Indiana has several state-specific labor laws that are different from those outlined in FALSA (Fair Labor Standards Act). These laws are applicable only when they offer greater protections or rights than federal laws. A worker will go with the law that’s more favorable to them. Most of the time, Indiana employees find the federal level’s wage and hour laws advantageous.
Minimum Wage in Indiana
The minimum wage law in Indiana requires most employees within the state to earn at least $7.25. This is the same rate outlined in the federal laws and may cover a section of workers exempted by FLSA. According to the state law, workers aged 19 or younger are entitled to a training wage of $4.25 per hour within their first 90 days at work.
The minimum wage also covers tipped workers, and employers are required to grant them an hourly base rate of $2.13. If a combination of this amount and what they earn in tips doesn’t reach the $7.25 per hour threshold, you, the employer, will make up the difference.
Notably, you don’t have to raise your staff’s hourly rate unless the contract requires you to do so or there’s a change in the federal or state minimum wage laws.
Exceptions for The Minimum Wage
Minimum wage laws have several specific excerptions. Professional, administrative, and executive workers get a salary, so they are exempt from the regulations. However, this applies to those who earn at least $455 per week. Other great examples include hospital interns, student nurses, some agricultural workers, and minors aged 15 and below.
Overtime in Indiana
Indiana state laws grant most hourly workers the right to a special rate for their overtime pay for the hours beyond 40 hours per week. The Fair Labor Standards Act defines this as any seven successive workdays.
In most states, the laws outline a daily overtime limit that requires employers to provide overtime pay for employees who have worked for more than the stated limit. However, regulations regarding overtime in Indiana don’t specify a daily limit.
Indiana’s Overtime Minimum Wage
The minimum wage for overtime in Indiana is usually one and a half times the amount the worker earns as their standard hourly wage. Based on the minimum wage rate of $7.25 for every regular hour worked, the minimum amount an employee makes per hour as overtime pay should be $10.88. Any amount beyond the minimum hourly wage should be multiplied by 1.5.
Notably, the state laws have special overtime regulations for service or retail businesses, transportation workers, hospital facilities, and personnel who earn based on a piece-by-piece approach.
Overtime Exceptions in Indiana
Whether state-specific or federal, overtime laws are designed to protect workers from exploitation by unethical employers. Those paid on an hourly basis or workers in blue-collar environments are the greatest beneficiaries of these laws. These industries’ nature and limits on working hours by certain careers create lots of specific exemptions to overtime eligibility.
Administrators, executives, and other workers whose weekly income is at least $455 aren’t entitled to overtime pay under FLSA Section 13(a)(1). The law also exempts external salespeople and some IT-related professionals that work on their own hours.
Independent contractors who aren’t legal employees, some transportation personnel, a section of live-in workers like housekeepers, and particular farm and agricultural staff are also not covered.
The Bottom Line
Understandably, it may be challenging to compute accurate amounts for both regular hours and overtime. Fortunately, you can simplify the job by partnering with a knowledgeable team from ASAP Payroll Service with the right skills and tools for accurate payrolls, enhanced timekeeping, and improved productivity.
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