Employer Awareness Guide
This guide is intended to briefly cover various compliance areas a business employing a workforce in Iowa should know. These areas are complex in nature and require more explanation than is practical to cover here. Compliance areas covered include:
- Required Work Place Postings
- Workers Compensation Insurance
- Unemployment Insurance
- Misclassification
- Contractor Registration
- Minimum Wage
- Youth Employment
- Occupational Health and Safety Administration (OSHA)
- Tax Registration
- I-9 Form
- New Hire – Child Support
- Equal Employment Opportunity (EEO) / Affirmative Action (AA)
Please note: Consulting a qualified professional may also be necessary to determine if people working for you are employees or independent contractors. Employers sometimes treat employees as independent contractors which may result in non-compliance with the provisions discussed below. Simply labeling a worker as an independent contractor or a subcontractor, even on a document signed by the workers does not make the worker an independent contractor or subcontractor. Reporting payments on a 1099 instead of doing withholdings also does not necessarily mean the worker is an independent contractor or subcontractor.
When noncompliance occurs, the agencies listed below evaluate details of the relationship between you and the worker to determine which of you has control of the work environment. If it is determined that you control the work environment, you will be considered the employer and therefore responsible for compliance.
1. Required Postings in the Workplace
Employers are required by both federal and state law to prominently display certain posters in the workplace. These postings cover various areas of employee rights and employer responsibilities. Required and recommended postings can be found at: http://www.iowaworks.org/reqposters.htm
2. Workers’ Compensation Insurance
Most employers are required to purchase workers’ compensation liability insurance. Insurance is mandatory if you have eligible employees, unless you apply to the Iowa Insurance Commissioner to become self-insured.
Workers’ compensation liability insurance can be purchased through most insurance agents who write property and casualty insurance. Premium rates are regulated but vary among different insurance companies. Shopping for the best rate and service is often beneficial.
Most employees who are injured in Iowa, working under contract of hire made in Iowa, or whose employment is principally localized in Iowa, are eligible for benefits if they have a job-related injury. A few groups of employees are exempt from the law and not eligible for benefits. The criteria for exemption are far too detailed to describe in this reference.
For information on workers’ compensation visit the Division of Workers’ Compensation at Iowa Workforce Development (IWD) website http://www.iowaworkforce.org/wc/faq.htm#What. Questions can be directed to a Compliance Administrator by phoning 515-281-5387 or 1-800-562-4692 toll-free.
3. Unemployment Insurance
Unemployment insurance replaces part of the income workers lose when they become unemployed through no fault of their own. Employers pay the money for unemployment benefits. The Unemployment Insurance Services Division at IWD maintains the Iowa Unemployment Compensation Trust Fund, and makes payments to eligible persons. For information, visit http://www.iowaworkforce.org/ui/ or call 515-281-5387 or 1-800-562-4692 toll-free.
Anyone who is no longer working, or is working substantially fewer hours, and has worked and earned wages in work covered by unemployment insurance as determined by IWD in the last 15 to 18 months may file an application for unemployment insurance benefits.
A liable employer is an employing unit that is required to report wages and pay unemployment insurance taxes to the Unemployment Insurance Division. Employers fall into at least one of the following classifications and become a liable employer if one of the following conditions is met, retroactive to January 1 (of any year in which the conditions occur):
1. One or More Employees
One or more employees performing covered services for any portion of a day in at least twenty different calendar weeks.
2. Payroll of $1,500
Having a total payroll of $1,500 or more in any calendar quarter for covered services.
3. Agricultural Laborers
Paying cash wages of $20,000 or more to agricultural laborers in any quarter of the current or previous calendar year, or employing 10 or more workers in some portion of a day in 20 separate weeks in the current calendar year or the preceding calendar year.
4. Domestic Workers
Paying cash wages of $1,000 or more to domestic workers during any calendar quarter in the current calendar year or the preceding calendar year.
5. Nonprofit Organizations
Having one or more employees performing covered services in some portion of a day in at least 20 different calendar weeks or having a total payroll of $1,500 or more in any calendar quarter for covered services.
Successorship
Be aware that acquiring a trade or business, part of an organization, or substantially all the assets of another business makes the new owner liable for unemployment insurance responsibilities. This acquisition can occur through purchase, rental, lease, inheritance, merger or mortgage foreclosure. Details on successorship responsibilities are too detailed for this reference. Contact the Unemployment Insurance Division at IWD.
Additionally, any employer liable for taxes under the Federal Unemployment Tax Act is also a liable employer under Iowa law if the business has 1) one or more workers performing services in Iowa; and 2) its services are subject to federal tax.
