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Last Reviewed / Modified On 15 Mar 2018.


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Under the Iowa Workers Compensation Act, the term “employer” includes and applies to the following:
a.       A person, firm, association, or corporation, state, county, municipal corporation, school corporation, area education agency, township as an employer of volunteer fire fighters and emergency medical care providers only, benefited fire district, and the legal representatives of a deceased employer.
b.       A rehabilitation facility approved for purchase-of-service contracts or for referrals by the department of human services or the department of education.
c.       An eligible postsecondary institution as defined in section 261E.2, a school corporation, or an accredited nonpublic school if a student enrolled in the eligible postsecondary institution, school corporation, or accredited nonpublic school is providing unpaid services under a school-to-work program that includes but is not limited to the components provided for in section 258.10, subsection 2, paragraphs “a” through “f”. However, if a student participating in a school-to-work program is participating in open enrollment under section 282.18, “employer” means the receiving district.
d.       A community college as defined in section 260C.2, if a student enrolled in the community college is providing unpaid services under a school-to-work program that includes but is not limited to the components provided for in section 258.10, subsection 2, paragraphs “a” through “f”, and that is offered by the community college pursuant to a contractual agreement with a school corporation or accredited nonpublic school to provide the program. If a student participating in a school-to-work program that includes but is not limited to the components provided for in section 258.10, subsection 2, paragraphs “a” through “f”, is paid for services provided under the program, “employer” means any entity otherwise defined as an employer under this subsection which pays the student for providing services under the program.

Iowa Code § 85.61

“Worker” or “employee” means a person who has entered into the employment of, or works under contract of service, express or implied, or apprenticeship, for an employer; an executive officer elected or appointed and empowered under and in accordance with the charter and bylaws of a corporation, including a person holding an official position, or standing in a representative capacity of the employer; an official elected or appointed by the state, or a county, school district, area education agency, municipal corporation, or city under any form of government; a member of the state patrol; a conservation officer; and a proprietor, limited liability company member, limited liability partner, or partner who elects to be covered pursuant to section 85.1A except as specified in Iowa Code § 85.61

An undocumented worker falls within the broad definition of “employee” under the Workers’ Compensation Act. Staff Management v. Jimenez, File No. 12-1645 (Iowa 2013)

The following persons are not “workers” or “employees”:
a.       A person whose employment is purely casual and not for the purpose of the employer’s trade or business except as otherwise provided in section 85.1.
b.       An independent contractor.
c.       An owner-operator who, as an individual or partner, or shareholder of a corporate owner-operator, owns a vehicle licensed and registered as a truck, road tractor, or truck tractor by a governmental agency, is an independent contractor while performing services in the operation of the owner-operator’s vehicle if all of the following conditions are substantially present:
i.       The owner-operator is responsible for the maintenance of the vehicle.
ii.       The owner-operator bears the principal burden of the vehicle’s operating costs, including fuel, repairs, supplies, collision insurance, and personal expenses for the operator while on the road.
iii.       The owner-operator is responsible for supplying the necessary personnel to operate the vehicle, and the personnel are considered the owner-operator’s employees.
iv.       The owner-operator’s compensation is based on factors related to the work performed, including a percentage of any schedule of rates or lawfully published tariff, and not on the basis of the hours or time expended.
v.       The owner-operator determines the details and means of performing the services, in conformance with regulatory requirements, operating procedures of the carrier, and specifications of the shipper.
vi.       The owner-operator enters into a contract which specifies the relationship to be that of an independent contractor and not that of an employee.
d.       Directors of a corporation who are not at the same time employees of the corporation; or directors, trustees, officers, or other managing officials of a nonprofit corporation or association who are not at the same time full-time employees of the nonprofit corporation or association.
e.       Proprietors, limited liability company members, limited liability partners, and partners who have not elected to be covered by the workers’ compensation law of this state pursuant to section 85.1A

Iowa Code § 85.61.


General Rule

Under Iowa workers’ compensation law, an employer is immune at common law from lawsuits by injured workers. This employer immunity is the quid pro quo by which the employer gives up its normal defenses and assumes automatic liability for workplace injuries, while the employee gives up his right to common law verdicts. Ottumwa Hous. Auth. v. State Farm Fire & Cas. Co., 495 N.W.2d 723, 729 (Iowa 1993).

With limited exceptions, the Iowa Workers’ Compensation Act provides the exclusive legal remedy for an injured worker against his or her employer and co-worker(s) so long as the injury “is not caused by the other employee's gross negligence amounting to such lack of care as to amount to wanton neglect for the safety of another.” Iowa Code § 85.20


Where no adequate remedy is provided by Workers' Compensation Act, then the injured worker's claim falls outside of Act's exclusivity provision. Wilson v. IBP, Inc., 1996, 558 N.W.2d 132, rehearing denied, certiorari denied 118 S.Ct. 52, 522 U.S. 810, 139 L.Ed.2d 17 (holding an employee’s claims against employer and employer’s nurse for breach of fiduciary duty and defamation for implying to examining physician that employee was faking injury were within the jurisdiction of the district court).

If no “employer-employee relationship” exists, then the Iowa Workers’ Compensation Act does not provide the exclusive remedy of recovery to the injured worker. Farris v. Gen. Growth Dev. Corp., 354 N.W.2d 251, 255 (Iowa Ct. App. 1984).

If the employer is not insured for workers’ compensation coverage, then an employee who sustains an injury arising out of and in the course of employment may sue the employer at common law or before the Agency. If suit is brought in district court, a presumption will exist that the injury was caused by the employer’s negligence. “The burden of proof shall rest upon the employer to rebut the presumption of negligence, and the employer shall not be permitted to plead or rely upon any defense of the common law, including the defenses of contributory negligence, assumption of risk and the fellow servant rule.” Iowa Code § 87.21


General Rule

Iowa jurisdiction for workers’ compensation claims exists for employees injured within the state of Iowa. Schmidt v. Pittsburgh Plate Glass Co., 55 N.W.2d 227, 229-30 (Iowa 1952).

Extraterritorial Injuries

Injuries that occur outside of Iowa are compensable under the Iowa Workers’ Compensation Act if at the time of the injury any of the following applied:
a.       The employer has a place of business in this state and the employee regularly works at or from that place of business, or the employer has a place of business in this state and the employee is domiciled in this state.
b.       The employee is working under a contract of hire made in this state and the employee regularly works in this state.
c.       The employee is working under a contract of hire made in this state and sustains an injury for which no remedy is available under the workers' compensation laws of another state.
d.       The employee is working under a contract of hire made in this state for employment outside the United States.
e.       The employer has a place of business in Iowa, and the employee is working under a contract of hire which provides that the employee's workers' compensation claims be governed by Iowa law.

Iowa Code § 85.71
Iowa Code section 85.71 is a subject matter jurisdiction statute and, therefore, parties cannot confer such jurisdiction on the Commissioner by waiver or consent. Heartland Express, Inc. v. Terry, 631 N.W.2d 260, 265 (Iowa 2001).

For purposes of Iowa Code § 85.71, a contract of hire is formed where the employment offer is accepted, or where last act necessary to create a meeting of the minds or to complete the contract is performed. Id.

Statute of Limitations

The Iowa Workers’ Compensation Act creates a two-part statute of limitations. If no weekly compensation is paid for the contested injury, then an original proceeding for benefits under chapter 85, 85A, 85B, or 86 must be commenced within two years from the date of the occurrence of the injury for which benefits are claimed. If weekly compensation benefits have been paid for the injury, then such an original proceeding must be commenced within three years from the date of the last payment of benefits. Iowa Code § 85.26(1).

Likewise, an award for payments or an agreement for settlement (see Iowa Code § 85.35(2)) may be reviewed via a review-reopening proceeding so long as the benefits have not been commuted. Iowa Code § 85.26(2).

So long as no commutation of benefits has occurred, there is no statute of limitations for medical benefits of a claim upon which an award has been made or that has been resolved via an agreement for settlement. Iowa Code § 85.26(2)


The Workers’ Compensation Act requires notice of the injury within 90 days from the date of its occurrence. “Unless the employer or the employer's representative shall have actual knowledge of the occurrence of an injury received within ninety days from the date of the occurrence of the injury, or unless the employee or someone on the employee's behalf or a dependent or someone on the dependent's behalf shall give notice thereof to the employer within ninety days from the date of the occurrence of the injury, no compensation shall be allowed.” Iowa Code § 85.23

The purpose of the notice requirement is to protect the employer by insuring it is alerted to possibility of a workers’ compensation claim so that investigation can be made while information is fresh. Dillinger v. City of Sioux City, 368 N.W.2d 176 (Iowa 1985).

