October 31, 2016

Polk County has become the 4th county in Iowa to pass a minimum wage ordinance.  Currently, the minimum wage rate in Iowa matches the federal minimum wage at $7.25 per hour.  The Polk County Ordinance will begin increasing the minimum wage for employees as of April 1, 2017, with the minimum wage increasing as follows:

  • $8.75 as of April 1, 2017;
  • $9.75 as of January 1, 2018;
  • $10.75 as of January 1, 2019.

Further increases will correspond to increases in the Consumer Price Index for the Midwest region.

The Polk County Ordinance applies to "each hour worked within the geographic boundaries of Polk County or one of the municipalities located therein."  However, if an employee performs only occasional work in Polk County, the Ordinance only applies "if the employee performs more than two hours of work within Polk County or an applicable municipality during [a] two-week period."

The Polk County Ordinance contains exceptions for training wages, youth employees, and tipped employees:

Training Wage.  Employers do not have to comply with the Polk County minimum wage during an employee's first ninety calendar days of employment. During that 90-day period, the effective minimum wage rate is $6.25 per hour.

Youth Employees.  The Polk County Ordinance does not affect the FLSA "youth minimum wage" which creates a minimum wage of $4.25 per hour during the first ninety days of employment for 14-20 year olds.  However, after the first 90 days of employment, the Ordinance provides that the minimum wage for 14-17 year-olds is 85% of the Polk County minimum wage for adults, making the youth minimum wage rate as follows:

  • $7.44 as of April 1, 2017;
  • $8.29 as of January 1, 2018;
  • $9.14 as of January 1, 2019.

The Polk County minimum wage for adults will apply to individuals 18-20 years old following the first ninety days of employment.

Tipped Employees.  The Polk County Ordinance provides for a "tip credit" not to exceed $5.00 per hour for employees who regularly receive more than thirty dollars a month in tips.  Current Iowa law creates an effective employer-paid minimum wage of $4.35 for tipped employees.  The Polk County Ordinance freezes the "tip credit" at $5.00 per hour, making the employer-paid minimum wage for tipped employees in Polk County as follows:

  • $4.35 (the tip credit minimum under Iowa law) through December 31, 2017;
  • $4.75 as of January 1, 2018;
  • $5.75 as of January 1, 2019.

Finally, the Polk County Ordinance provides an opt-out provision for municipalities within the County, stating the "ordinance shall not be applicable within the geographic boundaries of any Polk County municipality that has adopted a conflicting ordinance, or to work performed by covered employees within said Polk County municipality."  Thus, cities may choose not to follow the new ordinance, and create a patchwork of minimum wage rates within Polk County.  

Enforcement. The Polk County Ordinance states the County minimum wage can be enforced pursuant to the Iowa minimum wage law, Iowa Code Chapter 91A.  Additionally, violation of the Polk County minimum wage is a "County infraction," punishable by a civil penalty of up to $750 for each violation or up to $1,000 for repeat offenses.

Three other Iowa counties have passed local minimum wage laws:  Johnson County, Linn County, and Wapello County.  The minimum wage rate in Johnson County is currently $9.15 and will increase to $10.10 on January 1, 2017.  The Linn County minimum wage will increase to $10.25 by 2019 with three $1.00 step increases on January 1, 2017-2019.  Similarly, the Wapello County minimum wage will increase to $10.10 by 2019 with three $0.95 step increases on January 1, 2017-2019.  Like the Polk County Ordinance, the minimum wage laws of these other Iowa counties contain some exceptions.  Please see the specific ordinance for details.    

This growing pressure at the local level may force a debate about minimum wage at the state level.

If you have any questions regarding the minimum wage or employee pay, please contact us.

Regards,

Ahlers & Cooney Labor & Employment Practice Group

 

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