Gov. Branstad signs bill to roll back minimum wage

Workers comp rewrite also approved

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DES MOINES — Gov. Terry Branstad signed two major pro-business bills into law Thursday.

In back-to-back ceremonies, the governor signed a bill immediately barring cities and counties from setting minimum wages higher than the statewide $7.25 hourly floor and a separate measure making significant changes to the state’s workers’ compensation law.

“This is a bill I’ve waited for a long time,” said Branstad, before inking his name on House File 518 — the bill that rewrites Iowa’s 1913 workers comp law that he declared would improve Iowa’s competitive position with other states while balancing the needs of providing a safety net for injured workers.

“In the past 10 years, Iowa’s workers’ compensation system has mutated into a system benefiting trial lawyers at the expense of Iowa businesses and Iowa workers,” said Branstad. “Today, that ends by rebalancing the scales to ensure employees are compensated fairly for being injured on the job, while ensuring that abuses are curtailed.”

However, Mike Owen, executive director of the Iowa Policy Project called the governor’s two-pronged action Thursday a triumph for “ideology, spin and brute political power” that both limited workers’ injury recoveries and suppressed their wages.

“With a stroke of a pen, the governor can take away authority of local officials,” Owen said in a statement. “With another stroke he can hurt vulnerable Iowans who have been hurt on the job. It is likely, however, that Iowans will note the courage of elected supervisors in five counties to act when their state Legislature and governor could not find the will.”

House File 295, the local pre-emption bill, rolls back higher minimum wage thresholds approved in five counties, including Johnson and Linn, and asserts the state has sole authority in setting business and employment standards for Iowa. “Different county minimum wages create confusion, especially for cities that are in more than one county,” the governor said. “This bill provides uniformity through the state on Iowa’s minimum wage. It does nothing to force businesses to pay employees less than they are currently paying. I want to thank all of those who worked hard to provide local governments and Iowa businesses with predictability.” 

Branstad has said he would be open to a “modest” raise to Iowa’s minimum wage but GOP leaders in the House and Senate have ruled that out this session. However, House Speaker Linda Upmeyer, R-Clear Lake, told reporters the issue might not be completely off the table for the biennium.

“I think we’ll continue to have conversation about that and perhaps that is the case,” Upmeyer said about revisiting the topic in 2018. “We’ll see where we can build consensus around that issue to bring it forward and take some action on it.”

Senate Majority Leader Bill Dix, R-Shell Rock, said GOP legislators are focused on improving Iowa’s business climate to attract investment that will result in high-paying careers. He said the changes to modernize and rebalance the workers’ compensation system will enhance that effort.

“The reason we needed to take action is it was regulators and court decisions that had really tipped the balance in the opposite direction and in order to maintain that equity and fairness the Legislature needed to pursue some of those changes,” he said. “This is really been what we felt was the best path.”

In all, Branstad signed nine bills into law on Thursday.

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