House File 196 - Introduced HOUSE FILE 196 BY WILLEMS , ISENHART , GASKILL , HUNTER , T. TAYLOR , MURPHY , KEARNS , and KAJTAZOVIC A BILL FOR An Act relating to employee leave by providing for time 1 off and vacation leave, and including effective date and 2 applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1914YH (4) 84 je/rj

H.F. 196 Section 1. Section 91A.2, Code 2011, is amended by adding 1 the following new subsection: 2 NEW SUBSECTION . 6A. “Paid time off” means a benefit 3 provided by an employer that allows an employee to take time 4 off from work with pay without regard to the reason the 5 employee chooses to take the time off. 6 Sec. 2. Section 91A.2, subsection 7, paragraph b, Code 2011, 7 is amended to read as follows: 8 b. Vacation, holiday, paid time off, sick leave, and 9 severance payments which are due an employee under an agreement 10 with the employer or under a policy or practice of the 11 employer. 12 Sec. 3. Section 91A.4, Code 2011, is amended by striking the 13 section and inserting in lieu thereof the following: 14 91A.4 Employment suspension or termination —— how wages are 15 paid. 16 1. An employee’s employer shall pay all wages earned by the 17 employee up to the time of the suspension or termination, less 18 any lawful deductions specified in section 91A.5, no later than 19 the next regular payday after suspension or termination, except 20 as follows: 21 a. Earned wages that are the difference between a credit 22 paid against wages determined on a commission basis and the 23 wages actually earned on a commission basis shall be paid 24 by the employer not more than thirty days after the date of 25 suspension or termination. 26 b. If while employed, an employee earned paid time off 27 but did not earn vacation, an employer may reduce pay for 28 accumulated paid time off by up to one-third. 29 c. If while employed, an employee earned both vacation pay 30 and paid time off, no payment for accrued paid time off is 31 required. 32 2. An employer shall not adopt a policy or practice of 33 denying payment for vacation or for paid time off upon the 34 suspension or termination of an employee’s employment unless 35 -1- LSB 1914YH (4) 84 je/rj 1/ 3

H.F. 196 the employee’s employment was terminated by the employer for 1 misconduct as defined in 871 IAC 24.32(1)“a”, as set forth in 2 section 96.5, subsection 2. 3 3. Except as provided in subsection 1, upon suspension or 4 termination of an employee’s employment, the amount of pay owed 5 for accrued paid time off or accrued vacation shall be the 6 amount of pay the employee would have received if the employee 7 had not been suspended or terminated and had begun taking the 8 total amount of accrued paid time off or accrued vacation on 9 the date the suspension or termination occurred. 10 Sec. 4. EFFECTIVE UPON ENACTMENT. This Act, being deemed of 11 immediate importance, takes effect upon enactment. 12 Sec. 5. APPLICABILITY. This Act applies only to the 13 suspension or termination of an employee’s employment that 14 takes place on or after the effective date of this Act. 15 EXPLANATION 16 This bill provides employee leave by providing for time off 17 and vacation leave. 18 The bill relates to payments for accrued vacation time and 19 for accrued paid time off for all employees who are terminated 20 or suspended. 21 Current law requires an employer to pay accrued vacation pay 22 to a terminated or suspended employee only if the employer has 23 a policy, procedure, or contract that requires the employer to 24 do so. 25 The bill defines “paid time off” as a benefit allowing an 26 employee to take time off from work with pay without regard to 27 the reason the employee chooses to take the time off. “Paid 28 time off” is also added to the definition of “wages”. 29 The bill provides that if an employee is suspended or 30 terminated upon request the employer must pay all wages, now 31 including paid time off, earned by the next regular payday. 32 The bill provides an exception for when an employee who earned 33 paid time off while employed but not vacation, the employer 34 may reduce the pay for the accrued paid time off by one-third. 35 -2- LSB 1914YH (4) 84 je/rj 2/ 3

H.F. 196 Finally, there is an exception for when an employee earned both 1 vacation and paid time off while employed, the employer is not 2 required to make payment for the paid time off. 3 An employer shall not adopt a policy or practice to deny 4 payment for accrued vacation or accrued paid time off upon the 5 suspension or termination of an employee unless the employee’s 6 employment ended due to misconduct. Misconduct is not defined 7 in statute but is defined in the department of workforce 8 development’s administrative rules. 9 The bill provides a formula to calculate the payment for an 10 employee’s accrued paid time off or vacation if the employee is 11 suspended or terminated. Except as otherwise provided by the 12 formula, the amount of pay owed to an employee is the amount of 13 pay equal to the accrued vacation or paid time off as if the 14 employee began taking the vacation or paid time off the day the 15 suspension or termination took place. This formula substitutes 16 the pro rata policy for how accrued vacation is currently paid 17 out if an employee’s policy or practice required it. 18 The bill takes effect upon enactment. The bill is made 19 applicable only to the suspension or termination of an 20 employee’s employment that occurs on or after that date. 21 -3- LSB 1914YH (4) 84 je/rj 3/ 3