Senate File 147 - Introduced SENATE FILE 147 BY DONAHUE , STAED , TOWNSEND , CELSI , PETERSEN , WAHLS , DOTZLER , WEINER , WINCKLER , KNOX , BLAKE , BISIGNANO , QUIRMBACH , BENNETT , and TRONE GARRIOTT A BILL FOR An Act relating to wage payment collection issues arising 1 between employers and employees, providing penalties and 2 remedies, and including effective date provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1603XS (4) 91 je/js

S.F. 147 DIVISION I 1 WAGE PAYMENT COLLECTION 2 Section 1. Section 91A.5, subsection 1, unnumbered 3 paragraph 1, Code 2025, is amended to read as follows: 4 An employer shall have the burden to establish that a 5 deduction from employee wages is lawful. An employer shall not 6 withhold or divert any portion of an employee’s wages unless: 7 Sec. 2. Section 91A.5, subsection 1, paragraph b, Code 2025, 8 is amended to read as follows: 9 b. The employer has obtains advance written authorization 10 from the employee to so deduct for any lawful purpose accruing 11 to the benefit of the employee. 12 Sec. 3. Section 91A.6, subsection 1, Code 2025, is amended 13 to read as follows: 14 1. An employer shall after being notified by the director 15 pursuant to subsection 2 do the following : 16 a. Notify its employees in writing at the time of hiring 17 what wages and regular paydays are designated by the employer. 18 b. Notify its employees in writing whose wages are 19 determined based on a task, piece, mile, or load basis about 20 the method used to calculate wages and when the wages are 21 earned by the employees. 22 b. c. Notify, at least one pay period prior to the 23 initiation of any changes, its employees of any changes in 24 the arrangements specified in this subsection 1 that reduce 25 wages or alter the regular paydays. The notice shall either 26 be in writing or posted at a place where employee notices are 27 routinely posted. 28 c. d. Make available to its employees upon written request, 29 a written statement enumerating employment agreements and 30 policies with regard to vacation pay, sick leave, reimbursement 31 for expenses, retirement benefits, severance pay, or other 32 comparable matters with respect to wages. Notice of such 33 availability shall be given to each employee in writing or by a 34 notice posted at a place where employee notices are routinely 35 -1- LSB 1603XS (4) 91 je/js 1/ 9

S.F. 147 posted. 1 d. e. Establish, maintain, and preserve for three 2 calendar years the payroll records showing the hours worked, 3 wages earned, and deductions made for each employee and 4 any employment agreements entered into between an employer 5 and employee. Failure to do so shall raise a rebuttable 6 presumption that the employer did not pay the required minimum 7 wage under section 91D.1. 8 Sec. 4. Section 91A.6, subsection 2, Code 2025, is amended 9 by striking the subsection. 10 Sec. 5. Section 91A.6, subsection 4, Code 2025, is amended 11 by striking the subsection and inserting in lieu thereof the 12 following: 13 4. a. On each regular payday, the employer shall provide 14 to each employee a statement showing the wages earned by 15 the employee, the deductions made for the employee, and the 16 following information, as applicable: 17 (1) For each employee paid in whole or in part on an hourly 18 basis, the statement shall show the hours the employee worked. 19 (2) For each employee paid based on a percentage of sales or 20 based on a percentage of revenue generated for the employer, 21 the statement shall include a list of the amount of each sale 22 or the amount of revenue during the pay period. 23 (3) For each employee whose pay is based on the number 24 of miles or loads performed, the statement shall include the 25 applicable number performed during the pay period. 26 b. The employer shall provide the statement using one of the 27 following methods: 28 (1) Sending the statement to an employee by mail. 29 (2) Providing the statement to an employee by secure 30 electronic transmission or by other secure electronic means. 31 If an employee is unable to receive the statement by this 32 method, the employee shall notify the employer in writing at 33 least one pay period in advance, and the employer shall provide 34 the statement by one of the other methods listed in this 35 -2- LSB 1603XS (4) 91 je/js 2/ 9

