Indiana labor laws set a $7.25 minimum wage, require overtime past 40 hours in a week, give workers a right to be paid at least semimonthly, allow either side to end most jobs at any time, and add state-specific protections on discrimination, workplace injuries, and youth employment. The rules below cover what workers and employers in the state most often need to know.
Minimum Wage and Overtime
Indiana’s minimum wage is tied directly to the federal rate under IC 22-2-2-4. Instead of fixing a dollar amount, the statute requires employers with two or more employees to pay at least the federal minimum, currently $7.25 per hour.1Indiana General Assembly. Indiana Code 22-2-2-4 – Rates; Discrimination If Congress raises the federal rate, Indiana’s floor rises with it automatically.
The same statute sets Indiana’s overtime rule. Employers cannot work an employee more than 40 hours in a workweek without paying at least one and a half times the regular rate for the extra hours.1Indiana General Assembly. Indiana Code 22-2-2-4 – Rates; Discrimination Executive, administrative, and professional employees are generally exempt, following the same categories used under the federal Fair Labor Standards Act.
Tipped Workers
Tipped employees can be paid a direct cash wage as low as $2.13 per hour, as long as their tips bring them up to the full $7.25 minimum. The gap, called a tip credit, maxes out at $5.12 per hour.2U.S. Department of Labor. Fact Sheet #15: Tipped Employees Under the Fair Labor Standards Act If tips plus cash wages come up short in any workweek, the employer has to cover the difference. Indiana follows the federal tipped-wage framework without adding state requirements.3U.S. Department of Labor. Minimum Wages for Tipped Employees
Paydays, Final Checks, and Deductions
Employers must pay workers at least semimonthly. If an employee asks in writing for biweekly pay, the employer has to honor the request.4Indiana General Assembly. Indiana Code 22-2-5-1 Weekly or more frequent schedules are fine; monthly is not, unless the biweekly option is available on request.5Indiana Department of Labor. Indiana Department of Labor Knowledge Base
When a worker leaves, whether by quitting or being fired, the final paycheck is due by the next regularly scheduled payday. Under IC 22-2-5-2, an employer who misses that deadline owes the unpaid wages. If a court finds the employer was not acting in good faith, it will order liquidated damages equal to twice the unpaid wages on top of what was owed, plus attorney’s fees.6Indiana General Assembly. Indiana Code 22-2-5-2 – Failure to Pay; Damages That turns a stalled paycheck into a tripled payout.
What Can Be Deducted
Employers cannot withhold money from a paycheck unless the deduction falls into one of the categories listed in IC 22-2-6-2. Allowed items include insurance premiums, union dues, uniform costs capped at the employer’s actual vendor cost, charitable contributions, and repayment of payroll advances.7Indiana General Assembly. Indiana Code 22-2-6-2 – Assignment of Wages; Requisites Every deduction needs a written authorization signed by the employee, and the employee can revoke it at any time with written notice. Without a valid signed agreement, the deduction is illegal.
At-Will Employment and Its Limits
Indiana is an at-will state. Either side can end the working relationship at any time, for any reason that is not itself illegal, with no advance notice required. The rule applies to any worker without a written contract or collective bargaining agreement saying otherwise.
There is a narrow public policy exception. In Frampton v. Central Indiana Gas Co., the Indiana Supreme Court held that an employer cannot fire a worker for exercising a legal right, such as filing a workers’ compensation claim.8Justia. Frampton v. Central Indiana Gas Company Outside that exception and the federal and state anti-discrimination laws, at-will remains the default.
Discrimination Protections
The Indiana Civil Rights Act, at IC 22-9-1, bars employment discrimination based on race, religion, color, sex, disability, national origin, ancestry, or status as a veteran.9Indiana General Assembly. Indiana Code 22-9-1-3 It covers state government and any private employer with six or more employees. Nonprofits organized exclusively for religious or fraternal purposes, church-affiliated educational institutions, and nonprofit social clubs are exempt.
Complaints go to the Indiana Civil Rights Commission. The protected categories overlap heavily with federal Title VII, but Indiana adds ancestry and veteran status, and the six-employee threshold is lower than the 15-employee minimum for Title VII. Smaller Indiana employers can therefore be on the hook under state law even when federal law would not reach them.
Breaks and Meal Periods
Indiana has no state law requiring rest breaks or meal periods for adult workers. None.10IN.gov. Is There Any Information Regarding Indiana Lunch or Breaks Laws? Breaks are a matter of employer policy. Workers under 18 are the exception: minors scheduled for six or more consecutive hours must get breaks totaling 30 minutes.11Indiana Department of Labor. Teen Work Hours
Federal rules fill some of the gap. Short breaks of about 5 to 20 minutes, when an employer offers them, count as paid time.12eCFR. 29 CFR 785.18 – Rest A meal period of 30 minutes or longer can be unpaid, but only if the worker is completely relieved of duties. If you handle any work tasks while eating, the whole period has to be paid.
