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Iowa Rolls Back Minimum Wage Hikes


Let us call this a rather intriguing, if not potentially litigation likely, development out of Iowa.  Recently, the Iowa Senate gave final approval to House File 295 which would roll back minimum wage increases for many in the state.  Yes, roll back wages that have already gone into place.

Under the bill, which was approved by a 29 - 21 vote in the Senate, local governments would be prohibited from raising hourly minimum wage rates above the state level.    Currently, the minimum wage rate in the state is set at $7.25/hour (which has not gone up in nearly a decade).  However, several counties in the state have approved higher minimum wage rates ranging from $10.10/hour to $10.75/hour.  In fact, one county approved a minimum wage hike to $8.20/hour the day after the Iowa Senate approved this measure.

For those wondering, the bill had already passed the Iowa House.  With the Iowa Senate voting along party lines (with Republicans supporting the bill and all Democrats and one Independent opposing it), the bill was subsequently sent to the Governor's desk for signature.  Last Thursday, Republican Governor Terry Branstad signed the bill into law, over the objection of Democrats and hourly workers.

The question then becomes, what happens to the counties that already raised their minimum wage rates?  In short, hourly workers in these counties would see their wages rolled back to the statewide rate of $7.25/hour, although some groups are petitioning employers to keep the wage rates where they are currently set.

In fact, this past weekend I was talking about this development with a regular reader of the blog.  She brought up a good point about now that the bill has become law, employers and HR professionals in the state will likely have quite a headache having to reconcile employee pay, handbooks, IRS filings, etc. to conform with the new statewide hourly wage rate.  Republicans in Iowa had argued, prior to the bill's passage, that the bill was necessary to keep wage rates uniform in the state and avoid a patchwork of rules (with different counties having higher hourly wage rates) that could hinder business.  While having to navigate this patchwork of rules likely will not be an issue in the longterm, it seems likely that there will be a bit of a learning curve for employers to roll back wages and comply with the bill.  With that being said, I do not think Democrats or hourly workers impacted by this bill will go quietly.  It certainly would not surprise me to see a lawsuit filed over the implementation of this law.  Stay tuned.



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