Employers in Indiana must ensure compliance with a standard set of labor laws and employment legislation. Proper compliance with Indiana labor laws will span federal legislation and regulations as well as those specifically issued by the State of Indiana.
This article will help guide Indiana employers through state compliance. However, for additional assistance, employers should consider contacting an Indiana Payroll & HR company for help.
Businesses in Indiana must maintain compliance with several different labor law areas including:
While some areas are governed by federal law more than others, it is important for Indiana employers to know which areas have state laws, and which defer to federal.
Indiana employers have two primary responsibilities to keep in mind when it comes to hiring new employees. These are new hire reporting and arrests and convictions.
Indiana requires private employers to submit information regarding newly hired employees, as well as certain employees who are returning to work, to the Indiana New Hire Reporting Center.
Generally, Indiana employers must submit the following information within 20 days of the date of hire or reemployment:
Employers can report new hires through the Indiana New Hire Reporting Center or may create their own electronic new hire reports as long the required information is included.
Alternatively, employers can submit one of the following paper reports:
Indiana private employers need to be aware of the rules and regulations regarding arrest and conviction records, and access to them.
Generally, employers in Indiana are prohibited from using arrest and conviction records for the following:
To request a criminal records check, employers should contact the Indiana State Police Department's Central Records Division. Or contact an Indiana HR company for help with background checks and compliance.
One of the larger areas of compliance for employers throughout the state, Indiana wage and hour laws cover the following topics:
Employers need to be aware of these requirements in order to successfully process Indiana payroll.
Currently, Indiana minimum wage is $7.25 per hour, the same as the federal minimum wage.
Indiana also has a minimum wage for tipped employees of $2.13 per hour. However, if the tips paid to the employee plus the wage do not equal the minimum wage, then the employer must make up the difference.
Indiana also allows for a training wage of $4.25 per hour. It can be used for employees under the age of 20 only, and only for the first 90 consecutive calendar days of employment.
Employees are entitled to overtime pay of 1.5 times their normal hourly rate for all hours worked over 40 in a week. Generally, most Indiana employees are covered by the overtime provisions of the Fair Labor Standards Act (FLSA), however, those not covered under federal law may still be covered by the Indiana Minimum Wage Law.
Generally, employers may make the following deductions from wages in Indiana:
In order to make a deduction, employers must also ensure that the agreement for the deduction is in writing, signed by the employee, by its terms revocable at any time by the employee upon written notice, and agreed to in writing by the employer.
A copy of the deduction agreement must be delivered to the employer within ten days of its execution as well.
Indiana rules regarding final pay require that employees receive final pay on the next regularly scheduled payday.
However, Indiana has no laws regarding the payment of unused benefits. That said, employers should follow any written or oral company policies that may require them to do so.
Employers in Indiana are generally required to pay wages to employees at least semi-monthly, or bi-weekly if requested by an employee, and must make wage payments within 10 business days of a pay period.
Indiana does not require private employers to provide employees with meal or rest breaks. However, there are some exceptions for minors.
Child labor can be one of the trickiest areas of labor law compliance, as there are several federal and state laws protecting employed minors. Where the two intersect, the law providing the most protection applies.
Employers in Indiana with five or more minor employees must use the Indiana Youth Employment System (YES) to track and report minor-employee information.
However, any work permits that were issued for minor employees before July 1st, 2021 (the creation of YES) must be kept for two years (July 1st, 2023 latest).
Indiana employers need to be aware of restrictions for minors on the following items:
Restrictions may also vary depending on the age of the minor.
Indiana has no laws regarding employee benefits or the continuation of benefits. However, employers with 20 or more employees may be subject to federal COBRA law.
While some states may have an overly-complicated set of leave laws across multiple localities, Indiana Leave Laws only generally cover the following types of employee absence or leave:
Important to note as well is Indiana currently has no comprehensive paid leave law, meaning that paid time off (PTO) is not required in Indiana. Keep in mind that even though PTO is not required, employers still must adhere to the policies included in the employee handbook that's provided to employees.
While Indiana does not require paid Jury Duty Leave, it does prohibit employers from taking adverse action against an employee for serving jury duty.
Employers are required to give employees unpaid time off for jury duty service. However, employees must notify the employer of the jury summons within a reasonable period after he or she has received the summon.
Employers also may not require an employee to use any type of accrued leave for time spent on a jury.
Indiana employers may not discipline an employee who is a Civil Air Patrol member for being absent from or leaving work to engage in an emergency service operation that began:
An employer may not discipline an employee who is a volunteer firefighter or member of a volunteer medical services association for being absent from or leaving work due to:
Indiana has no comprehensive family and medical leave law requiring private employers to provide leave rights greater than those required by the federal Family and Medical Leave Act (FMLA). However, companies throughout Indiana must STILL comply with FMLA laws.
Indiana Military Leave applies to employers with at least 50 employees. Under the law, employers must grant eligible employees up to 10 days of unpaid leave per calendar year during one or more of the following periods:
Eligible employees include:
Indiana is one of many states that has an Occupational Safety and Health Administration (OSHA)-approved job safety and health program. States with such a program operate it themselves rather than states without one, which are subject to federal OSHA.
The Indiana Occupational Safety and Health Administration (IOSHA) covers most private-sector employers in the state. The U.S. Occupational Safety and Health Administration (OSHA) has jurisdiction over certain employers not covered by IOSHA.
IOSHA generally adopts the same standards as federal OSHA, with a few local emphasis programs, or in other words unique areas of OSHA compliance for Indiana.
Indiana’s Smoke Free-Air Law prohibits smoking in the following places:
Exceptions include:
Indiana employers should be aware of which category their business falls under, and the standards that apply.
Indiana employers are subject to federal discrimination laws as well as the guidelines, standards, and protections put into place by the Indiana Civil Rights Commission.
According to Indiana discrimination law, employers with 6 or more employees may not discriminate against an employee or potential new hire as a result of:
Anyone who feels that their rights under Indiana discrimination law have been violated must file a complaint within 180 days of the discriminatory act.
Aside from employers with less than 6 employees, there are some business and employee types who are exempt from Indiana discrimination protections.
Employees who are exempt from Indiana Law include:
Businesses that are exempt from Indiana Law include:
Workers' compensation provides benefits to employees who are injured on the job, or otherwise are unable to work due to a workplace accident or incident.
Generally, employers in Indiana need to be aware of the following rules regarding workers' compensation:
Employers can find more information regarding Indiana workers’ compensation on the Worker's Compensation Board of Indiana website.
Indiana Unemployment is funded via employer contributions rather than a tax on employee payroll. The program pays benefits to workers who are unemployed through no fault of their own.
When it comes to employer responsibilities, Indiana employers can use the new Uplink Insurance System Portal for things such as:
To become an employer in Indiana, employers can find registration requirements within the tax and unemployment registrations by state list.
Like employers in any state, the list of posting and recordkeeping requirements is not short for Indiana employers.
Employers struggling with posting compliance may want to consider a labor law poster subscription service that provides updates whenever labor laws change.
Indiana employers are required to keep records for the following things:
The following posters are required for all employers in Indiana:
Operating a business in any state while maintaining proper compliance can be a challenge, and while Indiana may have fewer regulations than some states, it is no different.
Businesses and employers in Indiana that are struggling to maintain proper compliance may want to consider reaching out to an Indiana HR and payroll provider for help. Solutions such as payroll software and HR consulting services can be of great benefit for employers struggling with streamlining back office processes and Indiana business compliance.
If you are in need of an Indiana payroll and HR company in your area, contact us or get connected with a provider today.