Notice may be satisfied either by the employee giving notice of the injury to the employer or by the employer having actual knowledge of the employee’s injury. Actual knowledge must include information that the injury might be work-connected. It requires more than the fact that the employer was aware of an employee’s illness. In other words, the notice requirement cannot be satisfied without an allegation that the injury was work-related. Johnson v. International Paper Co., 530 N.W.2d 475, 477 (Iowa App. 1995); Robinson v. Dept. of Transportation, 296 N.W.2d 809, 811 (Iowa 1980)

The employer’s actual knowledge of a work-related injury obviates the need for the employee to provide statutory notice to the employer. Id.

Manifestation (Cumulative Injury Claims)

“[A] cumulative injury is manifested when the claimant, as a reasonable person, would plainly be aware (1) that he or she suffers from a condition or injury, and (2) that this condition or injury was caused by the claimant’s employment.” Herrera v. IBP, Inc., 633 N.W.2d 284, 288 (Iowa 2001). The date an injury manifests is a fact to be found by the Commissioner.

Discovery Rule

The discovery rule tolls the running of both the statute of limitations and the 90-day notice period. These time limitations do not begin to run until the employee knows his or her physical condition is serious enough to have a permanent adverse impact on his or her employment or employability. In other words, the employee must know or should know the ‘nature, seriousness, and probable compensable character’ of his or her injury or condition before the time limitations periods will start running. Herrera, 633 N.W.2d at 288; Ranney v. Parawax Co., Inc., 582 N.W.2d 152 (Iowa 1998).

The 90-day notice period begins running when the employee is on inquiry notice of the nature, seriousness and probable compensable character of his or her injury or disease. Reasonableness of the employee’s conduct is to be judged in light of the employee’s own education and intelligence. The employee must know enough about the injury or disease to realize that it is both serious and work-connected, but positive medical information is unnecessary if the employee has information from any source which puts him on notice of its probable compensability. Robinson v. Dept. of Transportation, 296 N.W.2d 809, 811 (Iowa 1980).

In cases involving “traumatic event/latent manifestation” late-discovered injuries, the two-year statute of limitations for workers' compensation claims begins to run from the initial injury, not when the injury is later discovered. Swartzendruber v. Schimmel, 613 N.W.2d 646 (Iowa 2000).

Two-year statute of limitations for workers' compensation claims does not begin to run for a pure latent injury until the injury is discovered. Id.

Limitations period of statute requiring that action for workers' compensation benefits be commenced within three years from date of last payment of weekly compensation benefits was not extended by discovery rule, as limitations period did not run from date injury occurred. Bergen v. Iowa Veterans Home, 577 N.W.2d 629 (Iowa 1998).


General Rule

A compensable workers’ compensation claim in Iowa requires proof of four basic elements:
(1) the claimant suffered a “personal injury;”
(2) the existence of an employer-employee relationship;
(3) the injury arose out of the employment; and
(4) the injury arose in the course of the employment.

Meyer . IBP, Inc., 710 N.W.2d 213, 220 (Iowa 2006).


A “personal injury” means an injury to the body, the impairment of health or a disease not excluded by the Act which comes about not through the natural building up and tearing down of the human body, but because of a traumatic or other hurt or damage to the health of body of an employee;  something, whether an accident or not, that acts extraneously to the natural processes of nature and thereby impairs the health, overcomes, injures, interrupts or destroys some function of the body or otherwise damages or injures a part or all of the body. Black v. Creston Auto Co., 281 N.W. 189 (1938).

Types of Injuries

Traumatic Injuries

Traumatic or acute injuries caused by specific work-related events are compensable.

Cumulative Injuries

In addition to traumatic injuries, disability caused gradually over time by a workplace cumulative injury process is compensable.Babe v. Greyhound Lines, Inc., 456 N.W.2d 924 (Iowa App.1990).

Aggravation or Acceleration of Preexisting Conditions

If claimant had preexisting condition or disability which was aggravated, accelerated or “lighted up” by injury which arose out of and in the course of employment, resulting in disability, he is entitled to compensation.

Department of Transp., State of Iowa v. Van Cannon, 459 N.W.2d 900 (Iowa App.1990)

Hearing Loss

Iowa Code Chapter 85B makes hearing loss that arises out of and in the course of employment compensable. The maximum compensation payable for occupational hearing loss is 175 weeks for total occupational hearing loss. A qualified physician or audiologist may apportion the total hearing loss between occupational and nonoccupational loss.

Mental Injuries

The term “personal injuries” includes a mental injury standing alone. An employee's pure and nontraumatic mental injury arising out of and in the course of employment is compensable even absent physical injury or physical stimulus. Dunlavey v. Economy Fire and Cas. Co., 526 N.W.2d 845 (Iowa 1995).

Such a “mental/mental” injury is compensable if, after proving medical causation, the employee establishes that the mental injury is caused by workplace stress of a greater magnitude than day-to-day mental stresses experienced by other workers employed in the same or similar jobs, regardless of their employer. Id.

Employer-Employee Relationship

The factors to be considered in determining whether an employer-employee relationship exists for workers’ compensation purposes are:
(1) the right of selection, or to employ at will;
(2) responsibility for payment of wages by the employer;
(3) the right to discharge or terminate the relationship;
(4) the right to control the work; and
(5) identity of the employer as the authority in charge of the work or for whose benefit it is performed. The overriding issue is the intention of the parties. Caterpillar Tractor Co. v. Shook, 313 N.W.2d 503 (Iowa 1981).

An independent contractor is not covered under the Iowa Workers’ Compensation Act. An independent contractor may be defined as one who carries on an independent business and contracts to do a piece of work according to his own methods, subject to the employer's control only as to results. The commonly recognized tests of such a relationship are:
(1) the existence of a contract for the performance by a person of a certain piece or kind of work at a fixed price;
(2) the independent nature of the person’s business or the person’s distinct calling;
(3) the person’s employment of assistants with the right to supervise their activities;
(4) the person’s obligation to furnish necessary tools, supplies, and materials;
(5) the person’s right to control the progress of the work, except as to final results;
(6) the time for which the person is employed;
(7) the method of payment, whether by time or by job;
(8) whether the work is part of the regular business of the employer. Swain v. Menona County, 163 N.W.2d 918 (Iowa 1969).

In cases presenting a choice between categorizing a person as an employee or an independent contractor, the primary focus is on the extent of control by the employer over the details of the alleged employee's work. Iowa Mut. Ins. Co. v. McCarthy, 572 N.W.2d 537, 542 (Iowa 1997).

In contrast, when the question concerning the nature of the employment relationship arises in the context of a borrowed servant situation, the primary focus is on the intent of the parties; if the five factors are considered at all, it is merely as an aid in determining whether there is a contract of employment between the employee and the second employer. Id.

Finally, if the issue turns on whether the person is a “gratuitous employee,” the most important element is the responsibility for payment of wages. Id.

Arising Out of Employment

The “arising out of” element requires proof that a causal connection exists between the conditions of employment and the injury. The injury must not have coincidentally occurred while at work, but must in some way be caused by or related to the working environment or the conditions of employment. Lakeside Casino v. Blue, 743 N.W.2d 169 (Iowa 2007).

In the Course of Employment

Injuries that occur in the course of employment or on the employer's premises do not necessarily arise out of that employment. Lakeside Casino v. Blue, 743 N.W.2d 169 (Iowa 2007),

“In the course of” test for workers' compensation refers to time, place, and circumstances of injury, while “arising out of” test refers to cause and origin of injury. Miedema v. Dial Corp., 551 N.W.2d 309 (Iowa 1996).

An employer is not on the risk for an alleged workers' compensation injury sustained prior to the time the employee commenced work for the employer. Meyer v. IBP, Inc., 710 N.W.2d 213 (Iowa 2006). The time of injury must normally be known to properly consider the other elements of a claim for workers' compensation benefits. Id. A claimant must establish that her injury arose within the time and space boundaries of employment, and in course of activity related to employment. Bailey v. Batchelder, 576 N.W.2d 334 (Iowa 1998)

Personal Comfort Doctrine

The personal comfort doctrine may extend the time, place and circumstances of the injury to acts which minister to the personal comfort of the employee, for instance using the restroom or taking a smoking break.

