Accrued vacation pay is considered compensation in Indiana. Therefore, an employer may need to pay a pro rata share of the employee’s vacation time upon termination. However, if the employer has a policy or employment contract that specifies certain conditions for paying out accrued vacation time, the employee must meet those conditions to receive the pay. These policies are at the employer’s discretion.
Indiana Labor Laws
Indiana Minimum Wage
The minimum wage in Indiana is $7.25 per hour, matching the federal requirement. According to both the Indiana Minimum Wage Law and the Fair Labor Standards Act, employees must be compensated for all hours worked.
Employers can pay a training wage of $4.25 per hour, but this rate is applicable only under specific conditions:
- The employee must be under the age of 20.
- The training wage is valid only during the first 90 days of employment.
Indiana Labor Law Posters
Simplify labor law compliance and make workplace policies visible with J. J. Keller state and federal labor law posters.
History of Indiana Labor Laws
The minimum wage in Indiana has been set at $7.25 per hour since July 24, 2009. Before this date, the rate was $6.55 per hour.
Municipality Minimum Wage Laws
Since 2011, a state law in Indiana has prohibited localities from setting minimum wage rates higher than the state rate.
Indiana Minimum Wage Exemptions
Under the Indiana Minimum Wage Law, certain exemptions apply. These include:
- Individuals under 16 years old.
- Those engaged in an independently established trade, occupation, profession, or business, free from control or direction under a contract of service.
- Individuals performing services outside the employing unit’s trade or business.
- Commission-based employees.
- Individuals employed by their own parent, spouse, or child.
- Members of religious orders performing services for the order, ordained or licensed ministers, priests, rabbis, sextons, Christian Science readers, and volunteers for religious or charitable organizations.
- Student nurses employed by hospitals or nursing schools while enrolled and attending classes, or students working for licensed funeral directors and embalmers as part of their apprenticeship.
- Medical school graduates employed as interns or resident physicians by accredited hospitals.
- Students working for the school, college, or university they attend.
- Individuals with physical or mental disabilities working for nonprofit organizations focused on employment or rehabilitation.
- Insurance producers, solicitors, and outside salespeople paid solely by commission.
- Individuals working for charitable, religious, or educational nonprofit organizations in camping, recreational, or guidance facilities.
- Certain agricultural laborers.
- Executive, administrative, or professional employees with hiring or firing authority earning $150 or more per week, and outside salespeople.
- Individuals not employed for more than four weeks in any four consecutive three-month periods.
- Certain transportation employees.
- Direct sellers.
Indiana Posting Requirements
Required posters:
- Minimum Wage
- Child Labor
- WIA Equal Opportunity
- Fair Employment
- Safety and Health Protection on the Job (IOSHA)
- Unemployment Insurance
- Workers' Compensation
- No Smoking
Tipped Wage in Indiana
Businesses must pay tipped employees a base hourly wage of $2.13. If this amount, combined with tips, doesn’t reach the minimum wage, the employer must cover the difference.
A “tipped employee” is defined as someone who regularly earns more than $30 a month in tips.
Overtime Wage in Indiana
Under the Indiana Minimum Wage Law, employers must pay employees at least one-and-a-half times their regular rate of pay for any hours worked over 40 in a workweek. The same exemptions that apply to the minimum wage also apply to overtime.
Child Labor Laws in Indiana
In Indiana, the work hour restrictions for minors are as follows:
For 14- and 15-year-olds:
- 3 hours per school day
- 8 hours per non-school day
- 18 hours per school week
- 40 hours per non-school week
- They cannot work before 7 a.m. or after 7 p.m. (Exception: From June 1 through Labor Day, they can work until 9 p.m. on nights that don’t precede school days.)
- They cannot work during normal school hours.
For 16- and 17-year-olds:
- 9 hours per day
- 40 hours per school week
- 48 hours per non-school week
- 6 days per week
- They cannot work before 6 a.m.
- On school nights, they cannot work after 10 p.m. (or 11 p.m. with parental permission).
- There is no end-of-day cut-off on non-school nights, but they cannot work in an establishment open to the public after 10 p.m. or before 6 a.m. unless another employee who is at least 18 years old is also working.
Employer Recordkeeping Requirements in Indiana
Employers in Indiana must adhere to federal recordkeeping requirements, which include preserving payroll records for at least three years and timekeeping records for at least two years.
Here are the basic records that must be maintained for nonexempt employees under federal law:
- Employee’s full name and Social Security number
- Address, including zip code
- Birth date, if younger than 19
- Sex and occupation
- Time and day of week when the employee’s workweek begins
- Hours worked each day
- Total hours worked each workweek
- Basis on which the employee’s wages are paid
- Regular hourly pay rate
- Total daily or weekly straight-time earnings
- Total overtime earnings for the workweek
- All additions to or deductions from the employee’s wages
- Total wages paid each pay period
- Date of payment and the pay period covered by the payment
Indiana Labor Law Questions & Answers
Yes, employers with two or more employees must comply with the Indiana Minimum Wage Law, which requires a minimum wage of $7.25 per hour.
Ages 14-15:
- 3 hours on a school day
- 8 hours on a non-school day
- 18 hours during a school week
- 40 hours during a non-school week
Ages 16-17:
- 9 hours per day
- 40 hours during a school week
- 48 hours during a non-school week
Yes, employers in Indiana can require overtime unless a collective bargaining agreement or contract states otherwise. There is no state law on the amount of notice required or the number of hours in a shift, but certain industries like transportation may have safety regulations. Employers must pay time-and-a-half for hours exceeding 40 in a workweek.
No, Indiana law does not require employers to provide meal or other breaks to adult employees. However, employees under 18 who work six or more hours in a shift must receive one or two breaks totaling at least 30 minutes. Employers can decide when these breaks occur and must document all breaks provided to minors.
Indiana Labor Law Posters
Simplify labor law compliance and make workplace policies visible with J. J. Keller state and federal labor law posters.