Thursday, August 14, 2008

Changes to Iowa's Wage Payment Laws

Iowa Code Chapter 91A (i.e., the wage payment law) recently underwent changes that took effect last month.  Among other things, the law was revised such that employer are no longer allowed to mail paychecks to employees without a written authorization from each employee.  See 91A.3(3).

Specifically, the Iowa Code now states that wages "shall be paid at the employee's normal place of employment during normal employment hours" unless the employee agrees to be paid via direct deposit or "at a place and hour mutually agreed upon by the employer and employee."  Employers are no longer allowed to mail paychecks unless the employer has a "written request by the employee."  

Assuming an employee has not provided a written request, how does an employer pay an employee who is absent and/or no longer working for the employer on a payday?  Guidance is provided pursuant 91A.3(5), which states that if an employee is absent from work on a payday, the employer shall, after a demand by the employee, pay the wages either (a) within seven days following the payday (if the demand is made within those seven days); or (b) within seven days following the day on which demand is finally made (if the demand is not made within the seven-day period).  

The bottom line is that, without written authorization from the employee, an employer must hold the check at the regular place of employment for the employee to pick up.  For an employee who quits and moves away prior to the date of his/her last payday, this can cause considerable problems.

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