Zone of Danger Exception to the Going and Coming Rule

The zone of danger exception to the going and coming rule in workers' compensation cases may apply when injuries are caused by intoxication arising out of and in course of employment (e.g., when the employer encourages or condones excessive drinking on job and profits from employee's drinking). The theory is that the employer ought to be responsible for foreseeable injuries suffered by the employee because of intoxication on the job encouraged or condoned by the employer. 2800 Corp. v. Fernandez, 528 N.W.2d 124 (Iowa 1995).

Special Errand Exception to the Going and Coming Rule

If the claimant is on a special errand or mission for his or her employer at time of injury, the injury may be held to have arisen in course of employment. Quaker Oats Co. v. Ciha, 552 N.W.2d 143 (Iowa 1996). Even though a claimant is on a special errand for employer at time of accident, his or her injury is not compensable if he or she is found to have deviated sufficiently from the line of duty so that his or her actions are foreign to the employer's work. Id.

In Ciha, the Court held the claimant did not deviate from the special errand he had performed for his employer while “on-call.” Therefore, he did not abandon his employment at time of the accident even though he did not take the most direct route home and chose a route that was scenic, was subject to less traffic and traffic signals, was five to seven minutes longer than the most direct route, and was the site of race that claimant planned to run on following day. Id.

Acts for the Benefit of the Employer

An employee does not cease to be in the course of his employment merely because he is not engaged in doing some specifically prescribed task, if, in course of his employment, he does some act he deems necessary for the benefit or interest of his employer. Casey v. Hansen, 26 N.W.2d 50 (Iowa 1947).

A college professor who died of a heart attack following an intramural basketball game was found to have sustained an injury in the course of employment because the intramural basketball program gave students the opportunity to have personal contact with faculty members and made a contribution to student retention. Thus, the college received substantial direct benefit from faculty participation in the program. Briar Cliff College v. Campolo, 360 N.W.2d 91 (Iowa 1984).


Going and Coming Rule

This rule applies only to employees with fixed place and hours of work. Under the going and coming rule,” hazards encountered by an employee in going to or returning from work are not ordinarily incident to his employment within meaning of phrase as used in Workers' Compensation Act. Bailey v. Batchelder, 576 N.W.2d 334 (Iowa 1998). The course of employment spans the time after the employee reaches the employer’s premises and his actual work begins and is carried on and ceases when he leaves.


If an employee voluntarily instigates and aggressively participates in horseplay, a resulting injury to the employee does not arise out of and in the course of employment and, therefore, is not compensable. Ford v. Barcus, 155 N.W.2d 507 (Iowa 1968).

A non-participating victim of horseplay may recover workers' compensation benefits. Xenia Rural Water Dist. v. Vegors, 786 N.W.2d 250 (Iowa 2010). Innocent employees who are injured as the result of another's horseplay may recover workers' compensation benefits. Not all acts of horseplay or levity will preclude an injured employee from recovering workers' compensation benefits; instead, a claimant's actions, including horseplay, will bar recovery under the workers' compensation scheme when the claimant substantially deviates from the employment. Id.

Willful Injury

The Act precludes awarding benefits where the injury is caused by “the willful act of a third party directed against the employee for reasons personal to such employee.” Iowa Code § 85.16.

Not all claimants who are the victims of workplace assaults, however, can be per se excluded from recovery under the Act. For instance, in Cedar Rapids Cmty. Sch. v. Cady, the claimant was the passive victim of an assault precipitated by an insane delusion. The claimant was entitled to benefits because the attack was not motivated by reasons personal to the claimant. 278 N.W.2d 298 (Iowa 1979)

An exception to the willful injury exclusion is suicide causally related to the work injury. Survivors' benefits are recoverable for suicide upon proof of a chain of causation directly linking the employment injury to the claimant’s loss of normal judgment, and domination by disturbance of the mind causing suicide. Kostelac v. Feldman's, Inc., 497 N.W.2d 853 (Iowa 1993).

Voluntary Intoxication

A person is “under the influence of alcohol,” or “intoxicated” under the workers' compensation statute, and thus precluded from recovering workers' compensation benefits, when one or more of the following are true:
(1) the person's reason or mental ability has been affected;
(2) the person's judgment is impaired;
(3) the person's emotions are visibly excited; and (4) the person has, to any extent, lost control of bodily actions or motions. Garcia v. Naylor Concrete Co., 650 N.W.2d 87 (Iowa 2002).

The claimant’s intoxication must have been both the cause in fact of the injury and a substantial factor in producing it. The claimant’s intoxication may be established by blood-alcohol level testing.

Voluntary Retirement and Lack of Motivation to Earn

Voluntary retirement or withdrawal from the workforce is a factor to be assessed in determining loss of earning capacity in an industrial disability claim. Copeland v. Boones Book and Bible Store, File No. 1059319 (App. Nov. 6, 1997). “Loss of earning capacity due to voluntary choice or lack of motivation is not compensable.” Fortune v. U.S.A. Healthcare, File No. 5005972 (App. Dec. Oct. 31, 2006).


There are a number of different benefits to which an injured worker may be entitled. Temporary disability benefits compensate the employee for lost wages caused by the work injury during a period of recovery or until the employee is able to return to work. Permanent disability benefits, on the other hand, compensate the employee for functional impairment or loss of earning capacity caused by the work injury. Where the injury or condition produces permanent disability, payment of permanency benefits commences at the termination of the healing period.

Injuries are either scheduled or unscheduled. Permanent disability benefits for scheduled member injuries are compensable according to the schedule set forth in Iowa Code section 85.34(2)(a)-(t). Unscheduled injuries are compensated for the industrial disability caused by the injury. Industrial disability is measured by the loss of earning capacity caused by the work injury.

Average (Gross) Weekly Wage

Iowa Code § 85.36(6) sets out the basis for determining the weekly earnings at the time of the injury when the employee is paid by the hour, by day, or by output. To compute the gross weekly earnings in these situations, the earnings from the employer for the “last completed period of 13 consecutive calendar weeks” prior to the injury are added together and divided by 13. Premium pay is not included in this calculation. Overtime hours are included at the straight-time pay scale. Tips are included.

When the employee has worked for the employer “less than 13 calendar weeks immediately preceding the injury,” the rate is based on the amount the employee would have earned had the employee been so employed by the employer the full 13 calendar weeks immediately preceding the injury and had worked, when work was available to other employees in a similar occupation. Iowa Code § 85.36(7).

If an employee earns either no wages or less than the usual weekly earnings of the regular full-time adult laborer in the line of industry in which the employee is injured in that locality, the weekly earnings shall be one-fiftieth of the total earnings which the employee has earned from all employment during the twelve calendar months immediately preceding the injury. Iowa Code § 85.36(9). Before utilizing this methodology, however, the Commissioner must make a preliminary factual finding that the employee either
(1) earns no wages or
(2) earns “‘less than the usual weekly earnings of the regular full-time adult laborer in the line of industry in which the employee is injured in that locality.’”

Swiss Colony, Inc. v. Deutmeyer, 789 N.W.2d 129, 134 (Iowa 2010). (citing King v. City of Mt. Pleasant, 474 N.W.2d 564, 566 (Iowa 1991).

Temporary Total Disability

An employee is entitled to temporary total disability benefits if the work related injury results in the employee being off work for more than three days due to the disability. The benefits begin on the fourth day and continue until the employee returns to work or is medically capable of returning to substantially similar employment, whichever comes first. See Iowa Code § 85.33.

Healing Period (HP)

An employee is entitled to healing period benefits if the injury produces a permanent impairment. The benefits begin on the first day of the injury and continue until the occurrence of the following: the employee returns to work; the employee reaches maximum medical improvement; or the employee becomes medically capable of returning to substantially similar employment, whichever comes first. Iowa Code § 85.34(1).

Difference Between TTD and Healing Period

The difference between temporary total disability compensation benefits and healing period compensation benefits involves permanent partial disability. If permanent partial disability results, the payments made prior to payment for permanency are healing period benefits. Healing period benefits accrue from the first day following the injury or the occurrence of injury. When an injury does not result in a permanent disability, the payments made are called “temporary total disability benefits.” Payments for temporary total disability accrue from the fourth day of the disability; however, the first three days are paid for if the temporary total disability lasts more than fourteen days. Clark v. Vicorp Restaurants, Inc., 696 N.W.2d 596, 604 (Iowa 2005) (citations omitted). Please click the link below to view case details

Temporary Partial Disability (TPD)

Temporary partial disability benefits are designed to reimburse the employee while he or she is temporarily disabled yet still working for the employer, albeit in a different position. Mannes v. Fleetguard, Inc., Travelers Ins. Co., 770 N.W.2d 826 (Iowa 2009).

