 unpaid weeks in a one-year period for a qualifying medical condition (FMLA).
● Maximum Daily and Weekly Hours for Children Under 16:
● School session: Up to 6 hours per day and 28 hours per week.
● Non-school session: Up to eight hours per day and 40 hours per week.
● Hours: No work between 9 p.m. and 7 a.m. except between June 1 and Labor Day, when hours are extended until 11 p.m. (Iowa Code § 92.7).
● Maximum Daily and Weekly Hours for Children 16 and 17: No state law. Federal law does not restrict 16- and 17-year-olds' working hours in non-hazardous occupations (DoL).
Frequently asked questions
What is the difference between gross wages and net wages?
It's important to remember that the Hourly Wage Index data above reflects gross wages, or the amount of money an employee earns before accounting for payroll deductions like taxes, benefits, or wage garnishments. Due to variability in tax rates across locations, slightly lower gross wages in a certain location might result in higher take home pay, or vice versa.
What is a good hourly wage?
This question is a difficult one to answer, as a "good hourly wage" is highly subjective according to experience, work responsibilities, cost of living, and other factors. We recommend using Hourly Wage Index data as a starting point. Once you have established a baseline for certain positions, do further research into similar businesses in your area. Lastly, consider surveying your employees. They're the best resource to help you know what is a good hourly wage, what competitive pay looks like in your location, and how competitive wages change in your industry over time.
Offering competitive pay is one of my top priorities—what other resources do you have that might help?
We know that getting applicants to pay attention to your business can be extremely challenging, and that offering competitive pay is a huge part of that. Wages aren’t everything, however! Applicant experience is another important factor that can help set you apart from your competition. A few examples include:
- Short, easy to understand job descriptions
- Mobile-friendliness
- Quick communication
- Streamlined interview stages
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