S.F. 147 paragraph “b” . 1 (3) Providing the statement to the employee at the 2 employee’s normal place of employment during normal employment 3 hours. 4 (4) Providing each employee access to view a statement 5 of the employee’s earnings electronically and providing the 6 employee free and unrestricted access to a printer to print the 7 statement. 8 Sec. 6. Section 91A.8, Code 2025, is amended to read as 9 follows: 10 91A.8 Damages recoverable by an employee. 11 When it has been shown that an employer has intentionally 12 failed to pay an employee wages or reimburse expenses pursuant 13 to section 91A.3 , whether as the result of a wage dispute or 14 otherwise, the employer shall be liable to the employee for 15 any the unpaid wages or unreimbursed expenses that are so 16 intentionally failed to be paid or reimbursed , plus liquidated 17 damages, court costs , and any attorney’s attorney fees incurred 18 in recovering the unpaid wages or unreimbursed expenses 19 and determined to have been usual and necessary. In other 20 instances the employer shall be liable only for unpaid wages or 21 expenses, court costs and usual and necessary attorney’s fees 22 incurred in recovering the unpaid wages or expenses. 23 Sec. 7. Section 91A.9, subsection 3, Code 2025, is amended 24 to read as follows: 25 3. The director may employ such qualified personnel as are 26 necessary for the enforcement of this chapter . Such personnel 27 shall be employed pursuant to chapter 8A, subchapter IV . The 28 director shall employ wage investigators for the enforcement of 29 this chapter. 30 Sec. 8. Section 91A.10, subsections 1 and 5, Code 2025, are 31 amended to read as follows: 32 1. Upon the written complaint of the employee involved, the 33 director may shall determine whether wages have not been paid 34 and may constitute an enforceable claim. If for any reason the 35 -3- LSB 1603XS (4) 91 je/js 3/ 9

S.F. 147 director decides not to make such determination, the director 1 shall so notify the complaining employee within fourteen days 2 of receipt of the complaint. The director shall otherwise 3 notify the employee of such determination within a reasonable 4 time and if it is determined that there is an enforceable 5 claim, the director shall, with the consent of the complaining 6 employee, take an assignment in trust for the wages and for 7 any claim for liquidated damages without being bound by any of 8 the technical rules respecting the validity of the assignment. 9 However, the director shall not accept any complaint for unpaid 10 wages and liquidated damages after one year three years from 11 the date the wages became due and payable. 12 5. An employer shall not discharge or in any other manner 13 discriminate against any employee because the employee has 14 filed a complaint, assigned a claim, or brought an action under 15 this section or has cooperated in bringing any action against 16 an employer. 17 5. a. An employer or other person shall not discharge or 18 in any other manner discriminate or retaliate against any of 19 the following: 20 (1) An employee or other person for exercising any right 21 provided under this chapter or any rules adopted pursuant to 22 this chapter. 23 (2) Another employee or person for providing assistance to 24 an employee or providing information regarding the employee or 25 person. 26 (3) Another employee or person for testifying or planning 27 to testify in any investigation or proceeding regarding the 28 employee or person. 29 b. Taking adverse action against an employee or other person 30 within ninety days of an employee’s or other person’s engaging 31 in any of the activities in paragraph “a” raises a presumption 32 that such action was retaliation, which may be rebutted by 33 evidence that such action was taken for other permissible 34 reasons. 35 -4- LSB 1603XS (4) 91 je/js 4/ 9

