What You Need to Know About Iowa’s Minimum Wage

Nothing in this article constitutes legal advice. Please consult a tax attorney or tax professional if you have questions about minimum wage compliance.

Small business owners in Iowa know how important it is to stay up to date on minimum wage regulations. Naturally, you want to make sure you’re complying, but staying aware of upcoming changes also lets you better plan for the future of your business.

That’s why we put together this quick guide with some key information you need to know about the Iowa minimum wage.

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What is minimum wage in Iowa in 2021?

The minimum wage in Iowa is $7.25. This is the same as the federal minimum wage, which has not changed since July 2009. Iowa is one of 21 states that follow the federal minimum wage.

There are some exceptions to the $7.25 minimum wage:

Will the Iowa minimum wage change in 2022?

There is currently no legislation being considered at the state level that would raise Iowa’s minimum wage above the federal level. Wage increases in Iowa are not in the forecast, and Iowa’s minimum wage history has been stagnant since 2008, when wages were raised from $5.15 per hour.

Iowa Republicans have used their majorities in both chambers to prevent local governments from raising the minimum wage

How should small business owners prepare for changes to Iowa’s minimum wage?

Here are some other steps you can take to make sure your business is ready for any financial changes, or if the minimum wage in Iowa does increase:

  • Evaluate your staffing: Take a look at your hourly, weekly, and monthly sales to determine if your current staffing levels are appropriate. Based on those sales and the rest of your finances, make a plan for any future hiring. Maybe you need to add a new full-time employee each year. Or maybe your sales are seasonal and hiring contract employees during your busy seasons makes more sense.

  • Hire the best: Hiring the right people is always important, but doubly so when you operate a small business. So take your time and cast a wide net when recruiting new employees. And once you have your team in place, make employee retention a priority by offering employee benefits and a path to growth and development to make your business a more attractive place to work.

  • Upgrade your technology: When you automate time-consuming aspects of management, with tools like automatic payroll, you can spend more time focusing on issues like staffing and growing your business. Square Payroll software is easy to customize and affordable with small business pricing and custom payroll features.

Make sure your business is prepared for anything with our COVID-19 small business resources. Also keep in compliance by following these helpful guidelines, consulting other Iowa wage resources, and discussing the Iowa minimum wage laws with your accountant and lawyer.