These benefits equal two-thirds of the difference between the employee’s weekly earnings at the time of injury and the employee's actual gross weekly income from employment during the period of temporary partial disability. Iowa Code § 85.33(4).

Permanent Partial Disability (TPD)

Permanent partial disabilities are either scheduled or unscheduled. St. Luke's Hosp. v. Gray, 604 N.W.2d 646, 653 (Iowa 2000); see Iowa Code § 85.34(2)(a)-(t). “The compensation shall be based upon the extent of the disability and upon the basis of eighty percent per week of the employee's average spendable weekly earnings, but not more than a weekly benefit amount, rounded to the nearest dollar, equal to one hundred eighty-four percent of the statewide average weekly wage paid employees . . . in effect at the time of the injury.” Id. “The minimum weekly benefit amount shall be equal to the weekly benefit amount of a person whose gross weekly earnings are thirty-five percent of the statewide average weekly wage.” Id.

Scheduled Member Injuries

Scheduled Body Members Weeks
Loss of thumb 60
Loss of first finger 35
Loss of second finger 30
Loss of third finger 25
Loss of fourth finger 20
Loss of hand 190
Loss of arm 250
Loss of great toe 40
Loss of any other toe 15
Loss of foot 150
Loss of leg 220
Loss of eye 140
Loss of hearing in one ear 50
Loss of hearing in both ears 175
Permanent disfigurement, face or head 150
Body as a whole/industrial disability 500

This table contains the number of weeks of benefits payable for 100% loss, or loss of use, of the body member. If the PPD rating is less than 100%, the percentage rating is multiplied by the number of weeks shown. For example a 20% loss or loss of use, of a thumb would be computed as 20% of 60 weeks or 12 weeks of PPD benefits.

Unscheduled (Body as a Whole) Injuries

For an unscheduled loss, the employee's industrial disability must be determined. Sherman v. Pella Corp., 576 N.W.2d 312, 320–21 (Iowa 1998). Industrial disability measures an employee's lost earning capacity. Id. at 321. Several factors are considered in determining such loss. Id. These include the employee's functional impairment, age, education, work experience, qualifications, ability to engage in similar employment, and adaptability to retraining to the extent that any factor affects the employee's prospects for relocation in the job market. Id.; St. Luke’s Hosp. v. Gray, 604 N.W.2d 646, 653 (Iowa 2000).

“The focus is not solely on what the worker can or cannot do; industrial disability rests on the ability of the worker to be gainfully employed.” Myers v. F.C.A. Servs., Inc., 592 N.W.2d 354, 356 (Iowa 1999). A comparison of actual earnings before and after the injury is important to the earning capacity analysis. Second Injury Fund v. Nelson, 544 N.W.2d 258, 266 (Iowa 1996).

Permanent Total Disability (PTD)

If an employee sustains an injury which prevents the employee from returning to gainful employment, the employee may be entitled to permanent total disability benefits for the duration of the permanent total disability. See Wal-Mart Stores, Inc. v. Caselman, 657 N.W.2d 493 (Iowa 2003). “Total disability does not mean a state of absolute helplessness.” IBP, Inc. v. Al-Gharib, 604 N.W.2d 621, 633 (Iowa 2000).

Iowa also recognizes the odd-lot doctrine, which provides that “a worker becomes an odd-lot employee when an injury makes the worker incapable of obtaining employment in any well-known branch of the labor market. An odd-lot worker is thus totally disabled if the only services the worker can perform are “so limited in quality, dependability, or quantity that a reasonably stable market for them does not exist....” Guyton v. Irving Jensen Co., 373 N.W.2d 101, 105 (Iowa 1985).

Second Injury Fund of Iowa

The Second Injury Fund is a special fund created by the Iowa legislature so that if an employee has sustained a second injury to his/her hand, foot, arm, leg, or eye, the employee may be entitled to additional benefits through the fund.

To trigger the application of the Second Injury Fund, the employee must establish that
(1) the employee has either lost, or lost the use of a hand, arm, foot, leg, or eye;
(2) the employee sustained the loss, or loss of use of another such member or organ through a work related-that is, compensable-injury; and
(3) there must be some permanent disability from the injuries.

Anderson v. Second Injury Fund, 262 N.W.2d 789, 790 (Iowa 1978); see also Second Injury Fund of Iowa v. Shank, 516 N.W.2d 808, 812-13 (Iowa 1994). Second Injury Fund v. Neelans, 436 N.W.2d 355, 357 (Iowa 1989). Nor does the prior loss or loss of use have to be a total loss or loss of use. Second Injury Fund v. Braden, 459 N.W.2d 467, 469 (Iowa 1990).

Vocational Rehabilitation Benefits

“An employee who has sustained an injury resulting in permanent partial or permanent total disability, for which compensation is payable . . . , and who cannot return to gainful employment because of such disability, shall upon application to and approval by the workers’ compensation commissioner be entitled to a one hundred dollar weekly payment from the employer in addition to any other benefit payments, during each full week in which the employee is actively participating in a vocational rehabilitation program recognized by the vocational rehabilitation services division of the department of education . . . . Such additional benefit payment shall be paid for a period not to exceed thirteen consecutive weeks except that the worker’s compensation commissioner may extend the period of payment not to exceed an additional thirteen weeks if the circumstances indicate that a continuation of training will in fact accomplish rehabilitation.” Iowa Code § 85.70

Death (Survivor) Benefits

“When death results from the injury, the employer shall pay the dependents who were wholly dependent on the earnings of the employee for support at the time of the injury . . . .” Iowa Code § 85.31

The legislature deems the following persons wholly dependent upon the deceased worker and, therefore, entitled to survivor benefits:
a.       The surviving spouse except if the surviving spouse at the time of the injury had willfully deserted the deceased worker without fault of the worker or if the surviving spouse was not married to the deceased employee at the time of the injury.
b.       Any children under 18 years of age and over that age if physically or mentally incapacitated from earning, whether actually dependent or not at the time of death. Included within this subset are adopted children and children conceived but not yet born at the time of the employee’s injury.

Iowa Code § 85.42.
Survivor benefits are payable:
a.       To the surviving spouse for life or until remarriage, provided that upon remarriage two years' benefits shall be paid to the surviving spouse in a lump sum, if there are no children entitled to benefits[;]
b.       To any child of the deceased until the child shall reach the age of eighteen, provided that a child beyond eighteen years of age shall receive benefits to the age of twenty-five if actually dependent, and the fact that a child is under twenty-five years of age and is enrolled as a full-time student in any accredited educational institution shall be a prima facie showing of actual dependency[;]
c.       To any child who was physically or mentally incapacitated from earning at the time of injury causing death for the duration of the incapacity from earning.

Iowa Code § 85.31 ; see Rojas v. Pine Ridge Farms, L.L.C., 779 N.W.2d 223 (Iowa 2010).

Medical Benefits

The statutory workers’ compensation scheme in Iowa places control of the medical treatment in the hands of the employer. Iowa Code § 85.27. Employers are required to provide medical treatment to an injured employee that is
(1) prompt,
(2) reasonably suited to treat the injury, and
(3) without undue inconvenience to the employee. Iowa Code § 85.27 ; Good v. Tyson Foods, Inc., 756 N.W.2d 42 (Iowa App. 2008). If medical care is not provided in accordance with these principles, the employee can file a petition for alternate medical care, which may be awarded by the Commissioner. Id.

Nothing prohibits an employee from selecting his or her own medical treatment at his or her own expense following a work injury. Bell Bros. Heating & Air Conditioning v. Gwinn, 779 N.W.2d 193 (Iowa 2010). An employee who abandons the care offered by the employer and unilaterally directs his or her own medical care may assert a claim for reimbursement or payment of the medical treatment received. Such an employee must prove that the unauthorized care was reasonable and beneficial under all the surrounding circumstances, including the reasonableness of the employer-provided care, and the reasonableness of the decision to abandon the care furnished by the employer in the absence of an order from the Commissioner authorizing alternative care. In this context, the concept of reasonableness includes the quality of the alternative care and the quality of the employer-provided care. Id. Unauthorized medical care is “beneficial” as required under the workers' compensation statute, to obtain reimbursement for unauthorized care, if it provides a more favorable medical outcome than would likely have been achieved by the care authorized by the employer. Id.