S.F. 147 c. Any employee may file a complaint with the director 1 alleging discharge , or discrimination , or retaliation within 2 thirty days after such violation occurs. Upon receipt of the 3 complaint, the director shall cause an investigation to be made 4 to the extent deemed appropriate. If the director determines 5 from the investigation that the provisions of this subsection 6 have been violated, the director shall bring an action in the 7 appropriate district court against such person. The district 8 court shall have jurisdiction, for cause shown, to restrain 9 violations of this subsection and order all appropriate relief 10 including rehiring or reinstatement of the employee to the 11 former position with back pay. 12 Sec. 9. Section 91A.10, Code 2025, is amended by adding the 13 following new subsection: 14 NEW SUBSECTION . 6. A civil action to enforce subsection 5 15 may also be maintained in any court of competent jurisdiction 16 by the director or by any party injured by a violation of 17 subsection 5. An employer or other person who retaliates 18 against an employee or other person in violation of subsection 19 5 shall be required to pay the employee or other person an 20 amount set by the director or a court sufficient to compensate 21 the employee or other person and to deter future violations, 22 but not less than one hundred fifty dollars for each day that 23 the violation occurred. 24 Sec. 10. Section 91A.12, subsections 1 and 2, Code 2025, are 25 amended to read as follows: 26 1. Any employer who violates the provisions of this chapter 27 or the rules promulgated under it shall be subject to a civil 28 money penalty of not more than five hundred dollars per pay 29 period for each violation. The director may shall recover such 30 civil money penalty according to the provisions of subsections 31 2 through 5 . Any civil money penalty recovered shall be 32 deposited in the general fund of the state. 33 2. The director may shall propose that an employer be 34 assessed a civil money penalty by serving the employer with 35 -5- LSB 1603XS (4) 91 je/js 5/ 9

S.F. 147 notice of such proposal in the same manner as an original 1 notice is served under the rules of civil procedure. Upon 2 service of such notice, the proposed assessment shall be 3 treated as a contested case under chapter 17A . However, an 4 employer must request a hearing within thirty days of being 5 served. 6 Sec. 11. NEW SECTION . 91A.12A Inadvertent violations. 7 If an employer inadvertently violates the provisions of 8 this chapter or the rules adopted pursuant to this chapter, 9 the employer shall not be subject to liability to an employee 10 pursuant to section 91A.8, the violation shall not constitute 11 an enforceable claim as provided in section 91A.10, and the 12 employer shall not be subject to a civil money penalty pursuant 13 to section 91A.12, if all of the following conditions are met: 14 1. The director determines that the violation was 15 inadvertent and that the employer attempted in good faith 16 to comply with the provisions of this chapter and the rules 17 adopted pursuant to this chapter. 18 2. The director, after considering any history of 19 violations of this chapter or the rules adopted pursuant to 20 this chapter by the employer, determines that the violation was 21 isolated in nature. 22 3. The employer corrects the violation to the satisfaction 23 of the director within fourteen days of the occurrence of the 24 violation. 25 Sec. 12. NEW SECTION . 91A.16 Commissions earned date. 26 An employer shall not require that a person be a current 27 employee to be paid a commission that the person otherwise 28 earned. 29 Sec. 13. NEW SECTION . 91A.17 Inconsistency with federal 30 law. 31 A provision of this chapter shall not apply to any employer 32 or employee if such provision would conflict with federal law 33 or regulation. 34 Sec. 14. EFFECTIVE DATE. This division of this Act takes 35 -6- LSB 1603XS (4) 91 je/js 6/ 9

S.F. 147 effect January 1, 2026. 1 DIVISION II 2 NOTIFICATION REQUIREMENTS 3 Sec. 15. NOTIFICATION REQUIREMENTS. The director of the 4 department of inspections, appeals, and licensing shall provide 5 for the notification of each employer in this state of the 6 requirements for employers provided in this Act by September 7 1, 2025. Such notification shall include suggested forms and 8 procedures that employers may use for purposes of compliance 9 with the notice and recordkeeping requirements of section 10 91A.6, as amended by this Act. 11 EXPLANATION 12 The inclusion of this explanation does not constitute agreement with 13 the explanation’s substance by the members of the general assembly. 14 This bill relates to the collection of wages from employers 15 by employees under Code chapter 91A, the “Iowa Wage Payment 16 Collection Law”. 17 The bill provides that an employer has the burden to 18 establish that a deduction from employees’ wages is lawful and 19 that the employer must obtain written authorization for the 20 deduction from the employee in advance. 21 The bill removes the requirement that an employer be 22 notified by the director of the department of inspections, 23 appeals, and licensing before the employer is required to 24 fulfill requirements relating to employee wage and benefit 25 information. The bill requires an employer to notify employees 26 in writing whose wages are determined based on a task, piece, 27 mile, or load basis about the method used to calculate wages 28 and when wages are earned. The bill establishes a rebuttable 29 presumption that an employer did not pay the minimum wage if 30 the employer does not maintain proper payroll records. 31 The bill requires an employer to provide to each employee 32 a statement of the employee’s earnings, deductions made, and 33 as applicable the following: for an employee paid hourly, the 34 number of hours worked during the pay period; for an employee 35 -7- LSB 1603XS (4) 91 je/js 7/ 9