An employer that is not liable may elect to become liable to cover its workers under Iowa Employment Security Law, so that they may receive unemployment insurance benefits. Choosing to provide elective coverage carries responsibility for taxes. Necessary forms can be obtained from IWD's Tax Bureau at (515) 281-5339 and coverage is subject to approval by IWD.
For more information on unemployment insurance please visit http://www.iowaworkforce.org/ui/uiemployers.htm or call (515) 281-5387.
4. Misclassification
Be sure to properly classify your workers as employees or independent contractors and provide unemployment insurance and workers compensation coverage for employees as required. Misclassifying workers can lead to significant penalties and interest. In general, a worker is an employee if the business/employer has the right to direct and control the work performed. For more information on properly classifying workers as employees rather than independent contractors, visit: http://www.iowaworkforce.org/misclassification/
5. Contractor Registration
The law requires that all individual contractors and businesses performing “construction” work within Iowa be registered with the Division of Labor if they earn at least $2,000 a year from that work. Individuals or businesses making less than $2,000 a year on “construction” work, or who work only on their own real estate or property, are not required to register Even if construction work is only incidental to your business, you still must be registered so long as you make at least $2,000 a year from the “construction” activities. For more information on who is required to register contact IowaWorkforce Development, Division of Labor at 1.800.562.4692 or visit http://www.iowaworkforce.org/labor/contractor.htm.
6. Minimum Wage Laws
Employees in Iowa who are covered by the federal and state minimum wage law must be paid at least $7.25 per hour. Allowable deductions from wages include taxes, garnishments, and benefits accruing to the employee such as insurance, 401k, pensions, and savings programs. For more information on Iowa’s wage laws, please visit www.iowaworkforce.org/labor/wage.htm or call 515.281.3606. Questions concerning federal wage laws should be directed to the U.S. Department of Labor, Federal Wage and Hour Office at 515.284.4625.
7. Youth Employment (under age sixteen)
Employers that hire people under 16 must receive and keep a work permit on file that is accessible to any official charged with enforcing child labor laws. A complete list of all persons age 16 or less who are employed must be maintained.
A local school official designated as an issuing officer or an IWD Center can issue a work permit. Acceptable proof of age include: certified birth certificate copy, current passport, or certified baptism record. Written certification from a physician (appointed by the local board of education) may also suffice.
The employer is responsible for completing the work permit (child labor form) and listing all work the youth will be performing, equipment used, and hours to be worked. A parent must complete and sign the form, and return it to the issuing officer for approval.
The number of hours that youth are allowed to work is limited by both state law and federal child labor laws. Youth under 18 are also prohibited from working in certain occupations, performing certain duties and using certain equipment. Specific limits on youth employment are too detailed for this reference. Please see http://www.iowaworkforce.org/labor/childlabor.htm or call (515) 281-3606 for assistance on state laws.
For more information on federal child labor laws, contact the U.S. Department of Labor, Wage and Hour Division, in Des Moines at (515) 284-4625.
8. Occupational Safety and Health Administration (OSHA)
Employers must provide a work place that is free from recognized hazards. Compliance with occupational safety and health standards promulgated under federal and Iowa law is required. For information on OSHA standards please visit http://www.iowaworkforce.org/labor/iosh/index.html.
Iowa’s Occupational Safety and Health Act (IOSHA) requires reporting work-related incidents resulting in the death of an employee or in-patient hospitalization of three or more employees. The employer must orally report such incidents in person or by phone within eight hours of the incident. Employers can call (877) 242-6742. The line is available 24 hours a day, including weekends and holidays.
Employers can learn about potential hazards at their worksites and improve their occupational safety and health management systems by using the free and confidential consultation services available from IWD Occupational Safety and Health Administration Consultation Services. Please see http://www.iowaworkforce.org/labor/iosh/consultation/index.htm or contact an OSHA Consultant at (515) 281-7629.
9. Tax Information
You will need to register to be a withholding agent on the Iowa Business Tax Registration Form. You will need to apply for a federal identification number (FEIN) with the Internal Revenue Service. You can apply for an FEIN online or you can use form SS-4; this will become your state number for withholding tax purposes.
For more information on tax issues for employers visit the website http://www.iowaccess.org/tax/business/newbus.html or call (515) 281-3114
10. Purpose of I-9 Form
All U.S. employers are responsible for completion and retention of Form I-9 for each individual they hire for employment in the United States. This includes citizens and noncitizens. On the form, the employer must verify the employment eligibility and identify documents presented by the employee and record the document information on the I-9 Form. Acceptable documents are listed on the back of the form, and detailed under "Special Instructions."
To access the I-9 Form visit the website http://uscis.gov/graphics/formsfee/forms/files/i-9.pdf.
