['Compensation']

['Compensation', 'Payroll']

03/27/2026

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REGSENSE
Topic Search
Compensation - Compensation
State Info

State Info

Direct deposit provisions - Iowa

RegSense State Info Compensation Iowa Payroll Compensation Best Results HR Management English Focus Area Human Resources

Iowa law allows employers (public and private) to require direct deposit, but with specific conditions:

Direct deposit is mandatory only for employees hired on or after July 1, 2005.
Employers cannot require direct deposit if:
- The cost of opening or maintaining a bank account would reduce the employee’s wages below minimum wage.
- The employee is covered by a union contract that prohibits mandatory direct deposit.
Employees must be allowed to choose their own financial institutions for payroll deposits.

Related information

Compensation ezExplanation
Payroll ezExplanation
Fair Labor Standards Act (FLSA) ezExplanation

Citations

Iowa Code 91A.3(3)(a)
15 USC 1693 et seq. — Electronic Funds Transfer Act (EFTA)
12 CFR Part 1005 — Electronic Fund Transfers (Regulation E)
FOH Chapter 30 RECORDS, MINIMUM WAGE, AND PAYMENT OF WAGES (U.S. DOL – page 11, Sec. 30c)
29 CFR 531.35 — “Free and clear” payment; “kickbacks”

['Compensation']

['Compensation', 'Payroll']

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