In general, an award of medical benefits should be paid to the medical provider and not to the employee. Krohn v. State, 420 N.W.2d 463 (Iowa 1988). Where, however, the employee personally paid the medical expenses, it is appropriate for the employer/insurer to reimburse the employee upon an award being entered for payment of the same. Id.

Penalty Benefits

Penalty benefits will be awarded if a denial, delay in payment, or termination of benefits occurs without reasonable or probable cause or excuse known to the employer or insurance carrier at the time of the denial, delay in payment, or termination of benefits. The Commissioner is authorized to award up to 50% of the benefits unreasonably denied, delayed, or terminated.

In order for penalty benefits to be awarded, the employee must first prove a denial, delay in payment, or termination of benefits occurred. Only if the employer fails to prove a reasonable or probable cause or excuse for the denial, delay in payment, or termination of benefits may penalty benefits be awarded.

In order to prove a reasonable or probable cause or excuse, the employer must establish: (1) that the excuse was preceded by a reasonable investigation and evaluation by the employer or insurance carrier into whether benefits were owed; (2) that the results of the investigation and evaluation were the actual basis upon which the employer or insurance carrier contemporaneously relied to deny, delay, or termination benefits; and (3) that the basis for the denial, delay or termination was contemporaneously conveyed by the employer or insurance carrier to the employee at the time of the denial, delay or termination of benefits.

Iowa Code § 86.13(4).

For purposes of determining whether penalty benefits should be awarded for an employer's denial of workers’ compensation claim, a “reasonable basis” for the denial of a claim exists if the claim is “fairly debatable.” Mycogen Seeds v. Sands, 686 N.W.2d 457 (Iowa 2004). Whether the employer’s basis for denial was fairly debatable, and thus not subject to penalty benefits, turns on whether there was a factual dispute that, if resolved in favor of the employer and its insurer, would have supported their denial of compensability. Id.


If benefits are not paid when due, interest of ten percent per year must be added to the weekly compensation payments owed. Iowa Code § 85.30; § 535.3. Interest is payable from the date the weekly compensation installment was due, except employers have an 11-day grace period following the injury before they are required to pay workers' compensation benefits to allow an evaluation and investigation of injury and a determination of correct weekly compensation rate. Robbennolt v. Snap-On Tools Corp., 555 N.W.2d 229 (Iowa 1996).

Interest due on permanent partial disability benefits is calculated forward from the date healing period benefits end. Simple, not compound, interest is allowed under the Workers’ Compensation Act. Davidson v. Bruce, 594 N.W.2d 833 (Iowa Ct. App.1999).

There is no provision in the Iowa Code for interest on medical expenses. Klein v. Furnas Elec. Co., 384 N.W.2d 370 (Iowa 1986). Penalty benefits may not be awarded on a late interest payment. Weishaar v. Snap-On Tools Corp., 506 N.W.2d 786 (Iowa Ct. App. 1993).


Subrogation and credit are implicated in claims caused by third-parties for which a remedy and recovery exist at common law. For example, where a truck driver is involved in a work-related motor vehicle accident caused by another driver, any expenses required to be made on behalf of the truck driver by the employer/insurer may be recouped by an action at law against the adverse driver (commonly referred to as the third-party tortfeasor). The right to sue the third-party tortfeasor rests first with the injured employee, but can shift to the employer/insurer as explained in ” Subrogation” below.

Before a third-party civil lawsuit can be settled, the employee and employer/insurer must all consent to the amount and allocation of the settlement funds. If agreement cannot be reached by the employee and employer to the terms of the proposed settlement, then the dispute may be presented to the Commissioner for resolution. If a settlement is reached with agreement of the employee and employer, a written memorandum of the same must be filed by the employer/carrier with the Commissioner’s office. Iowa Code §§ 85.22(1)-(4).

If the employee brings suit against the third-party tortfeasor and obtains a recovery by way of settlement or verdict, the employer/carrier is entitled to be indemnified out of the recovery of damages to the extent of the workers’ compensation payments made (including medical and indemnity benefits) and has a lien on the judgment for additional compensation required to be made in the future by the employer/carrier.

The employee or his/her legal representative must serve a copy of the original notice (regarding the third-party lawsuit) upon the employer not less than 10 days before the trial of that case. Within 30 days thereafter, the employer/carrier must file its notice of lien in the office of the clerk of court where the action was brought. Iowa Code § 85.22(1).

Note: compromise settlements under Iowa Code section 85.35(3) waive the employer’s/carrier’s lien and right of subrogation. See “SETTLEMENT” below.


Under workers' compensation law, if an employee fails to bring an action against a third-party tortfeasor, the employer or employer's insurer has the right of subrogation and may maintain an action against the third-party tortfeasor. Daniels v. Hi-Way Truck Equipment, Inc., 505 N.W.2d 485, 487-88 (Iowa 1993); Armour-Dial, Inc. v. Lodge & Shipley Co., 334 N.W.2d 142, 144 (Iowa 1983); see also Iowa Code § 85.22(2).

Before the employer can become “subrogated” to the rights of the employee, two elements must be established:
(1) a proper demand upon the employee to initiate the action, and
(2) a refusal or failure to take action within ninety days by the employee.

Armour-Dial, Inc., 334 N.W.2d at 146; Liberty Mut. Ins. Co. v. Winter, 385 N.W.2d 529, 531-32 (Iowa 1986).


Pursuant to Iowa Code section 85.22(2), a credit is “an entitlement to an immediate recovery which is added to the total amount of recovery of a subrogor.” Shirley v. Pothast, 508 N.W.2d 712, 718 (Iowa 1993).

An employer or employer’s insurer may receive a credit for workers’ compensation benefits they paid at the time of the employee-plaintiff’s third party recovery. However, the employer or employer’s insurer do not have the right to a credit for future payments of workers’ compensation benefits, such as benefits they have not made at the time the third party recovery was secured. See Christen v. Pocket Lounge, Inc., 519 N.W.2d 401 (Iowa 1994); Shirley, 508 N.W.2d 712; Fisher v. Keller Industries, Inc., 485 N.W.2d 626 (Iowa 1992). Rather, the employer’s/carrier’s right of reimbursement with respect to future workers’ compensation benefits stems from the lien created by Iowa Code section 85.22(1).


Any lawyer permitted to practice law in the State of Iowa may practice in the field of workers’ compensation law.

In Iowa, workers’ compensation is administrated by the Iowa Division of Workers’ Compensation, an administrative agency inside the Iowa Department of Workforce Development. As of December 2014, the Division of Workers’ Compensation is administered by the Workers’ Compensation Commissioner, Christopher Godfrey. Commissioner Godfrey also employs an Assistant Workers’ Compensation Commissioner and 12 Deputy Commissioners.

Certifying Organization

An applicant who has passed the bar examination and is eligible for admission must be administered the lawyer's oath by a Supreme Court Justice within one year of the date the bar examination score was posted or the date of fulfilling all eligibility requirements, whichever is later. Iowa Ct. Rs. 31.1(2)(d)

Required Documents

a.No person shall be permitted to take the examination for admission without proof that the person has received the degree of LL.B. or J.D. from a reputable law school fully approved by the American Bar Association. Proof of this requirement shall be by affidavit of the dean of such law school, and shall show that the applicant has actually and in good faith pursued the study of law resulting in the degree required by this rule. The affidavit must be made before an officer authorized to administer oaths and having a seal. Iowa Ct. Rs. 31.8; see also Iowa Ct. Rs. 31.13(2).
b.The following proofs must be filed with the office of professional regulation to qualify an applicant for admission:
i.A certificate of admission in the applicant's state of licensure.
ii.A certificate of an applicant's good moral character from a judge or clerk of the Iowa district court or of a court where the applicant has practiced within the last five years.
iii.A completed fingerprint card.

Additional Information

The Iowa board of law examiners shall make an investigation of the moral character and fitness of any applicant and may procure the services of any bar association, agency, organization, or individual qualified to make a moral character or fitness report. Iowa Ct. Rs. 31.9(1).


Iowa does not require claims professionals to be licensed in order to manage and adjust workers’ compensation claims. There is also no continuing education requirement for claims professionals. However, there are still some requirements that claims professionals must be aware of when managing and adjusting Iowa workers’ compensation claims.

