Human Resource Blog

Iowa Minimum Wage

The minimum wage is scheduled to increase on January 1, 2008 in Iowa. How much will it increase and how will it affect employers?

The Iowa minimum wage will increase on January 1, 2008. The current minimum wage is $6.20 per hour and will increase to $7.25 per hour. This reflects a $1.05 change per hour.

The Governor of Iowa approved legislation on January 25, 2007 that authorized two increases of the minimum wage in Iowa. The first increase was enacted on April 1, 2007. The minimum wage at this time was $5.15 per hour and it was increased to $6.20 per hour. The next increase on January 1, 2008 completes the two step increase enacted by the Governor.

What about employees that are considered “tipped” workers? The new law states tipped employees are entitled to $4.35 per hour.

Businesses that gross less than $300,000 per year do not have to pay the minimum wage rate. However, if the business is involved in interstate commerce, then the federal minimum wage of $5.85 must be paid to workers.

The state of Iowa created a statute that outlines who must pay the minimum wage. In these guidelines there are businesses that are called “named enterprises” that must pay minimum wage rates regardless of the volume of business. Those businesses that must pay minimum wage include public agencies, hospitals and residential care facilities, preschools and schools for gifted children. There were other industries that were included too like construction, laundry and dry cleaning.

There are a few other states that are changing their minimum wage rates on January 1, 2008. Listed below are the states and their new minimum wage rates:

Arizona    $6.90
California $8.00
Florida     $6.79
New Mexico $6.50
Delaware $7.15

The federal minimum wage will increase on July 24, 2008 to $6.55 per hour. It is currently $5.85 per hour. Other states like Texas, Nebraska, South Dakota and Oklahoma will increase their minimum wage rates on the same day because their rates are connected to the federal law.

Employers will need to update their labor law posters to reflect the upcoming changes. Current information on all states is available on www.laborlawcenter.com. The latest posters must be conspicuously displayed where all employees can view them. Employers that do not display these posters can be subject to fines. GW