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House File 40 - IntroducedA Bill ForAn Act 1relating to payment of employees for time off and
2vacation leave, making penalties applicable, and including
3effective date and applicability provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 91A.2, Code 2021, is amended by adding
2the following new subsection:
3 NEW SUBSECTION. 6A. “Paid time off” means a benefit
4provided by an employer that allows an employee to take time
5off from work with pay without regard to the reason the
6employee chooses to take the time off.
7 Sec. 2. Section 91A.2, subsection 7, paragraph b, Code 2021,
8is amended to read as follows:
9b. Vacation, holiday, paid time off, sick leave, and
10severance payments which are due an employee under an agreement
11with the employer or under a policy or practice of the
12employer.
13 Sec. 3. Section 91A.4, Code 2021, is amended by striking the
14section and inserting in lieu thereof the following:
1591A.4 Employment suspension or termination — calculation and
16payment of wages.
171. If the employment of an employee is suspended or
18terminated, an employee’s employer shall pay all wages
19earned by the employee up to the time of the suspension or
20termination, less any lawful deductions specified in section
2191A.5, no later than the next regular payday after suspension
22or termination, except as follows:
23a. Earned wages that are the difference between a credit
24paid against wages determined on a commission basis and the
25wages actually earned on a commission basis shall be paid
26by the employer not more than thirty days after the date of
27suspension or termination.
28b. If while employed, an employee earned paid time off
29but did not earn vacation, an employer may reduce pay for
30accumulated paid time off by up to one-third.
31c. If while employed, an employee earned both vacation pay
32and paid time off, payment for accrued paid time off is not
33required.
342. An employer shall not adopt a policy or practice of
35denying payment for vacation or for paid time off upon the
-1-1suspension or termination of an employee’s employment unless
2the employee’s employment was terminated by the employer
3for misconduct as defined in the rules of the department of
4workforce development pursuant to section 96.5, subsection 2.
53. Except as provided in subsection 1, upon suspension or
6termination of an employee’s employment, the amount of pay owed
7for accrued paid time off or accrued vacation shall be the
8amount of pay the employee would have received if the employee
9had not been suspended or terminated and had begun taking the
10total amount of accrued paid time off or accrued vacation on
11the date the suspension or termination occurred.
12 Sec. 4. EFFECTIVE UPON ENACTMENT. This Act, being deemed of
13immediate importance, takes effect upon enactment.
14 Sec. 5. APPLICABILITY. This Act applies only to the
15suspension or termination of an employee’s employment that
16takes place on or after the effective date of this Act.
17EXPLANATION
18The inclusion of this explanation does not constitute agreement with
19the explanation’s substance by the members of the general assembly.
20This bill relates to payments for accrued vacation time and
21for accrued paid time off for all employees who are terminated
22or suspended.
23Current law requires an employer to pay accrued vacation pay
24to a terminated or suspended employee only if the employer has
25a policy, procedure, or contract that requires the employer to
26do so.
27The bill provides that if an employee is suspended or
28terminated, upon request the employer must pay all earned
29wages, now including paid time off, by the next regular payday.
30The bill provides for an employee who earned paid time off
31while employed but did not earn vacation, that the employer may
32reduce the pay for the accrued paid time off by one-third. For
33an employee who earned both vacation and paid time off while
34employed, the employer is not required to make payment for the
35paid time off.
-2- 1The bill prohibits an employer from adopting a policy or
2practice to deny payment for accrued vacation or accrued paid
3time off upon the suspension or termination of an employee
4unless the employee’s employment ended due to misconduct.
5Misconduct is defined in the department of workforce
6development’s administrative rules.
7The bill provides for the calculation and payment of an
8employee’s accrued paid time off or vacation if the employee
9is suspended or terminated. The amount of such pay owed to an
10employee is the amount of pay equal to the accrued vacation or
11paid time off as if the employee began taking the vacation or
12paid time off the day the suspension or termination took place,
13unless otherwise provided in the bill.
14The bill defines “paid time off” as a benefit allowing an
15employee to take time off from work with pay without regard to
16the reason the employee chooses to take the time off. “Paid
17time off” is also added to the definition of “wages”.
18Unpaid wages or expenses, along with liquidated damages,
19court costs, and attorney’s fees, may be recovered by the
20employee or the commissioner by civil action under Code chapter
2191A. An employer who violates Code chapter 91A is also subject
22to a civil penalty of not more than $500 per pay period for each
23violation.
24The bill takes effect upon enactment. The bill applies only
25to the suspension or termination of an employee’s employment
26that occurs on or after that date.
