- 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 most employees their wages no less frequently than twice per month. An employer must pay all wages earned within ten (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 ten (10) days of the end of the pay period. IN Statute 22-2-5
An employer engaged in mining coal, ore, or other mineral, quarrying stone, or in manufacturing iron, steel, lumber, staves, heading barrels, brick, tile, machinery, agricultural or mechanical implements, or any article of merchandise must pay each employee, if demanded, at least every two (2) weeks. IN Statute 22-2-4
Manner of Wage Payments
An employer may pay wages by:
- check, draft, or money order 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. IN Statute 22-2-5 In Indiana, an employer can require an employee to receive payment of wages by direct deposit. IN DOL Wage & Hour FAQs.
Indiana labor laws do not specifically address whether an employer may pay an employee their wages by payroll card.
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 payday. IN Statute 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 payday.
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 payday. IN Statute 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. IN Statute 22-2-9
Deductions from Wages
An employer may not deduct or withhold wages from an employee’s 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 paycheck 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;
- payment to an employee’s direct deposit account;
- payment to any credit union, nonprofit organizations, or associations of employees of such employer organized under any law of Indiana or of the United States;
- premiums on policies of insurance and annuities purchased by the employee on the employee’s life;
- the purchase price of shares or fractional interest in shares in one (1) or more mutual funds;
- a judgment owed by the employee if the payment:
- is made in accordance with an agreement between the employee and the creditor; and
- is not a garnishment under IN Statute 34-25-3.
- the purchase, rental, or use of uniforms, shirts, pants, or other job-related clothing at an amount not to exceed the direct cost paid by an employer to an external vendor for those items;
- the purchase of equipment or tools necessary to fulfill the duties of employment at an amount not to exceed the direct cost paid by an employer to an external vendor for those items;
- reimbursement for education or employee skills training, unless a wage assignment may not be made if the education or employee skills training benefits were provided, in whole or in part, through an economic development incentive from any federal, state, or local program;
- an advance for payroll or vacation;
- the employee’s drug education and addiction treatment services under IN Statute 12-23-23.
For a 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 employee’s 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 employee’s 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
- the wages paid
- the deductions made
Record Keeping Requirements
When demanded by the Indiana Department of Labor, employers must provide information about:
- the hours worked by employees
- the wages paid
- the deductions made
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.