Iowa MINIMUM WAGES

Iowa State Minimum Wage for 2025

As of January 1, 2024, Iowa’s minimum wage stands at $7.25 per hour for non-tipped employees and $4.35 per hour for tipped employees, aligning with the federal minimum wage. Additionally, employers are required to pay overtime at 1.5 times the regular wage for employees who work beyond 40 hours per week. 

While Iowa hasn’t raised its minimum wage in 15 years, major changes might be looming owing to its neighboring states actively increasing the wage levels. 

Let’s further discuss the city-wise minimum wage rates for tipped and non-tipped employees in the next section. 

Minimum Wages in Iowa Cities

The state of Iowa follows a consistent minimum wage rate across cities, matching the federal rates.  

Here is a table summarizing the tipped and non-tipped minimum wages across the top 30 cities of Iowa. 

Threshold For Employees Exempt

Under the Fair Labor Standards Act (FLSA), Iowa categorizes employees as exempt and non-exempt. Here’s a clear definition of these terms: 

• Non-exempt employees: They are low-income earners, who receive the state-mandated minimum wage and overtime benefits. Any changes to minimum wage directly affect them. 

• Exempt employees: They are fixed earners that receive higher paychecks than their non-exempt counterparts. While changes in the minimum wage rates don’t impact their daily earnings directly, they can advocate for higher pay from their employers to maintain the pay parity. 

As of July 1, 2024, Iowa’s current salary threshold stands at $43,888 as per the Fair Labour Standards Act (FLSA) guidelines. This will further increase to $58,656 from January 1, 2025, and it will continue to be adjusted every three years henceforth. 

Employees earning below this threshold ($43,888) will lose their exempt status and become eligible for overtime pay at 1.5 times their regular rate when working beyond 40 hours per week. 

In the next section, let’s discuss the notable changes witnessed in Iowa over the past few decades. 

Historical Data of Iowa Minimum Wages 

Iowa has maintained a minimum wage of $7.25 since 2008. However, the Raise the Wage Act introduced in 2023 aims to increase the federal minimum wage to $17 by 2028. If passed, this could significantly impact Iowa where wage stagnation has been a point of concern, especially given the wage increases in its neighboring states. 

Here is a table summarizing the changes in the Iowa minimum wage from 1963 to 2023: 

* – Under the FLSA, the two rates shown in 1968, 1970, and 1976 reflect the former multiple-track minimum wage system in effect from 1961 to 1978.

Source: https://www.dol.gov/agencies/whd/state/minimum-wage/history

Exemptions in Minimum Wages of Iowa 

Department of Labor (DOL) exempts certain employees who are not entitled to the state or federal minimum wage. 

Exemptions to Iowa Minimum Wages are: 

• Tipped employees 
• Trainees and Learners 
• Executive, administrative, and professional roles 
• Outside salespersons 
• Certain retail, service, amusement, and recreational establishments 
• Employees with physical or mental limitations 
• Minors under 18 years of age 

Let’s clarify any further doubts in the next FAQ section.