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2vacation leave, making penalties applicable, and including
3effective date and applicability provisions.
4BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1 Section 1. Section 91A.2, Code 2021, is amended by adding
2the following new subsection:
3 NEW SUBSECTION. 6A. “Paid time off” means a benefit
4provided by an employer that allows an employee to take time
5off from work with pay without regard to the reason the
6employee chooses to take the time off.
7 Sec. 2. Section 91A.2, subsection 7, paragraph b, Code 2021,
8is amended to read as follows:
9b. Vacation, holiday, paid time off, sick leave, and
10severance payments which are due an employee under an agreement
11with the employer or under a policy or practice of the
12employer.
13 Sec. 3. Section 91A.4, Code 2021, is amended by striking the
14section and inserting in lieu thereof the following:
1591A.4 Employment suspension or termination — calculation and
16payment of wages.
171. If the employment of an employee is suspended or
18terminated, an employee’s employer shall pay all wages
19earned by the employee up to the time of the suspension or
20termination, less any lawful deductions specified in section
2191A.5, no later than the next regular payday after suspension
22or termination, except as follows:
23a. Earned wages that are the difference between a credit
24paid against wages determined on a commission basis and the
25wages actually earned on a commission basis shall be paid
26by the employer not more than thirty days after the date of
27suspension or termination.
28b. If while employed, an employee earned paid time off
29but did not earn vacation, an employer may reduce pay for
30accumulated paid time off by up to one-third.
31c. If while employed, an employee earned both vacation pay
32and paid time off, payment for accrued paid time off is not
33required.
342. An employer shall not adopt a policy or practice of
35denying payment for vacation or for paid time off upon the
-1-1suspension or termination of an employee’s employment unless
2the employee’s employment was terminated by the employer
3for misconduct as defined in the rules of the department of
4workforce development pursuant to section 96.5, subsection 2.
53. Except as provided in subsection 1, upon suspension or
6termination of an employee’s employment, the amount of pay owed
7for accrued paid time off or accrued vacation shall be the
8amount of pay the employee would have received if the employee
9had not been suspended or terminated and had begun taking the
10total amount of accrued paid time off or accrued vacation on
11the date the suspension or termination occurred.
12 Sec. 4. EFFECTIVE UPON ENACTMENT. This Act, being deemed of
13immediate importance, takes effect upon enactment.
14 Sec. 5. APPLICABILITY. This Act applies only to the
15suspension or termination of an employee’s employment that
16takes place on or after the effective date of this Act.
17EXPLANATION
18The inclusion of this explanation does not constitute agreement with
19the explanation’s substance by the members of the general assembly.
20This bill relates to payments for accrued vacation time and
21for accrued paid time off for all employees who are terminated
22or suspended.
23Current law requires an employer to pay accrued vacation pay
24to a terminated or suspended employee only if the employer has
25a policy, procedure, or contract that requires the employer to
26do so.
27The bill provides that if an employee is suspended or
28terminated, upon request the employer must pay all earned
29wages, now including paid time off, by the next regular payday.
30The bill provides for an employee who earned paid time off
31while employed but did not earn vacation, that the employer may
32reduce the pay for the accrued paid time off by one-third. For
33an employee who earned both vacation and paid time off while
34employed, the employer is not required to make payment for the
35paid time off.
-2- 1The bill prohibits an employer from adopting a policy or
2practice to deny payment for accrued vacation or accrued paid
3time off upon the suspension or termination of an employee
4unless the employee’s employment ended due to misconduct.
5Misconduct is defined in the department of workforce
6development’s administrative rules.
7The bill provides for the calculation and payment of an
8employee’s accrued paid time off or vacation if the employee
9is suspended or terminated. The amount of such pay owed to an
10employee is the amount of pay equal to the accrued vacation or
11paid time off as if the employee began taking the vacation or
12paid time off the day the suspension or termination took place,
13unless otherwise provided in the bill.
14The bill defines “paid time off” as a benefit allowing an
15employee to take time off from work with pay without regard to
16the reason the employee chooses to take the time off. “Paid
17time off” is also added to the definition of “wages”.
18Unpaid wages or expenses, along with liquidated damages,
19court costs, and attorney’s fees, may be recovered by the
20employee or the commissioner by civil action under Code chapter
2191A. An employer who violates Code chapter 91A is also subject
22to a civil penalty of not more than $500 per pay period for each
23violation.
24The bill takes effect upon enactment. The bill applies only
25to the suspension or termination of an employee’s employment
26that occurs on or after that date.
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