Iowa EDI System

Iowa uses an Electronic Data Interchange (EDI) system for filing workers’ compensation first reports of injury (FROIs), subsequent reports of injuries (SROIs), annual reports, and final reports. As of July 1, 2001, the Iowa Workers’ Compensation Division no longer accepts any paper FROIs or SROIs. Rule 876 IAC 11.6(85,86). See the Iowa Department of Workers’ Compensation website for the "compliance requirements and forms"

Designated Representative

All workers’ compensation insurance carriers and self-insurers are required to have a designated representative geographically located in Iowa. Rule 876 IAC 2.3(86,87). The representative must have knowledge of Iowa workers’ compensation law and authority to expedite claims. Rule 876 IAC 2.3(86,87). Additionally, the Iowa Department of Workers’ Compensation must be given the name, address, and phone number of the representative and notified of any changes within ten days. Rule 876 IAC 2.3(86,87).


Workers’ Compensation Proceedings

Iowa Workers’ Compensation Commissioner – Qualifications and Duties

The Iowa Division of Workers’ Compensation is led by a Workers’ Compensation Commissioner. The Commissioner is appointed by the Iowa Governor, and is subject to confirmation by the senate. The Commissioner is given a term of 6 years, and must be a lawyer admitted to practice in Iowa. Iowa Code § 86.1

The Commissioner’s duties include the responsibility to adopt/enforce rules necessary to implement the Workers’ Compensation law; prepare and distribute necessary blanks relating to computation, adjustment and settlement of compensation; prepare/publish statistical reports and analyses regarding the cost, occurrence, and sources of employment injuries; administer oaths; examine books and records of parties subject to the Workers’ Compensation laws; and provide a seal for the authentication of orders and records and for other purposes as required. Iowa Code § 86.8.

The Iowa Legislature’s intention in enactment of the Iowa Workers’ Compensation Act was to place the administration very largely in the industrial Commissioner. Tebbs v. Denmark Light & Tel. Corp., 300 N.W.328 (Iowa 1941). While the Commissioner is not a court, he/she is still empowered to decide law questions that arise in matters properly before the Commissioner. Travelers Ins. Co. v. Sneddon, 86 N.W.2d 870 (Iowa 1957).

Appointment of Workers’ Compensation Chief Deputies and Deputies

The Commissioner may appoint Chief Deputy Workers’ Compensation Commissioners and Deputy Workers’ Compensation Commissioners who must serve at the pleasure of the Commissioner. All Chief Deputy Commissioners and Deputy Commissioners must be lawyers admitted to practice in Iowa. Iowa Code § 86.2. Deputy Commissioners are generally delegated the authority to perform specified functions made by the Commissioner, and have any necessary specified powers to perform any necessary or specified duties pertaining to the Commissioner’s office. Deputy Commissioners may also have the ability to issue a final decision, in some circumstances, as if the decision was issued by the agency. Iowa Code § 86.3.

Qualifications of Chief Deputies and Deputies

All Chief Deputy Commissioners and Deputy Commissioners are appointed by the Commissioner and must be licensed to practice law in Iowa. Iowa Code § 86.2. The Commissioner, Chief Deputy Commissioners, and Deputy Commissioners are also subject to limitations related to their positions. The Commissioner, Chief Deputy Commissioners, and Deputy Commissioners must not espouse the election or appointment of any candidate to any political office. Iowa Code § 86.4; Op. Atty. Gen. (Linquist), April 10, 1990. If this provision is violated, the person violating the provision shall be guilty of a simple misdemeanor. Iowa Code § 86.4. The Iowa Attorney General’s office has further defined this provision to prohibit “active political” solicitation at the local, state, and national levels. Op. Atty. Gen. (Linquist), April 10, 1990. In addition, the Commissioner, Chief Deputy Commissioners, and Deputy Commissioners cannot make political contributions to any political party’s campaign fund. Op. Atty. Gen., 1934, p. 668. Moreover, any candidates for appointment cannot make any express or implied promises to another in consideration of any assistance or influence given or recommendation made that the candidate will, if appointed as a Commissioner, appoint such person or one whom the person may recommend to any office within the power of the Commissioner to appoint. Any candidate who makes such promises shall be guilty of a simple misdemeanor. Iowa Code § 86.5.

The Commissioner shall not be financially interested in any business enterprise coming under or affected by the Iowa Workers’ Compensation laws during the Commissioner’s term of office. A violation of this statute will result in a removal of the Commissioner from office. Iowa Code § 86.7

Presiding officers are also limited by Iowa Administrative Law from engaging in ex parte communications unless provided by statute. Iowa Code § 17A.17. Additionally, all persons acting in an administrative judicial capacity, including the Commissioner, Chief Deputy Commissioners, and Deputy Commissioners, must abide by a code of administrative judicial conduct. See Rule 481 IAC 10.29(10A).

Contested Case Hearings – Arbitration Decision Procedure

A contested case begins after the claimant files an original notice and petition with the Iowa Division of Workers’ Compensation. Rule 876 IAC 4.6(85,86,17A). Contested case hearings are also commonly referred to as “arbitration hearings.”

The Commissioner cannot take any action on a contested case unless the adverse party has answered the claimant’s petition or it can be proven that the adverse party was properly served. Rule 876 IAC 4.8(86). A respondent shall make an appearance by filing an answer or motion within 20 days after receiving service of the original notice and petition. Rule 876 IAC 4.9(17A).

All hearings must be presided over by the Commissioner or, in most instances, by a Deputy Commissioner. The Commissioner or Deputy Commissioner may make inquiries in contested case proceedings as necessary. Contested case hearings must be conducted in the judicial district where the injury occurred, unless the parties stipulate to another jurisdiction or the Commissioner or Deputy Commissioner orders the hearing to be held elsewhere. Iowa Code § 86.17.

In general, the contested case hearings are bound by the Iowa Rules of Evidence and Rules of Civil Procedure. More specifically, the deposition of any witness may be taken and used as evidence in any pending proceeding or appeal within the agency, provided that it does not violate the rules of evidence or civil procedure. Iowa Code § 86.18. Additionally, irrelevant, immaterial or unduly repetitious evidence should be excluded; copies of original documentary evidence may be admissible; and witnesses at the hearing or persons whose testimony has been submitted in written form shall be subject to cross examination by any party. Iowa Code § 17A.14. Also, each party is entitled to discovery, pursuant to the Iowa Rules of Civil Procedure, and generally any medical records are admissible. Rule 876 IAC 4.18(85,86,17A). However, since these are administrative hearings, the Iowa legislative intent shows that the provisions of the rules of evidence and procedure, for purposes of the Workers’ Compensation Act, should not be construed with the same strictness that is applied in other legal proceedings. Yates v. Humphrey, 255 N.W. 639 (Iowa 1934).

Hearings must be recorded or transcribed by a certified shorthand reporter, and the Commissioner or Deputy Commissioner can appoint or direct a party to furnish the reporter at the party’s initial expense in order to transcribe the hearing. The charges of such reporting will be taxed as costs and the party initially paying the expense of the presence or transcription shall be reimbursed. Iowa Code § 86.19.

Investigatory Powers of the Iowa Workers’ Compensation Agency

The Commissioner, or any of the Commissioner’s representatives presenting a certificate of authority from the Commissioner, shall have access to inspect and examine all books, records, and payrolls of the employers that show or reflect in any way upon the amount of wage expenditure of the employer, including the number of persons employed by the employer and any other information as may be necessary for the Commissioner’s administration of the law. Iowa Code § 86.10.

Contested Case Decisions

A Deputy Commissioner must issue a written decision that includes findings of fact and conclusions of law being separately stated. All conclusions of law are to be supported by cited authority or by reasoned opinion. Iowa Code § 17A.16. All decisions must be sufficiently detailed to show why the Deputy Commissioner made a particular finding, especially if the Deputy Commissioner accepts one piece of evidence over a conflicting piece of evidence. Catalfo v. Firestone Tire & Rubber Co., 213 N.W.2d 506 (Iowa 1973).

Workers’ Compensation Appeal Process

General Appeal Process –Agency

Any party aggrieved by a decision, order, ruling, finding or other act of a Deputy Commissioner in a contested case can appeal to the Commissioner. The Commissioner may then affirm, modify, or reverse the decision of the Deputy Commissioner, or the Commissioner may remand the decision to the Deputy Commissioner for further proceedings. Iowa Code § 86.24. The Commissioner’s review of the contested case is de novo, meaning that the Commissioner can look at the entire record presented to the Deputy Commissioner and make factual determinations based on that record. Rule 876 IAC 4.28(17A, 86). The decision of the Commissioner upon appeal is final agency action. Iowa Code § 86.24.

