Mastering the Indiana Wage Landscape: Minimum, Tipped, and Overtime Rates

If you’re an employer in Indiana, it’s important to understand Indiana Minimum Wage and how it applies to your employees. According to Indiana wage laws, not all Indiana employers are required to pay their employees the minimum wage, and not all people in Indiana are required to work for minimum wage.

It’s important to follow all labor laws to protect your employees and business.

What Is Indiana Minimum Wage?

Indiana’s minimum wage is set at the federal minimum wage level, of $7.25. This wage level has been in effect since July 24, 2009. This means that employees subject to minimum wage must earn $7.25 per hour for the first 40 hours they work each week.

Does Anyone Earn Below Minimum Wage?

Below is a list of positions in Indiana exempt from minimum wage requirements, which may lead to some people earning below minimum wage;

  • Outdoor salespeople
  • Employees who earn wages based on commission
  • Minors below the age 16
  • Employees working for close family members
  • Anyone working for a religious order where they are a member of that religion
  • Student nurses and resident medical doctors
  • Executives working for more than $150 per week
  • Agricultural labor workers

To see a full list of exemptions and explanations of the minimum wage exemptions, see the Indiana General Assembly website.

What Is a “Training Wage”?

training wage, also known as subminimum wage, is a wage of $4.25 per hour. This wage can only be paid to employees under 20 years of age for the first 90 days of employment.

What Is a “Tipped Employee” and How Much Do They Earn?

tipped employee is defined by the US Department of Labor as someone who regularly earns more than $30 each month in tips. Tipped employee regulations for Indiana state that tipped employees earn $2.13 each hour. This amount is the same as the federal tipped employee wage.

If an employee’s total earnings (wages and tips combined) amounts to less than the minimum wage of $7.25 per hour, their employer must cover the difference. As an employer, if you have tipped employees, you’re responsible for tracking their total wages.

How Much Is Overtime and What Are the Exceptions?

Overtime pay rules Indiana state that if you are an employer that is exempt from the federal Fair Labor Standards Act, you must pay at least 1.5 times the regular rate of pay when an employee works 40 hours in a work week. All tipped employees must receive at least $9.83 per hour for all hours worked over 40 in the work week.

When Are Employees Paid?

Wage and hour compliance rules state that employees are required to be paid wages at least twice monthly. Paydays should occur no later than 10 days after the end of the pay period when wages are due. The exception to this is for employees under 18.

If an employee is working longer than 6 hours at a time, they must be given at least one or two breaks. Those breaks must total at least 30 minutes.

When Is the Final Paycheck Provided?

Once an employee leaves or the employment relationship ends, employers are required to pay their employee by the next regularly scheduled payday. If you’re unaware of where the employee is and is unable to pay the employee. As a result, you must pay the employee within 10 days after they make a demand for final wages or when you receive an address where the final earnings can be mailed.

Is It Required to Provide Employees With Breaks?

Indiana follows federal laws around breaks during the workday. These laws do not require employers to provide employees rest periods or meal breaks. If a break is offered, the employer must pay for any break that is less than 20 minutes long.

Where Can I Learn More?

If you have questions about Indiana Labor Laws, more information and resources can be found on Indiana Department of Labor website. They offer a number of employer posters that offer useful information on minimum wage.

Working with a knowledgeable and reputable payroll service is one of the best things you can do to stay in compliance. At ASAP Payroll service, we offer accurate and timely payroll service for employers in a range of industries. We have all the knowledge you need to stay in compliance with Indiana Labor Laws. Reach out today to get started with our payroll solutions. Call us at 317-887-2727 or visit our website

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