In 2022, Indiana’s state minimum wage is $7.25 per hour.

The tipped minimum wage in Indiana is $2.13 per hour.

In calculating the overtime rate for the tipped employee, the restaurateur must multiply the minimum wage ($7.25 per hour) by 1½ (1.5), subtract the tip credit ($5.12 per hour), multiply that figure by the number of overtime hours worked, and then add that sum to their 40-hour total. 

The State of Indiana has no breaks or lunch laws currently. It is considered a privilege given by the employer. Verification of this information can be obtained by contacting the Indiana Legislative Services at 317-232-9856. There are federal laws on breaks and lunches but not every Indiana company has to abide by them. More information on what the guidelines/restrictions are can be obtained by calling US Department of Labor at 317-226-6801 or by visiting their website.

No. Indiana law only requires that employers must pay employees for actual time worked. As a result, employers are not required to pay for sick days, personal days, or holidays.

In many cases, yes. This is called “tip pooling” or “tip sharing.” Employers may require that tips/gratuities be pooled and distributed among certain employees (usually the front of the house only) as a mechanism for ensuring that gratuities are shared by all employees in the chain of customer service. A “gratuity” is defined in the Labor Code as a tip, gratuity, or money that has been paid or given to or left for an employee by a patron of a business over and above the actual amount due for services rendered or for goods, food, drink, articles sold or served to patrons. Tip pools, whether voluntary or mandatory, are permitted for restaurant employees as long as:

• Tip pool participants are limited to those employees who contribute to the chain of service bargained for by the patron;
• No employer or agent of the employer takes or receives any part of the tips intended for employees; and
• The tips are distributed among the pool participants in a fair and reasonable manner.

Directly obtaining tips for redistribution is not required, nor is having a written agreement or written policy.

Final wages must be paid on or before the next regularly scheduled payday on which the employee would have been normally paid had the employee remained employed.

Unless covered by a collective bargaining agreement or other form of pay guarantee, an employer can change an employee’s rate of pay as long as the reduction does not bring an employee’s wage below the applicable federal or state minimum wage. To avoid potential liability, the employer should notify the affected employee prior to his/her working at the reduced rate.

No. An employer is not permitted under Indiana law to fine an employee and deduct the amount from his/her pay. After an employee receives his/her full check, however, an employer may ask an employee to pay him/her back for loans, goods or services rendered to the employee or for damage to company property. An employer may terminate an employee and/or file a lawsuit for failure to repay these types of debts.

Indiana law permits employers to deduct the amount of overpayment from an employee’s paycheck. However, employers must give at least a two (2) week’s notice before the deduction is made from the employee’s wages.

Per Indiana law IC 22-2-6-4, an employer cannot deduct more than twenty-five percent (25%) of the employee’s disposable earnings for a week or the amount by which the employee’s disposable earnings for the week exceed thirty (30) times the federal minimum wage.

 Indiana law requires three conditions to be met in order for a wage deduction to be valid:

1. The agreement for the deduction must be 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.
2. A copy of the deduction agreement must be delivered to the employer within ten days of its execution.
3. Only certain categories of deductions are allowed, including:
   • Premiums on an insurance policy obtained for the employee by the employer
   • Contributions to a charitable organization
   • Purchase price of bonds, securities or stock of the employing company
   • Labor union dues
   • Purchase price of merchandise sold by the employer to the employee
   • Amount of loan made to the employee by the employer
   • Contributions of the employee to a hospital service or medical expense plan
   • Payment to an employee’s direct deposit account
   • Uniform or equipment purchase necessary to fulfill the duties of employment, provided that the total amount of wages assigned may not exceed the lesser of: (A) $2,500 per year ($48.08 weekly); or (B) 5% of the employee’s weekly disposable earnings
   • Reimbursement for education or employee skills training, unless the education or employee skills training was provided through an economic development incentive from a federal, state, or local program
   • An advance for payroll or vacation pay
   • Merchandise, goods, or food offered by the employer, for the employee’s benefit, use, or consumption, at the written request of the employee 

Indiana law does allow employers to deduct from an employee’s pay the cost of uniform (and equipment) purchase necessary to fulfill the duties of employment.

However, there are some important stipulations.  The total amount of wages assigned may not exceed the lesser of: (A) $2,500 per year ($48.08 weekly); or (B) 5% of the employee’s weekly disposable earnings.  Further, according to federal law (see FLSA Fact Sheet #16) pay deductions cannot be made which reduce an employee’s wages below minimum wage nor may that deduction for the cost cut into overtime compensation required by the Fair Labor Standards Act.

Generally, yes. An employer must compensate employees for time spent on the job when the employee is subject to the employer’s control and direction.

Indiana has a Blacklisting law which permits employers to disclose only truthful facts about an employee’s termination. If you believe your former employer has made untrue statements about you, you must request copies of any written correspondence from a former employer to a potential employer within 30 days of applying for a job with the potential employer. You may wish to consult a private attorney about any remedies for violation of the Blacklisting law.

Yes. Vacation time is considered a fringe benefit and is up to the discretion of the employer.