A notice of appeal to the Commissioner must be filed within 20 days from the date of filing of the decision, order or ruling of a Deputy Commissioner. Rule 876 IAC 4.27(17A,86).

General Appeal Process – Judicial Review

Only after there has been a review and decision by the Commissioner can a party seek further judicial review in the Iowa District Court. Iowa Code § 86.26; Stice v. Consolidated Indiana Coal Co., 291 N.W. 452 (Iowa 1940). Petitions for judicial review may be filed with the Polk County District Court, in the district court for the county in which the petitioner resides or has its principal place of business, or in District Court of the county in which the arbitration hearing was held. Iowa Code § 17A.19; Iowa Code § 86.26. The Commissioner must give the reviewing court the original or a certified copy of the entire record of the contested case within 30 days after receiving notice from the party filing the petition. Iowa Code § 86.26. Unlike the appeal to the Commissioner, further judicial review is not de novo, and the Iowa courts can look at the entire record but cannot make factual determinations; instead, the courts can only look for errors at law or errors in the decision-making procedure and can apply the facts to the law. Iowa Code § 17A.19; Mycogen Seeds v. Sands, 686 N.W.2d 457 (Iowa 2004).

General Appeal Process – Appeals to Iowa Supreme Court

Following the District Court’s decision for judicial review, an aggrieved party can seek further appeal, pursuant to Iowa’s Administrative Procedure Act. Iowa Code § 17A.20. This means the aggrieved party may file an appeal with the Iowa Supreme Court, which has the option of sending the case to the Iowa Appellate Court for review or the Iowa Supreme Court may take the case directly. If the Iowa Supreme Court sends the case to the Iowa Appellate Court, an aggrieved party can still seek further review from the Iowa Supreme Court after obtaining a final decision from the Iowa Appellate Court.

Scope of Judicial Review and Standard for Review

The Iowa courts are limited by the administrative code as to which issues they may hear on appeal, which specifies that the court shall overturn and remand cases where agency action is:
1.       Unconstitutional on its face or as applied or is based upon a provision of law that is unconstitutional on its face or as applied.
2.       Beyond the authority delegated to the agency by any provision of law or in violation of any provision of law.
3.       Based upon an erroneous interpretation of a provision of law whose interpretation has not clearly been vested by a provision of law in the discretion of the agency.
4.       Based upon a procedure or decision-making process prohibited by law or was taken without following the prescribed procedure or decision-making process.
5.       The product of decision making undertaken by person who was improperly constituted as a decision-making body, was motivated by an improper purpose, or was subject to disqualification.
6.       Based upon a determination of fact clearly vested by a provision of law in the discretion of the agency that is not supported by substantial evidence in the record before the court when that record is viewed as a whole.
7.       The product of reasoning that is so illogical as to render it wholly irrational.
8.       The product of a decision-making process in which the agency did not consider a relevant and important matter relating to the propriety or desirability of the action in question that a rational decision maker in similar circumstances would have considered prior to taking that action.
9.       Not required by law and its negative impact on the private rights affected is so grossly disproportionate to the benefits accruing to the public interest from that action that it must necessarily be deemed to lack any foundation in rational agency policy.
10.       Based upon an irrational, illogical, or wholly unjustifiable interpretation of a provision of law whose interpretation has been clearly vested by a provision of law in the discretion of the agency.
11.       Based upon an irrational, illogical, or wholly unjustifiable application of law to a fact that has been clearly vested by a provision of law in the discretion of the agency.
12.       Otherwise unreasonable, arbitrary, capricious, or an abuse of discretion.

Iowa Code § 17A.19(8).

If a claim of error alleged on appeal is related to the agency’s findings of fact, the standard of review for the court is whether “substantial evidence” supports those findings of fact, and is only overturned if there has been an abuse of the agency’s discretion. Meyer v. IBP, Inc., 710 N.W.2d 213 (Iowa 2006).

An abuse of discretion exists when the exercise of discretion is clearly erroneous or rests on untenable grounds. IBP, Inc. v. Al-Gharib, 604 N.W.2d 621 (Iowa 2000). It is also important to note that evidence is not insubstantial merely because it would have supported contrary inferences. Wal-Mart Stores, Inc. v. Caselman, 657 N.W.2d 493 (Iowa 2003). If the claim of error relates to the agency’s interpretation of the law, the standard of review is whether the agency’s interpretation was erroneous, and the court may substitute its own interpretation of the law for the agency’s. Id. If the claim of error relates to the ultimate conclusion reached by the agency, such as allegations that the agency’s decision was wholly irrational or the agency ignored important and relevant evidence, the court will use an abuse of discretion standard. Id.


General Rule

The Iowa Workers’ Compensation Act provides that parties to a contested claim, or potentially contested claim may enter into a final settlement of the matter. Iowa Code § 85.35(1). There are four settlement variations:

Agreement for Settlement: An Agreement for Settlement is an agreement as to the nature and extent of an employee’s current right to accrued benefits and establishes an employee’s right to future accrual of benefits. Iowa Code § 85.35(2). An Agreement for Settlement keeps an employee’s right to future medical benefits open and such a settlement may be the subject of future litigation, for instance regarding entitlement to additional disability benefits. An Agreement for Settlement provides the employer/insurer with a credit for any future compensable injuries if applicable under the successive disabilities statute, Iowa Code § 85.34(7).

Compromise Settlement: A Compromise Settlement is a full and final disposition of a claim. This agreement bars any right to future benefits. Iowa Code § 85.35(3). Approval by the Commissioner of a Compromise Settlement is binding on all parties and terminates the jurisdiction of the Commissioner. Iowa Code § 85.35(9). Any further claims arising out of the approved settlement are properly brought in district court. White v. Northwestern Bell Telephone Co., 514 N.W.2d 70 (1994). Payments made via a Compromise Settlement are not construed as weekly compensation. Accordingly, a Compromise Settlement waives the employer’s/insurer’s lien rights under Iowa Code § 85.22.

Combination Settlement: A Combination Settlement merges an Agreement for Settlement and a Compromise Settlement. This settlement can establish liability for part of a claim and extinguish liability for other potions of a claim. Iowa Code § 85.35(4).

Contingent Settlement: A Contingent Settlement may be conditioned upon approval by a court, governmental agency or upon an event expected to occur within one year from the settlement date. If approval does not occur, the workers’ compensation commissioner can vacate the settlement upon petition or agreement of the parties. When a contingent settlement is vacated the statute of limitations is tolled from the date of the approval until the date the settlement is vacated. The settlement becomes final if no action is taken to vacate the settlement or to extend the time period for approval within one year from the settlement date. Iowa Code § 85.35(5).

Particular Settlement Requirements

All settlements must be in writing on a form prescribed by the workers’ compensation commissioner. Iowa Code § 85.35(1); see for prescribed forms. The settlement must be submitted to the Commissioner for approval. Iowa Code § 85.35(1). The Commissioner can approve a settlement if substantial evidence exists to support the terms of the settlement; there is a knowing waiver by the employee of the right to a hearing, decision, and statutory benefits; and a showing that the settlement is a reasonable and informed compromise of the parties’ interests. Iowa Code § 85.35(8)(a). If a claimant is represented by an attorney, there is a presumption that the showing for approval has been met. Iowa Code § 85.35(8)(b).

If parties enter into a settlement that closes the employee’s right to future medical benefits, then the parties must consider the interests of the Centers for Medicare & Medicaid Services (CMS). CMS recommends the use of a Workers’ Compensation Medicare Set Aside Arrangement (WCMSA) to protect its interests when applicable. A WCMSA is a financial agreement that allocates settlement proceeds to pay for future medical expenses related to the compromised injury, illness or disease. Those funds must be properly administered and used to pay expenses related to the compromised claim. Only upon depletion of those funds would Medicare pay for treatment related to the compromised injury, illness or disease. CMS will review new WCMSA proposals:
(1) if the employee is a current Medicare beneficiary and the total settlement is greater than $25,000.00; or
(2) if the employee has a reasonable expectation of Medicare enrollment within 30 months from the settlement date and the anticipated total settlement (including future medical expenses and payment for disability) is greater than $250,000.00. Submission to CMS for approval of a WCMSA if voluntary.


