Deductions from wages - Iowa

Summary of differences between federal and state regulations

Federal regulations restrict the types of deductions that can be made from an employee’s wages or salary. Deductions can be made in certain cases, but the legality often depends on the nature and purpose of the deductions, as well as the status of the employee as exempt or non-exempt.

Iowa law addresses wage deductions as follows:

Iowa Code Chapter 91A.5 Deductions from wages.

1. An employer shall not withhold or divert any portion of an employee’s wages unless:
   a) The employer is required or permitted to do so by state or federal law or by order of a court of competent jurisdiction; or
   b) The employer has written authorization from the employee to so deduct for any lawful purpose accruing to the benefit of the employee.

1. The following shall not be deducted from an employee’s wages:
   a) Cash shortage in a common money till, cash box, or register operated by two or more employees or by an employee and an employer. However, the employer and a full-time employee who is the manager of an establishment may agree in writing signed by both parties that the employee will be responsible for a cash shortage that occurs within forty-five days prior to the most recent regular payday. Not more than one such agreement shall be in effect per establishment.
   b) Losses due to acceptance by an employee on behalf of the employer of checks which are subsequently dishonored if the employee has been given the discretion to accept or reject such checks and the employee does not abuse the discretion given.
   c) Losses due to breakage, damage to property, default of customer credit, or nonpayment for goods or services rendered so long as such losses are not attributable to the employee’s willful or intentional disregard of the employer’s interests.
   d) Lost or stolen property, unless the property is equipment specifically assigned to, and receipt acknowledged in writing by, the employee from whom the deduction is made.
   e) Gratuities received by an employee from customers of the employer.
   f) Costs of personal protective equipment, other than items of clothing or footwear which may be used by an employee during nonworking hours, needed to protect an employee from employment-related hazards, unless provided otherwise in a collective bargaining agreement.
   g) Costs of more than twenty dollars for an employee’s relocation to the place of employment. This paragraph shall apply only to an employer as defined in section 91E.1.

State

Contact

Iowa Workforce Development

Regulations

Iowa Code Chapter 91A.5

www.iowadivisionoflabor.gov/wage-payment-collection-and-minimum-wage

Iowa Administrative Code, Labor Services 875, Chapter 217, Wage Payments

www.legis.iowa.gov/docs/ACO/agency/02-04-2015.875.pdf

Federal

Contact

Wage and Hour Division

Regulations

For non-exempt employees:

29 CFR Part 531, Wage Payments under The Fair Labor Standards Act of 1938

For exempt employees:

29 CFR Part 541, Subpart G, Salary Requirements