Workers’ Compensation
Nearly every Indiana employer has to carry workers’ compensation insurance for on-the-job injuries and deaths. Under IC 22-3-2-2, both sides are bound by the system: employees give up the right to sue in exchange for guaranteed benefits regardless of fault.13Indiana General Assembly. Indiana Code 22-3-2-2 Employers either buy coverage from an authorized carrier or prove to the Worker’s Compensation Board they can pay claims directly.
A handful of workers fall outside the system: farm laborers, railroad employees in train service, independent contractors as classified by the IRS, and certain municipal firefighters and police officers covered by pension funds. Everyone else is covered. Employers who skip required coverage face penalties and personal liability for the full cost of any workplace injury.
Workplace Safety Reporting
Workplace safety in Indiana is enforced by the Indiana Occupational Safety and Health Administration (IOSHA), part of the state Department of Labor. The standards largely track federal OSHA, but reporting goes through the state.
Every Indiana employer, regardless of size, must report:
- Fatalities, within 8 hours
- Hospitalizations, within 24 hours
- Amputations, within 24 hours
- Loss of an eye, within 24 hours
The reporting duty applies even to businesses otherwise exempt from keeping OSHA injury logs. A hospitalization only triggers the report when the employee is actually admitted for inpatient treatment, not held for observation.14Indiana Department of Labor. Recordkeeping and Reporting IOSHA inspectors can issue citations carrying civil penalties of up to $7,000 per serious violation, with higher amounts for willful or repeated conduct.15Indiana General Assembly. Indiana Code 22-8-1.1-27.1 – Civil Penalties
Unemployment Benefits
Workers who lose a job through no fault of their own can apply for unemployment through the Indiana Department of Workforce Development. Eligibility turns on wages earned during the base period, defined as the first four of the last five completed calendar quarters before the claim date. Total base-period wages must be at least one and a half times the highest single quarter’s earnings, and must total at least $4,200, with at least $2,500 earned in the last six months of the base period.16Indiana Department of Workforce Development. What to Expect When a Former Employee Files a Claim
The maximum weekly benefit is $390.17Indiana Department of Workforce Development. Unemployment Insurance FAQ Your actual weekly amount and the number of weeks you qualify for depend on your earnings record. After filing, you receive a Monetary Determination letter stating the specific benefit amount and duration. The benefit year runs 52 weeks from the filing date, with most claimants drawing payments for a shorter window inside it.
Workers Under 18
Indiana regulates workers aged 14 through 17 under IC 22-2-18.1. Children under 14 generally cannot hold a paying job, with narrow exceptions for farm work, domestic service, and golf caddying.18Indiana General Assembly. Indiana Code 22-2-18.1-12 – Employment Limitations and Prohibitions for Certain Minors; Exceptions
Hour Limits by Age
Workers aged 14 and 15 face tight restrictions: no more than 3 hours on a school day, 18 hours during a school week, and work until no later than 9:00 p.m. on any day between June 1 and Labor Day. Workers aged 16 and 17 can now work the same hours and days as adults under recent changes, with no parental permission required for longer or later shifts.19Indiana Department of Labor. Changes to Youth Employment Laws
No minor, regardless of age, can work in a job classified as hazardous. Prohibited work includes power-driven machinery, roofing, and exposure to radioactive materials, under both state and federal law.
Youth Employment System
Indiana has done away with paper work permits. Employers with five or more workers aged 14 to 17 must now register those employees through the state’s Youth Employment System (YES), the online tracking tool mandated by IC 22-2-18.1-26.20Indiana Department of Labor. Youth Employment System (YES) Employers with fewer minor employees can use the system voluntarily. When a minor’s employment ends, the employer has to remove them. Penalties for failing to register, failing to remove a terminated minor, or submitting inaccurate numbers run from $100 to $400 per violation.
Required Workplace Posters
Indiana employers must display several labor law posters where workers can see them. The Indiana Department of Labor requires notices on IOSHA, the state minimum wage, and teen work hours. The Department of Workforce Development requires an unemployment insurance poster, and the Worker’s Compensation Board and the Indiana Civil Rights Commission each require their own.21Indiana Department of Workforce Development. Required Employer Posters Neither state nor federal law requires translated versions, though employers with non-English-speaking staff are encouraged to post them.