11. Child Support-New Hire Reporting, Income Withholding, and Medical Support
Employers Partnering in Child Support (EPICS) is a part of the Iowa Department of Human Services' Child Support Recovery Unit (CSRU). The Child Support Recovery Unit also includes the Specialized Customer Service Unit (SCSU), the Collection Services Center (CSC), and the Centralized Employee Registry (CER).
EPICS links the employer community to Iowa's CSRU. EPICS serves as a single point of contact for employers to obtain answers to their questions about child support. The EPICS unit provides specialized functions that include the enforcement of both income withholding and court ordered medical support. Employment and health insurance questionnaires are also handled through the EPICS unit. To ensure compliance with these provisions please visit https://secure.dhs.state.ia.us/epics/static/guide.htm or call (877) 274-2580.
Employers may now go online to iowachildsupport.gov to complete most of their child support business, including makie payments, report newly hired, or rehired employees or contractors, and report employee terminations or absences. For more information, visit iowachild support.gov, email the Iowa Child Support Recovery Unit at csrue@dhs.state.ia.us or call toll-free (877) 274-2580.
New Hire Reporting
Federal and state laws require employers to report newly hired and rehired employees to a central registry. “New hire reporting” and the CER were created to help (1) locate parents who owe support, and (2) speed up the payment of support through income withholding.
An employer doing business in Iowa who hires or rehires an employee must remit the CER reporting form (top half of Iowa Dept of Revenue's W-4 form) within 15 days of the hire or rehire date of the employee. There are also requirements for reporting contractors to the CER.
Income Withholding
Federal and state laws also require that if a parent owes child support, part of that parent's wages, periodic income, or other income must be withheld to pay support. As an Iowa employer, you may receive an income withholding order or notice that tells you how much to withhold from your employee for support. The notice tells you where and how to send payments and explains your rights and responsibilities.
Income must be withheld from the employee no later than the first pay period, 10 days from the day you received the order or notice of the income withholding. Payments should be sent to the Collection Services Center (CSC) no later than seven business days from the date you pay your employee. If the employee quits, is terminated, or is rehired you must notify the CSRU. If an employee is rehired, begin withholding child support payments after you receive a new notice to withhold.
Medical Support
Most orders for child support require the non-custodial parent to provide medical insurance coverage for the children. The non-custodial parent usually meets this responsibility by enrolling the children in the employer's insurance program. When the non-custodial parent fails to enroll the children, CSRU can do so by sending the National Medical Support Notice directly to the employer. Contact EPICS for detailed information on employer responsibility for ensuring medical coverage for an employee's children.
Under the Uniform Interstate Family Support Act, all states require employers to honor medical enrollment notices from other states. If you receive another state's notice to enroll the children in the employee's health plan, treat it as if it were based on an Iowa order and was issued by CSRU. Under Iowa law, you must allow enrollment of the employee’s children at any time. To ensure compliance with these provisions please visit https://secure.dhs.state.ia.us/epics/static/guide.htm or call (877) 274-2580.
12. Equal Employment Opportunity (EEO) and Affirmative Action (AA)
State requirements: The Iowa Civil Rights Commission’s primary duty is to enforce state law that prohibits discrimination in employment, public accommodations, housing, education and credit. State law provides that no one can be discriminated against in employment due to age, race, color, creed, national origin, religion, sex, pregnancy, sexual orientation, gender identity, or physical or mental disability. To learn more, call 800.457.4416
or visit www.state.ia.us/government/crc.
Federal Requirements: Federal legislation provides that no one can be discriminated in employment due to race, color, religion, age, sex, national origin or mental or physical disability. The federal Equal Employment Opportunity Commission enforces these laws. For more information, visit www.eeoc.gov or call 800.669.4000.
Family Medical Leave Act (FMLA)
The FMLA provides certain employees with up to 12 weeks of unpaid, job protected leave a year. It also requires group health benefits to be maintained during the leave. See the U.S. Department of Labor compliance assistance site for more information at: www.dol.gov or call 866.4.USA.DOL.
Access for Persons with Disabilities
Both the Iowa Civil Rights Act and the Americans with Disability Act (ADA) require businesses to make their businesses and services accessible to persons with disabilities. For assistance with ADA requirements, visit http://www.dol.gov/dol/topic/index.htm or call 866.4USA.DOL.
Accessibility Requirements
The Building Code Commissioner adopts requirements for accessibility to persons with disabilities of buildings and facilities available to the public. These requirements, which are included in the State Building Code, are based upon the federal Americans with Disabilities Act Accessibility Guidelines (ADAAG) and federal Fair Housing Act. Additional requirements may be established by local jurisdictions. Visit http://www.dps.state.ia.us/fm/building/accessibility/
index.shtml for more information on the federal ADAAG.