November 03, 2022
When it comes to Indiana Payroll Law, businesses need to primarily focus on managing compliance with the following things:
Indiana minimum wage is currently $7.25 per hour, equivalent to the federal minimum wage outlined in the Fair Labor Standards Act (FLSA). Indiana does have special wage laws for specific employees, so it is important to be aware of whether or not these regulations apply to your business.
Employers are allowed to pay employees who receive tips a wage of $2.13 per hour. However, an employee's wages and tips must equal or exceed what they would have been paid working "X" many hours for $7.25 per hour. If not, the employer must make up the difference.
Employers may also pay any employees, under the age of 20, $4.25 per hour for the first 90 consecutive days of employment.
Employees in Indiana are entitled to overtime pay of 1.5 times their normal hourly rate for all hours worked over 40 in a week. Most employers in Indiana are covered under the FLSA in regard to overtime. Those that aren't may still be covered under Indiana minimum wage law.
Generally, employers may make the following deductions from wages in Indiana:
In order to make a deduction from an employee's wages in Indiana, an employer must also ensure that there is an agreement with the employee, in writing, and signed by the employee and employer. The agreement must be revocable as well and delivered to the employer within ten days of its execution.
Upon termination, employers in Indiana must pay employees on the next regularly scheduled payday. Indiana does not have any laws regarding the payment of unused benefits.
Indiana employers generally need to pay wages to employees at least semi-monthly. Employers may pay employees biweekly if the employee requests. Lastly, all wage payments within ten business days of a pay period.
Employers in Indiana that are struggling with processing payroll on their own may want to consider reaching out to an Indiana payroll provider for help. To learn more about our Indiana payroll solution, contact us today.