ARC 8263C

ARC 8263C

Proposing rulemaking related to wage civil penalties
and providing an opportunity for public comment

A Regulatory Analysis for this rulemaking was published in the Iowa Administrative Bulletin on September 4, 2024. A public hearing was held on the following date(s):

●September 24, 2024

Any persons who intend to attend a public hearing and have special requirements, such as those related to hearing or mobility impairments, should contact the Division and advise of specific needs.

ITEM 1.Rescind 875—Chapter 34 and adopt the following new chapter in lieu thereof:

CHAPTER 34

WAGE CIVIL PENALTIES

875—34.1(91A) Civil penalties for Iowa Code chapter 91A violations. The director may, upon report of an affected employee or based on other credible information, seek to recover civil money penalties for violation(s) of Iowa Code chapter 91A.

875—34.2(91A) Investigation.

34.2(1) Prior to initiating a contested case proceeding, the director will, in writing, request written information from the complaining employee(s). This request for written information may be omitted for good cause, including urgent circumstances or the possession of sufficient reliable evidence from another source(s).

34.2(2) Prior to initiating a contested case proceeding, the director will, in writing, inform the employer of the nature of the alleged violation(s) and request the employer to provide, within 14 days, a response with relevant information, including information necessary for the to assess penalties. This request for written information may be omitted for good cause, including urgent circumstances or the possession of sufficient reliable evidence from another source(s).

34.2(3) The director may secure evidence or witnesses by administrative subpoena.

34.2(4) The director may, in response to a written complaint, request a warrant to enter a place of employment to inspect records, ask questions, and investigate in relation to possible violations of Iowa Code chapter 91A.

875—34.3(91A) Calculation of penalty.

34.3(1) The director will assess the penalty with due consideration for the size of the employer’s business, the gravity of the violation(s), the good faith of the employer, and the history of previous violations by granting appropriate penalty reductions.

34.3(2) The gross penalty for each distinguishable violation will be $500. The following are examples of distinguishable violations:

a.If the act or omission occurs during five consecutive pay periods affecting a single employee, there are five distinguishable violations.

b.If the act or omission occurs during a single pay period affecting 50 employees, there are 50 distinguishable violations.

34.3(3) The size of the business will be considered as follows:

34.3(4) Gravity will be considered by giving a 20 percent penalty reduction for a low-gravity violation or a 10 percent reduction for a medium-gravity violation. High-gravity violations will receive no gravity reduction. The gravity of a violation will be based primarily on its actual or potential harm to employees. Following are examples of gravity determinations:

a.A low-gravity violation includes any merely technical violation of Iowa Code chapter 91A that does not substantially prejudice any employee.

b.A high-gravity violation includes any violation causing financial injury to an employee.

34.3(5) Good faith will be considered by giving a 15 percent penalty reduction when there is sufficient evidence that the employer made earnest attempts to be well-informed about and in compliance with Iowa Code chapter 91A. A good-faith reduction will not be given if the employer committed a violation(s) after having received a complaint(s) or warning(s) about a practice clearly in violation of Iowa Code chapter 91A.

34.3(6) History will be considered by giving a 10 percent penalty reduction if the violation(s) was isolated. Consideration will be given to prior civil penalty complaints and may include prior wage claims. A history reduction will not be given if the violation(s) for which the penalty is being calculated occurred over an extended period of time.

34.3(7) If the employer does not, upon request of the director, provide information relevant to the penalty assessment, the director may deny any penalty reduction for which the employer does not provide responsive information.

875—34.4(91A) Settlement opportunity. Prior to initiating a contested case proceeding, the director will normally request, in writing, that the employer enter into settlement negotiations. This request may be omitted for good cause, including urgent circumstances or reasonable belief that the employer will not comply with the relevant section(s) of Iowa Code chapter 91A as part of a settlement. The director may, in consideration of the overall nature of the violations, the promptness of the employer’s remedial action, and administrative efficiency, accept less than the full penalty from the employer at any time as a settlement.

875—34.5(91A) Notice of penalty assessment; contested case proceedings.

34.5(1) To initiate an Iowa Code chapter 17A contested case proceeding, the director will serve a notice of penalty assessment in a manner consistent with service of original notice under the Iowa Rules of Civil Procedure. Such notice will include the following:

a.A statement that the notice concerns a civil penalty assessment for violation of wage laws.

b.A statement that, if a hearing is requested by the employer, the director will determine, after the hearing is held pursuant to Iowa Code sections 91A.12(2) and 91A.12(3), whether the penalty assessment will be upheld.

c.References to this chapter, Iowa Code section 91A.12, and any sections of Iowa Code chapter 91A that are alleged to have been violated.

d.The type of violation(s).

e.The number of violations.

f.The amount of the penalty.

g.A demand that the employer comply with the notice and recordkeeping requirements of Iowa Code section 91A.6(1).

h.A statement that the employer has the right to request a hearing within 30 days.

34.5(2) Employer nonresponse. If the employer does not respond to the notice of penalty assessment within 30 days of being served, the director will assess the full proposed penalty, and such assessment will be final.

34.5(3) Employer request for hearing. The employer may request a hearing within 30 days of being served by mailing such request to the director. Such request will include the address to which notice of hearing should be mailed. Upon such request, notice of the time and place of hearing will be mailed to the employer and a hearing pursuant to Iowa Code chapter 17A will be conducted before an administrative law judge.

34.5(4) Failure to request judicial review. If, after hearing, the employer does not request judicial review of an adverse decision within 30 days, the ruling is final.

875—34.6(91A) Judicial review.

34.6(1) Employer petition for Iowa Code chapter 17A judicial review. The employer may request judicial review of an adverse ruling within 30 days. Such petition for review shall name the agency as respondent and shall contain a concise statement of the following:

a.The nature of the agency action for which review is requested.

b.The action for which review is requested.

c.The facts on which venue is based.

d.The grounds for the relief sought.

e.The relief sought.

34.6(2) Jurisdiction. Judicial review will be in the district court of a county in which at least one violation occurred.

34.6(3) Transmittal of record. Within 30 days of the petition for judicial review, or longer as allowed by the court, the director shall transmit the record of the case to the reviewing court.

34.6(4) District court remedies. The district court may require the employer to deposit the amount of the assessed penalty with the clerk of court pending the outcome of the judicial review, may uphold the penalty, and may order that the employer comply with the notice and recordkeeping requirements of Iowa Code section 91A.6(1).

These rules are intended to implement Iowa Code chapters 91A and 17A.