Indiana Wage Payment Laws
- Frequency of wage payments
- Manner of wage payments
- Direct deposit
- Payment upon separation from employment
- Wage in dispute
- Deductions from wages
- Uniforms, tools, and other equipment necessary for employment
- Pre-hire medical, physical, or drug tests
- Notice of wage reduction
- Statement of wages (pay stubs)
- Record keeping requirements
- Notice requirements
Frequency of Wage Payments
An employer must pay employees their wages no less frequently than twice per month. An employer must pay all wages earned within 10 days of the end of a pay period. Salaried employees do not need to be paid at least twice per month. An employee can request to be paid at least every two weeks. An employer must pay employees for wages earned in a pay period within 10 days of the end of the pay period. Indiana Code 22-2-5
Manner of Wage Payments
An employer may pay wages by:
- check, redeemable upon demand and without discount at a bank or other financial institution readily available to the employee, or
- direct deposit into an account at a financial institution designated by the employee.
An employer may pay wages by direct deposit, so long as the employee designates the financial institution with which the wages are deposited. Indiana Code 22-2-5 In Indiana, an employer can require an employee to receive payment of wages by direct deposit. IN DOL Wage & Hour FAQs.
Payment upon Separation from Employment
Employees who are fired, discharged, terminated, or laid off
When an employer discharges or lays off an employee, the employer must pay the employee all wages due by the next regular pay day. Indiana Code 22-2-9
Employees who quit or resign
When an employee quits, the employer must pay the employee all wages due by the next regular pay day.
If an employee leaves employment voluntarily and the employer does not know employee’s whereabouts or address, the employer must pay the employee:
- within ten (10) business days after the employee has made a demand for the wages due the employee; or
- when the employer receives an address where the wages may be sent or forwarded.
Employees who are suspended or resigns due to a labor dispute (strike)
When an employee resigns employment due to a labor dispute, the employer must pay the employee all wages due by the next regular pay day. Indiana Code 22-2-9
Wages in Dispute
In case of a dispute over wages, an employer must give notice to the employee of the amount of wages which he concedes to be due, and shall timely pay such amount, but the acceptance by the employee of any such payment does not constitute a release as to any balance of his claim. Indiana Code 22-2-9
Deductions from Wages
An employer cannot deduct wages from an employers paycheck or fine an employee forany of the following:
- cash shortages
- breakage, damage, or loss of the employer’s property
- required uniforms
- required tools
- other items necessary for employment
An employer may not deduct or withhold wages from an employees wages or accept an assignment from an employee of their wages, unless it is:
- in writing;
- signed by the employee personally;
- by its terms revocable at any time by the employee upon written notice to the employer; and
- agreed to in writing by the employer.
An employee can only consent to deductions from his or her pay check if it falls into a certain category of deduction, including:
- premiums on an insurance policy;
- 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; and
- payment to an employee’s direct deposit account.
For an deduction or assignment to be valid, the employee must have delivered an executed copy of the consent to the deduction or the assignment to the employer within ten (10) days after its execution.
If an employer has overpaid an employee, the employer may deduct from the wages of the employee the amount of the overpayment. An employer must give an employee two (2) weeks notice before the employer may deduct any such overpayment of wages from the employee’s wages.
An employer cannot deduct from an employees wages more than:
- twenty-five percent (25%) of the employee’s disposable earnings for that week; or
- the amount by which the employee’s disposable earnings for that week exceed thirty (30) times the federal minimum hourly wage rate.
Uniforms, Tools, and Other Equipment Necessary for Employment
Indiana law does not prohibit an employer from requiring an employee to pay for required uniforms or necessary equipment, but it cannot deduct the cost of a mandatory uniform from the employee’s paycheck. An employer may, with an employee’s written consent, deduct the cost of an optional uniform purchased by the employee. IN DOL Wage & Hour FAQ
Pre-hire Medical, Physical, or Drug Tests
Indiana does not have any laws prohibiting an employer from requiring an applicant or employee to pay the cost of a medical examination or the cost of furnishing any records required by the employer as a condition of employment.
Notice of Wage Reduction
Indiana does not have any laws addressing when or how an employer may reduce an employees wages or whether an employer must provide employees notice prior to instituting a wage reduction.
Statement of Wages (Pay Stub)
For each pay period, an employer must provide each employee a statement of the hours worked by the employee and the wages paid to him listing deductions made. Indiana Code 22-2-2-8
Record Keeping Requirements
Indiana does not have any laws requiring an employer to keep any employment-related documents.
Federal law requires every employer covered by the Fair Labor Standards Act (FLSA) to keep certain records for each covered, nonexempt worker, for at least three (3) years. For more information, visit FLSA.
Indiana does not have any laws requiring employers to provide employees, whether at hire or at any other time, of notice of wage rates, dates of pay, employment policies, fringe benefits, or other terms and conditions of employment.