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Davis Brown Employment and Labor Law Blog

HR Quick Take: Reduced Hours and Unemployment Compensation - April 29, 2020

Q: If I put my people on partial layoff or reduced weekly hours will they still qualify for unemployment compensation

A: This isn’t an easy question to answer in Iowa, there is no set hours baseline. Qualification is dependent upon a calculation of wages that also takes into consideration the number of dependents. 

If an employee applies for unemployment compensation, Iowa Workforce Development (IWD) calculates the weekly benefit amount based on the employee’s highest income paid quarter (HPQ) of the base period.

  • No dependents = HPQ divided by 23
  • One dependent = HPQ divided by 22
  • Two dependents = HPQ divided 21
  • Three dependents = HPQ divided 20
  • Four dependents = HPQ divided by 19. The four dependent calculation is the floor.

If an employee continues to work partial hours and their gross earnings equal or exceed the calculated weekly benefit amount plus $15, IWD will not make an unemployment payment. 

For example, let’s consider a retail cashier earning minimum wage, working part-time. Based on previous work history and hourly wage, this employee qualifies for Iowa’s current minimum weekly payment, $87. If the employee returns to work with reduced hours earning $102 in the week, then he would not qualify for job service benefits ($87 + $15). 

The current maximum weekly payment is $591 so if your employee qualified for the maximum payment and earned more than $606 in a week ($591 + $15) job service benefits would not be paid.

Additionally, employees are required to report any hours worked on a weekly basis when there is an open or active job service claim. An employee receiving benefits may earn up to 25% of the weekly benefit amount before any deduction is made from the unemployment benefit. Earnings over 25% of the unemployment benefit are deducted dollar for dollar.

Also note that in order to qualify for the additional federal payments of $600 a week, employees must first be eligible for unemployment compensation pursuant to the requirements of IWD.   

HR Quick Takes features client questions and answers from Iowa employment attorneys. If you have a question you’d like answered, email

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