|
An amendment to the Iowa Wage Payment Collection Law, effective July 1, 2005, requires Iowa employers to provide employees with wage and deduction information every pay period. The law also allows Iowa employers to require that new employees sign up for mandatory direct deposit of their wages when certain conditions exist.
New pay stub requirement: Every regular payday, employers must provide to each employee (by mail, or at the employee's normal place of work, or at a mutually agreed upon place and hour) during normal working hours, a statement showing:
- the hours the employee worked
- the wages earned by the employee, and
- the deductions made from that paycheck.
It is acceptable for an employer to provide each employee access to view an electronic statement of the employee's earnings, so long as the employee has free and unrestricted access to a printer to print the statement, if the employee chooses.
Direct deposit for new hires: Iowa employers may, from July 1, 2005, require new employees to sign up for direct deposit of their wages as a condition of hire. The direct deposit must be made to a financial institution selected by the new hire.
However, the employer may not require direct deposit for new hires if any of these conditions exists:
- the costs to the new employee of setting up and maintaining an account would reduce the employee's wages below minimum wage
- the employee would incur a fee charged to the employee's account as a result of the direct deposit, and/or
- a labor union contract between the employer and a labor union representing the employees prohibits the employer from requiring employees to sign up for direct deposit of wages.
It is important to note that current employees may still choose whether or not to be paid by direct deposit. The new law only allows employers to require direct deposit of new hires. This means that, if new employees who have been required to sign up to direct deposit or current employees who have voluntarily signed up for direct deposit change their minds, they can stop direct deposit and ask for a regular paper paycheck.
...back to 30 June 2005
Further information:
Iowa Workforce Development News Releases
New Direct Deposit, Pay Stub Information Law
|
For Payroll and Human Resource Professionals
