Payroll and Benefits Guide United States – Iowa

Employer

Employer Payroll Contributions

Employee

Employee Payroll Contributions

Employee Income Tax

General

Iowa does have a state minimum wage law set at 7.25 USD, the same as the minimum wage federal rate.

There are other minimum requirements:

Minimum Cash wage (tipped employee) 2.90 USD

Maximum Cash wage (tipped employee) 4.35 USD

Payroll Cycle

Any payroll cycle is permitted as long as employees get paid at least monthly and no later than 12 days from the end of the period when the wages were earned.

13th Salary

There are no statutory laws on 13th salary.

General

A normal work week is 8-hour days and a 40-hour week.

Overtime

For non-exempt employees, overtime is paid at a rate of 150% of the regular pay in excess of 40 hours per week.

Working Week

Monday-Friday

Paid Time Off

Employers are not legally obliged to provide paid time off.

Public Holidays

There are 10 public holiday days.

Sick Days

Sick leave falls under the Family Medical Leave Act (FMLA).  The FMLA provides certain employees with up to 12 weeks of unpaid, job-protected leave per year or certain family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child). Employers are required to maintain the employees’ health benefits during their leave and keep their job open.

Employees are eligible for leave if they have worked for their employer at least 12 months, at least 1,250 hours over the past 12 months, and work at a location where the company employs 50 or more employees within 75 miles. Whether an employee has worked the minimum 1,250 hours of service is determined according to the Fair Labor Standards Act principles for determining compensatable hours or work.

Maternity Leave

Maternity leave falls under the FMLA.  See Sick Leave.

Paternity Leave

Paternity leave falls under the FMLA.  See Sick Leave.

Parental Leave

Parental leave falls under the FMLA.See Sick Leave.

Termination Process

Iowa is an “at-will employment” state and this means that an employer or employee can terminate an employment agreement without cause. A written termination letter or reason is not required.

Notice Period

While there is no official period required, the general practice is is 2 weeks.

Severance Pay

Iowa law does not either require or prohibit severance payments. It depends on the employer’s agreement with the employee.

VISA

Foreign nationals without permanent resident status or a work visa are not permitted to work in the United States. An employer seeking to hire a foreign national may file a petition with the United States Department of Homeland Security/United States Citizenship and Immigration Services (USCIS) for an employment visa on behalf of the prospective employee.

If the petition is approved, the prospective employee must obtain a “visa stamp” from a United States embassy or consulate (Canadian citizens are exempt from this requirement). To get a temporary U.S. work visa, an employer must file a petition with U.S. Citizenship and Immigration Services (USCIS). An approved petition must be part of the visa request. The types of visas include:

• H-1B – for applicants with a college degree hired to do specialized work. The visa is valid for three years and can be extended for an additional three years. The visa is connected to the employer that filed the petition. If there is a change of employer, the new employer must repeat the process. There are 65,000 H-1B visas available each year.
• H-1B1 – for applicants with a college degree from Chile and Singapore. The US government grants up to 1,400 visas to Chilean citizens and 5,400 from Singapore each year.
• H-2A – for temporary or seasonal agriculture work. It is limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
• H-2B – for temporary non-agricultural work. These visas are limited to citizens of qualified countries. Usually valid for up to 1 year and can be extended to a maximum of 3 years.
• L – for intercompany transfers (people transferred from a foreign company to a US branch of the company.) The applicant must have been employed at the company for a year before the transfer and work in a managerial level position or higher with specialized knowledge.
• 0 – for people with extraordinary ability in science, arts, education, business, or athletics.

The standard procedure is to obtain a short-term work visa and then apply for an immigrant visa after the employee has started working in the United States.

For those seeking employment-based immigrant visas:

• E-1 – highest priority employment for those with extraordinary ability in science, arts, education, business, and athletics.
• E-2 – for those with advanced degrees or exceptional ability.
• E-3 – for skilled workers and professionals, as well as unskilled workers.
• E-4 – members of certain immigrant groups.
• E-5 – immigrant investors in US companies (substantial investment).

Alternatively, an employer may sponsor a potential employee’s application for permanent resident status, referred to as a “green card,” if the employee can establish that the potential employee is a multinational executive/manager transferee, has unique skills, or has been offered a job in the United States. The employer must have been unable to recruit a U.S. worker who meets the position’s minimum requirements.

General

Iowa has a minimum combined sales tax rate of 6.82% (state tax is 6.00% and local tax is 0.82%).