S.F. 147 paid on a percentage of sales or revenue generated, a list of 1 sales or amount of revenue during the pay period; and for an 2 employee paid based on the number of miles or loads performed, 3 the applicable number performed during the pay period. 4 The bill provides that when any specified violation of Code 5 chapter 91A occurs, even if unintentional, an employer shall be 6 liable for unpaid wages or expenses plus liquidated damages, 7 court costs, and attorney fees incurred in recovering wages. 8 The bill requires the director to employ wage investigators 9 for the enforcement of Code chapter 91A. 10 The bill requires the director, upon the written complaint 11 of the employee involved, to determine whether wages have not 12 been paid and may constitute an enforceable claim. Under 13 current law, making such a determination is discretionary. 14 The bill increases the period after which the director is 15 prohibited from accepting complaints for unpaid wages and 16 liquidated damages to three years from the date the wages 17 became due and payable. Under current law, the period is one 18 year from that date. 19 Prohibitions on retaliatory actions by employers or 20 others are expanded to cover persons other than employees who 21 act under Code chapter 91A with respect to an employee. A 22 90-day period is established during which any action against 23 an employee or other person is rebuttably presumed to be 24 retaliatory. The bill allows the director or any injured party 25 to maintain a civil action in any court of proper jurisdiction. 26 An employer who retaliates against an employee or other 27 person shall compensate the injured party an amount set by the 28 director or the court, but not less than $150 for each day of 29 the violation. 30 The bill modifies language relating to procedures for 31 the director to impose civil penalties on an employer for 32 violations of Code chapter 91A by making certain actions by the 33 director mandatory. 34 The bill provides that if an employer inadvertently violates 35 -8- LSB 1603XS (4) 91 je/js 8/ 9

S.F. 147 the provisions of Code chapter 91A or the rules adopted 1 pursuant to Code chapter 91A, the employer shall not be subject 2 to certain penalty provisions provided in Code chapter 91A 3 if certain conditions are met. The first condition is that 4 the director determines that the violation was inadvertent 5 and that the employer attempted in good faith to comply with 6 the provisions of Code chapter 91A and the rules adopted 7 pursuant to Code chapter 91A. The second condition is that 8 the director, after considering any history of violations by 9 the employer, determines that the violation was isolated in 10 nature. The third condition is that the employer corrects the 11 violation to the satisfaction of the director within 14 days of 12 the occurrence of the violation. 13 The bill prohibits an employer from requiring an individual 14 to be a current employee to be paid an earned commission. 15 The bill stipulates that a provision of Code chapter 91A 16 shall not apply to any employer or employee if such provision 17 would conflict with federal law or regulation. 18 The bill requires the director to provide for the 19 notification of each employer in Iowa of the requirements for 20 employers provided in the bill by September 1, 2025. Such 21 notification shall include suggested forms and procedures that 22 employers may use for purposes of compliance with the notice 23 and recordkeeping requirements of Code chapter 91A as amended 24 by the bill. 25 An employer who violates Code chapter 91A is subject to a 26 civil penalty of not more than $500 per pay period for each 27 violation. 28 The bill, except for the provision providing for 29 notification of employees in Iowa by the director, takes effect 30 January 1, 2026. 31 -9- LSB 1603XS (4) 91 je/js 9/ 9