A commutation is a present value lump sum payment of future benefits. Iowa Code §§ 85.45; 85.47. The Iowa Workers’ Compensation Act provides for two types of commutations:

Full Commutation: A full commutation pays all remaining future benefits in one lump sum payment. It extinguishes an employee’s right to any additional benefits. Iowa Code § 85.45.

Partial Commutation: A partial commutation is a lump sum payment of a portion of an employee’s remaining future benefits. It does not end an employee’s right to additional benefits. Iowa Code § 85.48.

Particular Commutation Requirements

Commutation of future payments is authorized only where the period of compensation can be definitely determined. Iowa Code § 85.45(1). For example, indefinite or future contingent obligations for medical services cannot be definitely determined, and are therefore not subject to commutation. Diamond v. Parsons Co.,129 N.W.2d 608 (1964). Furthermore, it must be determined that commutation is in the best interest of the person(s) entitled to the compensation or if periodic payments will require undue expense, hardship, or inconvenience for the employer. Iowa Code § 85.45(1). Additional form and filing requirements must also be met before a commutation will be approved. Rule 876 IAC 6.2(85,86).

In evaluating the best interest of a person(s) entitled to compensation, it is proper to consider personal, family, and financial circumstances, reasonableness of plans for using lump-sum proceeds, the employee’s preference and benefits to the employee of receiving the lump-sum payment weighed against potential detriments that would result if the employee invested unwisely, spent foolishly, or wasted funds. Dameron v. Neumann Bros., Inc., 339 N.W.2d 160 (1983).

If the recipient of commuted benefits is a minor or a dependent, benefits may be paid to a trustee. Iowa Code § 85.49. If the person seeking commutation is a surviving spouse, an employee with a permanent and total disability or a dependent who is mentally and physically incapacitated from earning, the commuted future payments shall not exceed the number of weeks suggested by probability tables designated by the commissioner for death and remarriage. Iowa Code § 85.45(d).

Commutation provisions do not apply to benefits payable under the Second Injury Compensation Act. McKee v. Second Injury Fund of Iowa, 378 N.W.2d 920 (1985).

Dispute Resolution

Informal dispute resolution procedures are available prior to the initiation of a contested case proceeding. Rule 876 IAC 10.1. Informal procedures may also be pursued before or after a first report of injury has been filed. Id. Documentation regarding a claim may be submitted by the parties or requested by the commissioner. Id. Engaging in informal dispute resolution procedures will not toll the statute of limitations for filing an original notice and petition. Rule 876 IAC 10.1(3). The workers’ compensation commissioner has the power to impose sanctions during informal dispute resolution procedures. Rule 876 IAC 10.1(5).

Once a contested case proceeding has been filed, the worker’s compensation commissioner or their designee can require parties to participate in dispute resolution. Rule 876 IAC 4.40; 4.40(1). Parties may also voluntarily agree to participate in dispute resolution. Rule 876 IAC 4.40(2). Although the commissioner has the power to impose sanctions and require conduct by the parties, no contested case can be finally resolved via dispute resolution without the consent of the parties. Id.

Before parties may pursue dispute resolution procedures, they must make a good faith effort to resolve their dispute. Rule 876 IAC 10.1(4); 4.40(3). Filing a professional statement signed by all parties and their representatives attesting to their good faith attempts to settle the dispute satisfies this requirement. Rule 876 IAC 10.1(4).


General Rule

Employers must obtain workers' compensation insurance through an insurance company approved by the commissioner of insurance or qualify as a self-insured employer. Iowa Code § 87.1), 87.11; Op.Atty.Gen., 1918, p. 262. To verify an Iowa employer’s workers’ compensation coverage, visit


Only employers subject to the provisions of the Workers’ Compensation Act are required to provide workers’ compensation liability coverage. Op.Atty.Gen., 1918, p. 197. Iowa law provides that certain specified employees and their employers are exempt from liability coverage. Refer to Section I of the outline for specific guidance on exemptions as well as Iowa Code §§ 85.1;87.22; 87.23.

Particular Requirements

Any contract whereby an employee is required to pay premiums for compensation insurance shall be null and void. Iowa Code § 85.54. Further, no insurance policy shall contain any provision relieving the insurer from payment in the event of insolvency or bankruptcy, or if any part of the compensation is unpaid. Iowa Code § 87.8. Every insurance policy regarding the payment of compensation shall contain language stating that an insured’s notice and knowledge of injury or death is notice and knowledge on the part of the insurer. Iowa Code § 87.10. The insurer is bound by every agreement, adjudication, award or judgment rendered against the insured. Iowa Code § 87.10. Finally, every employer shall on demand of the workers’ compensation commissioner exhibit evidence of compliance with this chapter. Iowa Code § 87.1.

Self-Insured Employer

To qualify as a self-insured employer, it is necessary to assume a recognized status under the Workers’ Compensation Act as an insurer. Reedy v. White Consol. Indus., Inc., 503 N.W.2d 601, 603 (1993).

Under Iowa Code § 87.4, “groups of employers by themselves or in an association with any or all of their workers, may form insurance associations.” Bremer v. Wallace, 728 N.W.2d 803, 805 (2007). These associations must submit a plan to the insurance commissioner for approval. Id. Approval is conditioned upon meeting rigorous financial requirements pursuant to Rule 191 IAC 56.3(87,505). Once the insurance commissioner has issued a certificate of approval, the self-insurance association is authorized to provide workers' compensation benefits. Iowa Code § 87.6; Bremer v. Wallace, 728 N.W.2d 803, 805 (Iowa 2007). Thereafter, the self-insurance association is subject to the continuing supervision of the insurance commissioner. Id; Iowa Code § 87.11 . The commissioner may terminate a plan on reasonable notice if it appears that the plan is not fairly administered, there is a threat of insolvency or for any reason the plan fails to accomplish the objectives of the chapter. Iowa Code § 87.7. To determine the status of a self-insured Iowa employer visit

A self-insured program established by an association of cities, counties or both or by an association of Iowa fairs or community colleges, or other political subdivisions are not subject to regulation under Iowa Code Chapter 87. Iowa Code § 87.4. Such an association is not required to submit its plan or program to the commissioner for review and approval of the plan, and is not subject to rules or rates adopted by the commissioner. Id.

Failure to Comply

If a violation of the mandatory insurance law has been committed or is anticipated, an action may be brought to enjoin such person from committing the violation and an injunction shall be issued without bond if warranted. Iowa Code § 87.15.

Upon notice to the workers' compensation Commissioner of an employer failing to comply with this chapter, the Commissioner shall notify the employer by certified mail that legal proceedings will be brought to enforce compliance. Iowa Code § 87.19. An employer has 15 days after such notice to comply, or the workers' compensation Commissioner shall report the failure to the attorney general, who shall bring an action to enjoin further violation. Id. Upon issuance of a temporary or permanent injunction, a violation shall be a contempt of court and punished as provided for contempt of court in other cases. Id.

Damages by Action at Law

Criminal and civil penalties can be imposed on employers who violate this portion of the Compensation Liability Insurance Act. A person who willfully and knowingly violates 87.14A by engaging in business without first obtaining workers’ compensation insurance is guilty of a class “D” felony. Iowa Code § 87.14A.

Employers who operate without insurance lose the exclusive remedy protection of the Act and are liable to the employee for the full measure of damages available under common law, or may collect compensation as provided under Iowa’s compensation law. Iowa Code §§ 87.21 ; Van Gorkom v. O'Connell, 206 N.W. 637 (1925). Upon an action by an employee for damages, it shall be presumed that the injury to the employee was the direct result of the negligence of the employer and such negligence was the proximate cause of the injury. Id. The burden of proof rests on the employer to rebut the presumption of negligence. Id. The employer is not permitted to rely upon any defenses of contributory negligence, assumption of risk or the fellow servant rule. Casey v. Hansen, 26 N.W.2d 50 (1947).

A workers’ compensation insurer should be made a defendant in proceedings to avoid potential due process violations. Op.Atty.Gen., 1919-20, p. 210.

It is further illegal for any person to make or cause to be made any statement of material fact that is false or misleading in any document filed with the commissioner of insurance. Iowa Code § 87.11E. The commissioner of insurance may impose a civil penalty for violation of this section and a person who willfully and knowingly violates this section is guilty of a class “D” Finally, any employer withholding the wages of an employee for the purpose of paying workers compensation insurance premiums may be guilty of a simple misdemeanor. Iowa Code § 85.54 .

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