Employee Classification: Iowa

Employee Classification requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Author: Michael Cardman, XpertHR Legal Editor

Summary

  • Iowa does not have an overtime law. However, it does provide exemptions from its minimum wage.
  • There are minimum wage exemptions for executives, administrators, professionals and outside salespersons. See Executive Employees, Administrative Employees, Professional Employees and Outside Salespersons.
  • When Iowa's exemption requirements diverge from those of the Fair Labor Standards Act, an employer must comply with whichever requirements are most favorable to their employees.

Executive Employees

An employee can qualify for the executive exemption under either the long test or the short test.

Under the long test, an executive employee must:

  • Have a primary duty consisting of management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof;
  • Customarily and regularly direct the work of two or more other employees therein;
  • Have the authority to hire or fire other employees or have his or her suggestions and recommendations as to the hiring or firing and as to the advancement and promotion or any other change of status of other employees be given particular weight;
  • Customarily and regularly exercise discretionary powers;
  • Devote no more than 20 percent (or, in the case of an employee of a retail or service establishment, no more than 40 percent) of the hours of work in the workweek to activities that are not directly and closely related to the performance of the work described above (this requirement does not apply to an employee who is in sole charge of an independent establishment or a physically separated branch establishment, or who owns at least a 20 percent interest in the enterprise in which he or she is employed); and
  • Be compensated for services on a salary basis at a rate of at least $310 per week, exclusive of board, lodging, or other facilities.

Under the short test, an executive employee must:

  • Be compensated on a salary basis at a rate of at least $500 per week, exclusive of board, lodging, or other facilities;
  • Have a primary duty consisting of the management of the enterprise in which the employee is employed or of a customarily recognized department or subdivision thereof, and includes the customary and regular direction of the work of two or more other employees therein.

+875 IAC 218.1.

Administrative Employees

An employee can qualify for the administrative exemption under either the long test or the short test.

Under the long test, an administrative employee must:

  • Have a primary duty consisting of either:
    • The performance of office or nonmanual work directly related to management policies or general business operations of the employer or the employer's customers, or
    • The performance of functions in the administration of a school system, or educational establishment or institution, or of a department or subdivision thereof, in work directly related to the academic instruction or training carried on therein;
  • Customarily and regularly exercise discretion and independent judgment; and
  • Either:
    • Regularly and directly assist a proprietor, an administrative employee or an executive employee;
    • Perform under only general supervision work along specialized or technical lines requiring special training, experience, or knowledge, or;
    • Execute under only general supervision special assignments and tasks;
  • Devote no more than 20 percent (or, in the case of an employee or a retail or service establishment, no more than 40 percent) of the employee hours worked in the workweek to activities that are not directly and closely related to the performance of the work described above;
  • Be compensated for services on a salary or fee basis at a rate of not less than $ 310 per week, exclusive of board, lodging, or other facilities.

Under the short test, an administrative employee must:

  • Be compensated on a salary basis at a rate of at least $500 per week, exclusive of board, lodging, or other facilities;
  • Have a primary duty consisting of either:
    • The performance of office or nonmanual work directly related to management policies or general business operations of the employer or the employer's customers, or
    • The performance of functions in the administration of a school system, or educational establishment or institution, or of a department or subdivision thereof, in work directly related to the academic instruction or training carried on therein; and
  • Customarily and regularly exercise discretion and independent judgment.

+875 IAC 218.2.

Professional Employees

An employee can qualify for the professional exemption under either the long test or the short test.

Under the long test, a professional employee must:

  • Have a primary duty consisting of the performance of work requiring knowledge of an advance type in a field of science or learning customarily acquired by a prolonged course of specialized intellectual instruction and study, as distinguished from a general academic education and from an apprenticeship, and from training in the performance of routine mental, manual, or physical processes;
  • Either:
    • Perform work that is original and creative in character in a recognized field of artistic endeavor (as opposed to work that can be produced by a person endowed with general manual or intellectual ability and training), and the result of which depends primarily on the invention, imagination or talent of the employee;
    • Teach, tutor, instruct or lecture in the activity of imparting knowledge and be employed and engaged in this activity as a teacher in the school system or educational establishment or institution by which employed;
  • Perform work that requires the consistent exercise of discretion and judgment in its performance;
  • Perform work that is predominantly intellectual and varied in character (as opposed to routine mental, manual, mechanical or physical work) and is of a character that the output produced or the result accomplished cannot be standardized in relation to a given period of time;
  • Devote no more than 20 percent of the hours of work in the workweek to activities that are not an essential part of and necessarily incident to the work described above;; and
  • Be compensated for services on a salary basis at a rate of at least $340 per week, exclusive of board, lodging, or other facilities.

Under the short test, an executive employee must:

  • Be compensated on a salary basis at a rate of at least $500 per week, exclusive of board, lodging, or other facilities;
  • Have a primary duty consisting of the performance either of work described above, which includes work requiring the consistent exercise of discretion and judgment, or of work requiring invention, imagination, or talent in a recognized field of artistic endeavor.

+875 IAC 218.3.

Outside Salespersons

To qualify for the outside salespersons exemption, an employee must:

  • Be employed for the purpose of and be customarily and regularly engaged away from the employer's place or places of business in either:
    • Making sales, which includes any sale, exchange, contract to sell, consignment for sale, shipment for sale, or other disposition; or
    • Obtaining orders or contracts for services or for the use of facilities for which a consideration will be paid by the client or customer;
  • Devote no more than 20 percent of the hours of work in the workweek to nonexempt activities other than those described above.

+875 IAC 218.5.