HF 121 (LSB 1950YH (2) 87)

HOUSE FILE 121

BY  HUNTER

A BILL FOR

An Act relating to employee leave by providing for time off and vacation leave, making penalties applicable, and including effective date and applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 91A.2, Code 2017, is amended by adding the following new subsection:
   NEW SUBSECTION.  6A.  “Paid time off” means a benefit provided by an employer that allows an employee to take time off from work with pay without regard to the reason the employee chooses to take the time off.
    Sec. 2.  Section 91A.2, subsection 7, paragraph b, Code 2017, is amended to read as follows:
   b.  Vacation, holiday, paid time off, sick leave, and severance payments which are due an employee under an agreement with the employer or under a policy or practice of the employer.
    Sec. 3.  Section 91A.4, Code 2017, is amended by striking the section and inserting in lieu thereof the following:
   91A.4  Employment suspension or termination —— calculation and payment of wages.
   1.  If the employment of an employee is suspended or terminated, an employee’s employer shall pay all wages earned by the employee up to the time of the suspension or termination, less any lawful deductions specified in section 91A.5, no later than the next regular payday after suspension or termination, except as follows:
   a.  Earned wages that are the difference between a credit paid against wages determined on a commission basis and the wages actually earned on a commission basis shall be paid by the employer not more than thirty days after the date of suspension or termination.
   b.  If while employed, an employee earned paid time off but did not earn vacation, an employer may reduce pay for accumulated paid time off by up to one-third.
   c.  If while employed, an employee earned both vacation pay and paid time off, payment for accrued paid time off is not required.
   2.  An employer shall not adopt a policy or practice of denying payment for vacation or for paid time off upon the suspension or termination of an employee’s employment unless the employee’s employment was terminated by the employer for misconduct as defined in the rules of the department of workforce development pursuant to section 96.5, subsection 2.
   3.  Except as provided in subsection 1, upon suspension or termination of an employee’s employment, the amount of pay owed for accrued paid time off or accrued vacation shall be the amount of pay the employee would have received if the employee had not been suspended or terminated and had begun taking the total amount of accrued paid time off or accrued vacation on the date the suspension or termination occurred.
    Sec. 4.  EFFECTIVE UPON ENACTMENT.  This Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 5.  APPLICABILITY.  This Act applies only to the suspension or termination of an employee’s employment that takes place on or after the effective date of this Act.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill provides employee leave by providing for time off and vacation leave. The bill relates to payments for accrued vacation time and for accrued paid time off for all employees who are terminated or suspended.
   Current law requires an employer to pay accrued vacation pay to a terminated or suspended employee only if the employer has a policy, procedure, or contract that requires the employer to do so.
   The bill defines “paid time off” as a benefit allowing an employee to take time off from work with pay without regard to the reason the employee chooses to take the time off. “Paid time off” is also added to the definition of “wages”.
   The bill provides that if an employee is suspended or terminated, upon request the employer must pay all earned wages, now including paid time off, by the next regular payday. The bill provides for an employee who earned paid time off while employed but did not earn vacation, that the employer may reduce the pay for the accrued paid time off by one-third. For an employee who earned both vacation and paid time off while employed, the employer is not required to make payment for the paid time off.
   An employer shall not adopt a policy or practice to deny payment for accrued vacation or accrued paid time off upon the suspension or termination of an employee unless the employee’s employment ended due to misconduct. Misconduct is defined in the department of workforce development’s administrative rules.
   The bill provides for the calculation and payment of an employee’s accrued paid time off or vacation if the employee is suspended or terminated. The amount of such pay owed to an employee is the amount of pay equal to the accrued vacation or paid time off as if the employee began taking the vacation or paid time off the day the suspension or termination took place, unless otherwise provided in the bill.
   Unpaid wages or expenses, along with liquidated damages, court costs, and attorney’s fees, may be recovered by the employee or the commissioner by civil action under Code chapter 91A. An employer who violates Code chapter 91A is also subject to a civil penalty of not more than $500 per pay period for each violation.
   The bill takes effect upon enactment. The bill is made applicable only to the suspension or termination of an employee’s employment that occurs on or after that date.