Indiana’s current minimum wage law is $7.25. IN Statute 22-2-2-4
Indiana employers must also comply with federal minimum wage laws, which currently sets the federal minimum wage at $7.25. See FLSA: Minimum Wage.
Indiana state law has an overtime requirement that requires employers to pay employees one and a half their regular rate of pay if they work more than 40 hours per workweek. IN Minimum Wage Notice; IN Statute 22-2-2-4(f). See FLSA: Overtime for more information regarding overtime requirements.
Tip minimum wage
Indiana’s state minimum wage for tipped employees is $2.13. If employers decide to take advantage of the tip credit that allows them to pay the tipped minimum wage, they must also ensure they are paid the standard minimum wage when tips received are combined with the tipped wages earned. IN Statute 22-2-2-4(d)
Tip Pooling and Sharing
Indiana minimum wage law does not address tip pooling or sharing. However, because most employees working in Indiana are subject only to the federal Fair Labor Standards Act, the rules and regulations regarding tip/gratuity pooling set forth in that law provides reasonable guidance.
Employees with disabilities
Indiana minimum wage laws do not allow employers to pay employees with disabilities a subminimum wage rate less than the standard minimum wage. That is except when they work for nonprofit organizations that primarily provide employment for persons with disabilities or assist in their therapy and rehabilitation.
Employees with disabilities that work for such nonprofit organizations are exempt from Indiana’s minimum wage and overtime requirements. IN Statute 22-2-2-3(j)
Indiana minimum wage laws allow employers to pay trainees under the age of 20 a subminimum wage of not less than $4.25 per hour to employees for the first 90 consecutive calendar days after the trainees are initially employed by the employer. An employer may not hire employees at the trainee subminimum wage in order to fully or partially displace another employee, IN Statute 22-2-2-4(j); IN Minimum Wage Poster
Indiana minimum wage laws do not allow employers to pay apprentices a subminimum wage lower than the standard minimum wage, except for apprentices who perform services for licensed funeral directors and embalmers as part of their apprenticeship requirements necessary to obtain their own license. Funeral directory and embalmer apprentices are exempt from Indiana’s minimum wage and overtime exemptions. IN Statute 22-2-2-3(g).
Indiana minimum wage laws do not allow employers to pay learners a subminimum wage lower than the standard minimum wage, except individuals who have completed a four (4) year course in medical school approved by law and who are working as interns or resident physicians at any accredited hospital. Such interns and resident physicians are exempt from Indiana’s minimum wage and overtime exemptions. IN Statute 22-2-2-3(h).
Indiana minimum wage laws do not allow employers to pay student learners a subminimum wage lower than the standard minimum wage, except:
- student nurses working at hospitals or nurse training schools while enrolled and regularly attending classes in a nurses training school chartered or approved under law; and
- students working for licensed funeral directors or embalmers while attending any school required by law to obtain a funeral director or embalmer license.
Student nurses and student funeral directors and embalmers are exempt from Indiana’s minimum wage and overtime requirements.
Indiana minimum wage laws allow employers to pay student workers a subminimum wage that less than the standard minimum wage if the students provide services for any school, college, or university in which the student is enrolled and attends classes regularly. Such students are exempt from Indiana’s minimum wage and overtime requirements. IN Statute 22-2-2-3(i).
Indiana Minimum Wage Laws 2023 FAQs
Will there be a minimum wage increase in Indiana in 2023?
The state of Indiana currently follows the federal minimum wage and has not changed since July 24, 2009.
At the time of writing, there are no updates on whether there will be a minimum wage increase anytime soon. At least for this year, hourly employees employed by businesses with more than two employees will receive the same minimum wage rates, except for those where exemptions and special rates will apply.
Will there be further minimum wage increases in Indiana in the future?
Given the current rate of Indiana’s statewide minimum wage, it is understandable why there are initiatives for a minimum wage rate increase in the future.
One such effort is Senate Bill 121. Once it becomes minimum wage legislation, it will start a series of minimum wage rate changes annually until it reaches its current goal for the base hourly rate to be $15.
Once passed, you can expect that there will be changes in the current minimum wage rules and wage regulations.
How can small business owners in Indiana adjust to these minimum wage increases?
There are different steps that a business owner can consider undertaking to make the most of employee costs. For instance, you might want to consider providing benefits for staff employees.
This entitles you to provide a slightly lower hourly rate than those who don’t receive coverage. It can also increase job satisfaction and even reduce employee turnover.
Another step that you can do is to assess your current employees. Do you really need full-time workers, or will seasonal employees be more beneficial?
You might also want to look into each worker’s level of productivity and work ethic. Investing more in deserving and talented employees will always bode better for a growing business.
Finally, it is always ideal to stay on top of compliance updates. Those who need assistance can inquire from the business liaisons at your local city hall.