I recently took a job as a bookkeeper for a Web design firm in Iowa.
Our paychecks are bouncing. We are in our second round in 30 days. First, I am of course quickly looking for a new job. But in the mean time what can I and other employees leagally do?
I don't believe we can quit, and recieve unemployment, so we are trapped working for "bad checks" until we each find new jobs.
Any legal advise. One thing I do know is that company moral is completely gone.

Tou may file a wage claim with the Iowa Division of Labor or, if you prefer, you may contact the U.S. Department of Labor, Wage & Hour offices. The Iowa telephone numbers are:

Des Moines (515) 284-4625
Cedar Rapids (319) 362-8074
Davenport (563) 324-2038
Sioux City (712) 252-2907
Waterloo (319) 233-2903

Per Iowa Administration Code 871 chapter 24. Bouncing paychecks and trouble being paid are a good cause to quit attributal to an employer and would allow you to receive unemployment. It is always best to first put an employer on notice that you plan to quit if the problem is not corrected and then if the problem happens again you have to make a decision and go with it.

You replied to an old thread from 2005. I think the poster has taken care of their problem by now. ;)