United States – Iowa

Employment

There is no official form of employment contract – it can be orally or written.

Payroll

Salaries must be paid at the minimum monthly and no later than 12 work days from the end of the period. However, any reliable payment schedule is permitted.

HR & Labor

Working Hours: Full time employment is considered 40 hours per week. Employees should be compensated 150% of their regular wages if they have worked forty hours per week, twelve hours per day and twelve consecutive days.
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Minimum Working Age: Employees can be minimum 14 years old to be employed, restrictions apply to minors under 18 years of age.

Immigration

In order to work legally in the United States of America, an employee must be a citizen of the US, have a permanent resident status (Green Card), H-1B visa or L-1 visa.

Minimum Wage

Minimum wage is $7.25 per hour.

Pension Fund

Employer contributes 8.93% of the total payroll per month for the employees pension funds.

Employee contributes 5.95% of the monthly salary to pension fund.

Severance Payments

Iowa law does not either require or prohibit severance payments. It depends on the employer’s agreement with the employee.

Advance Notice

While there is no official period required, the general practice is is 2 weeks.

Termination Procedure

Iowa follows “employment at will” doctrine which means both the employee and employer are allowed to terminate the employment at any given time without a reason Therefore at the time of termination, the employer much pay all the necessary wages up to the day of termination.

Vacation Days

The state law does not require official vacation time to be given to the employees. It depends on the agreement with the employer.

Sick Days

No official law requires the employer to give employees sick days. Depends on the prior agreement upon start of employment.

Public Holidays

There are 9 official holidays, however private employers are not required to provide either time off or overtime pay on these days.

Expat Benefits

There are no official expat benefits. However different companies can offer special benefits for the expats working for them. Benefits differ from one company to another.

Additional Employee Withholdings

Federal:
1. Medicare - 1.45%
2. Social Security - 6.2%
3. Unemployment Tax - 6.0% and maximum taxable earnings are $7,000
State:
1. Unemployment Insurance - 1%

Federal:
1. Medicare - 1.45% (additional 0.9% contribution for employees earning less than $200,000)
2. Social Security - 6.2% with salary ceiling of $118,500
3. Unemployment Tax - 0%
State:
1. Unemployment Insurance - Voluntary contributions permitted

Social Security

As of 2011, after the Tax Relief, Unemployment Insurance Re-authorization and Job Creation Act of 2010, the Social Security tax rate is 4.2 percent of an employee's wages.
In addition, there is a limit to the amount of wages that are subject to Social Security taxes. In 2016, the taxable wage base is be $118,500.

VAT / State Sales Tax

The state sales tax is 6%.