Introduction to employment laws in Indiana
Overview
Indiana’s employment laws and regulations cover a range of important areas that hiring managers must be familiar with to ensure compliance. While the state follows federal laws such as the Fair Labor Standards Act (FLSA) for minimum wages and overtime, it also has its own specific mandates.
Notable regulations include the principle of at-will employment, protections against discrimination under the Indiana Civil Rights Law, and rules regarding wage payments, breaks, and leave policies.
Here’s everything you need to know about employment regulations and labor laws in Indiana.
Employing in Indiana: Key employment laws and practices
Standard work hours
Indiana state law does not define full-time employment, but it is generally considered to be between 35 and 40 hours per week.
Contractual employees are usually hired for specific projects or for a defined period. Their working hours are generally determined by the nature of their contract.
Self-employed professionals in Indiana set their own work hours based on their agreements with clients or the needs of their business.
Minimum wage and overtime
In Indiana, the minimum wage is set at the federal minimum rate of $7.25 per hour, which has remained so since 2009.
Generally, overtime pay is required for non-exempt employees who work more than 40 hours a week. These employees should receive 1.5 times their regular pay rate for each additional hour worked.
Insurance and benefits
Indiana law necessitates employers to provide certain insurance benefits. Employers are required to provide workers’ compensation insurance covering medical expenses and lost wages due to work-related injuries or illnesses. They are also required to fund unemployment insurance.
The state does not mandate that employers offer health, dental, or vision insurance. However, businesses with more than 50 full-time employees must offer health insurance under the federal Affordable Care Act.
Retirement benefits in Indiana are typically employer-sponsored plans like 401(k), or individual retirement accounts (IRAs). While not mandatory, offering retirement benefits can attract and retain valuable talent.
Type of employee benefit | Mandatory |
Workers’ compensation | Yes |
Dental/vision insurance | No |
Unemployment insurance | Yes |
Retirement benefits (401k, IRA) | No |
Meal and rest periods
Indiana’s employment laws do not mandate employers to provide meal breaks or rest periods to employees who are 18 years or older.
Employers that do choose to offer short breaks (five to 20 minutes) should consider these as compensable work hours. Thirty-minute meal breaks are not compensable as long as the employee is fully relieved of work-related duties for the duration.
In 2020, Indiana removed a longstanding rule obligating employers to provide a rest or meal period for minors under the age of 18 working six consecutive hours.
For employees who are breastfeeding, Indiana law mandates that employers with more than 25 employees should offer reasonable paid break times for up to one year following the child’s birth. These employers must also make reasonable efforts to provide a room or other location, other than a toilet stall, in close proximity to the employee’s work area.
Multiplier makes it easy to manage benefits for Indiana employees.
Anti-discrimination laws
In Indiana, anti-discrimination laws offer increased employee protections over and above federal guidelines. The Indiana Civil Rights Law applies to employers with six or more employees and prohibits discrimination based on protected attributes such as race, color, religion, sex, disability, national origin, ancestry, and veteran status. The Indiana Employment Discrimination Against Disabled Persons Act, which applies to employers with 15+ employees, prohibits discrimination against qualified individuals with disabilities and requires employers to provide reasonable accommodations for such individuals. The Indiana Age Discrimination Act (IADA) applies to employers with one or more employees and covers individuals aged between 40 and 74. It does not apply to employers already covered by the federal Age Discrimination in Employment Act (ADEA), which applies to employers with 20+ employees.Leave policies
Indiana law outlines various leave entitlements for employees. While some of them align with federal law, others are state-specific. Key leave entitlements include:| Leave type | Duration | Paid/unpaid | Eligibility criteria |
| Military family leave | Up to 10 days | Unpaid | 50+ employees |
| Military leave | Varies | Unpaid | All employees |
| Civil air patrol leave | Up to 15 days/year | Unpaid | All employees |
| Emergency responder leave | As required | Unpaid | All employees |
| Jury duty leave | As required | Unpaid | All employees |
Termination laws
In Indiana, employers must adhere to specific legal requirements around employee terminations. The state follows the “employment-at-will” doctrine, meaning both the employee and employer can terminate the employment relationship at any time without cause or notice. However, exceptions apply when termination is due to discriminatory reasons or in violation of public policy. Indiana law does not require employers to provide severance pay unless it is promised in an employment contract or company policy. Finally, employers must pay an employee’s final wages by the next regular payday, regardless of whether the employee resigned or was terminated. Upon termination of employment, Indiana employers must pay an employee’s final wages, in most cases, within 10 business days of the regularly scheduled pay date. If the employer fails to do so, Indiana law provides that an employee may file a wage claim with the Indiana Department of Labor or seek private legal counsel.Easily onboard employees in Indiana?
Safety and health
Indiana’s Occupational Safety and Health Act provides health and safety protections for employees. The state has a no-smoking rule in the workplace and prohibits the use of telecommunication devices while driving. Employers are required to follow these rules and inform employees about workplace safety.
Indiana law allows employees to store legally possessed firearms or ammunition in their locked vehicles out of plain sight. However, employers can prohibit employees from carrying weapons elsewhere on company property.
Taxes in Indiana
Employers in Indiana are responsible for withholding state income tax from the wages of resident employees for work performed within or outside the state and from nonresident employees for wages paid for work performed within the state.
Employers are also responsible for paying Federal Unemployment Tax (FUTA) and State Unemployment Insurance Tax (SUTA). The SUTA rate varies from 0.5% to 7.4%, depending on the employer’s experience rating.
Tax type | Tax rate |
Federal Unemployment Tax | 6.0% |
State Unemployment Insurance Tax | Ranges from 0.5% to 7.4% |
State Income Tax | 3.05% |
Managing Indiana employees with an Employer of Record (EOR)
Hiring and managing a team in Indiana involves complying with a blend of state-specific and federal employment laws. That’s a steep challenge for businesses that may not be familiar with the ins and outs of of Indiana’s legal landscape.
Multiplier can help you navigate these complexities. We offer an all-in-one platform for hiring, onboarding, paying, and managing international employees and contractors from a single interface.
Our EOR Service enables businesses to legally and compliantly employ full-time workers in Indiana without setting up a local entity. We also provide payroll services to pay U.S. employees while handling local taxes, contributions, and withholdings. To support your global team, our benefits administration provides U.S.-compliant and competitive benefits, including insurance coverage and pension plans.
Book a demo today to discover how we can streamline your HR and compliance processes.
FAQs
Indiana employment laws cover a broad spectrum of employer obligations and employee rights. These include fair employment practices, equal pay, pregnancy accommodation, minimum wage requirements, overtime rules, and workplace safety regulations. Businesses must comply with both federal and state laws to ensure full HR compliance.
Under Indiana HR compliance guidelines, employers may conduct criminal history checks on job applicants. Indiana state criminal background check laws do not limit how far back criminal records checks can go, so conviction records can be reported indefinitely.
Indiana’s minimum wage is $7.25 per hour, which is the same as the federal rate. For hours worked over 40 in a workweek, non-exempt employees must receive overtime pay at one-and-one-half times their regular pay rate. The state also has specific laws regarding breastfeeding breaks and child labor.
Indiana laws mandate certain leaves of absence for employees, such as military family leave, military leave, Civil Air Patrol leave, jury duty leave, and emergency responder leave. Understanding these requirements is important to ensure HR compliance in Indiana.
Indiana requires workplaces to be smoke-free and limits the use of weapons on premises. However, employees can keep legally possessed firearms or ammunition in locked compartments of their vehicles. Safe driving practices are also enforced, with prohibitions on holding or using a telecommunications device while driving.
