labor lawAdivision of labor law center

Under a new law, Iowa employers must have an employee’s written permission before mailing a paycheck.

 

A change in Iowa’s Wage Payment Collection Law took effect recently. The change amended the existing Iowa payment law. The new law requires that employers have a written request from an employee before wages can be sent by mail. The law applies to paychecks, but not to paystub information.

 

The previous law permitted employers to mail paychecks when an employee made a verbal request, or at the employer’s discretion. While requiring written permission is a best practice in the HR field, Iowa is one of the few states to make that policy law.

 

Even employers who have routinely paid workers by mail must now have written authorization to do so.

 

The amendment to Iowa Code 91A.3 was passed by the Iowa Legislature and signed by Governor Chet Culver.

 

According to members of the Iowa Legislature who passed the law, the purpose of the law is to ensure that employees receive wages in a timely fashion. Under Iowa law, as in many other states, employers must pay a terminated employee on the next payday.

 

The new amendment to the law also makes the employer liable for any bank overdraft charges, if the employer fails to pay an employee on the regularly scheduled payday.

 

The new law does not affect state law regarding direct deposit of funds. Under that law, an Iowa employer may require that an employee hired after July 1, 2005 be paid by direct deposit. An Iowa employer who pays by direct deposit can still mail the employee’s pay stub listing wages and deductions, to the employee. Written authorization is required only to mail paychecks.

 

In the past, some employers have routinely mailed paychecks to employees who were absent on payday. Under the new law, this is not permitted unless the employee has specifically signed a form giving the employer permission to do so, in advance.

 

The Division of Labor Services offers suggested wording for such a release, however, it is not necessary for employers to use exactly this wording.

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