Understanding Indiana labor laws is essential for both employers and employees, especially when it comes to overtime pay. Under Indiana overtime laws, most employees must be paid time-and-a-half for any hours worked beyond 40 in a workweek.
This guide breaks down the key rules related to overtime pay, employee eligibility, comp time off, and pay rates to help employers stay compliant and ensure employees stay informed about their rights.
Indiana Overtime Laws Summary
| State law | Indiana Minimum Wage Law |
| Federal law | Fair Labor Standards Act |
| Overtime pay rule | 1.5 times the employee’s regular hourly wage for all hours worked over 40 in a workweek |
| Minimum wage | $7.25 per hour |
| Training wage for employees younger than 20 years for the first 90 days | $4.25 per hour |
| Minimum overtime wage | $10.88 per hour for minimum wage workers |
| Compensatory time instead of overtime pay | Allowed for state employees |
| Salary threshold for overtime exemption | $150/week |
This Article Covers
- Overtime Pay Rates in Indiana
- Overtime Entitlement in Indiana
- Who is Exempt From Overtime Pay in Indiana?
- Overtime Pay for Tipped Employees in Indiana
- Overtime Pay for Salaried Employees in Indiana
- Is Compensatory Time Off Allowed in Indiana?
- Penalties for Violating Overtime Laws in Indiana
Overtime Pay Rates in Indiana
Overtime rules under the Indiana Minimum Wage Law are aligned with the federal Fair Labor Standards Act (FLSA). For any hours worked beyond 40 hours in a workweek, most employees in Indiana are entitled to receive overtime pay at 1.5 times their regular hourly rate, unless they qualify for an exemption.
With Indiana’s minimum wage set at $7.25 per hour, the minimum overtime rate comes to $10.88 per hour (1.5 x $7.25) for minimum wage workers.
Indiana law also allows employers to pay a training wage of $4.25 per hour to employees under 20 years old during their first 90 days of employment.
Employers are not required to pay overtime for working more than eight hours in a day, or working on weekends and holidays, unless the total hours worked exceed 40 in a workweek.
Learn more about your overtime rights in Indiana.
What counts as hours worked in Indiana?
“Hours worked” include all the time an employee spends on duty, at the job site, or actively performing job-related tasks, as defined by the FLSA.
For state employees in Indiana, hours worked include:
- Regular work hours
- Short breaks of less than 20 minutes
- Travel time during the workday (like commuting between job sites)
- Time spent working while on-call or attending required training
However, certain times are not counted as hours worked, such as normal commuting (home to work), holidays and paid leave, voluntary training outside work hours, and on-call time when the employee is free to use that time for personal purposes.
Special rules may apply for travel outside of regular hours, sleep time during long shifts, and minor tasks (such as briefly checking emails), which may not always be compensable.
What is a workweek under the FLSA?
Under the FLSA, a workweek is a fixed period of 168 hours (seven consecutive 24-hour daya). It can begin on any day and at any time, as determined by the employer.
Each workweek must be treated separately. Employers cannot average hours across multiple weeks to avoid paying overtime in Indiana.
Overtime Entitlement in Indiana
According to Indiana overtime laws, most employees are entitled to overtime pay after 40 hours of work in a workweek. Some employees may be exempt based on their age, salary level, job duties, industry, pay structure, and employment relationship. You can read about these exemptions in the next section.
Who is Exempt From Overtime Pay in Indiana?
Under Indiana law, certain workers are not considered “employees” for overtime purposes and may be exempt from overtime pay requirements. Common categories of exempt workers include:
- Employees in executive, administrative, or professional roles who earn at least $150 per week and have the authority to hire or fire
- Minors under 16 years of age
- Independent contractors who operate their own business and are free from employer control
- Individuals performing work outside the employer’s regular business activities
- Commission-based workers
- Family members working for relatives (parent, spouse, or child)
- Religious workers and volunteers, including ministers and members of religious organizations
- Students and trainees, such as student nurses, interns, apprentices, and students working at their school
- Individuals with disabilities working for nonprofit organizations focused on rehabilitation
- Insurance agents and outside sales employees paid solely on commission
- Direct sellers (such as door-to-door or non-retail sales workers) whose earnings depend on sales, not hours worked
- Minor league baseball players under a collective bargaining agreement
- Agricultural workers, including those involved in farming, livestock care, harvesting, and related farm operations
- Workers at nonprofit camps, recreational, or educational facilities
- Certain transportation employees regulated under federal motor carrier laws
- Employees who work less than four weeks within any three-month period
- Certain workers covered by state or federal transportation laws
Overtime Pay for Tipped Employees in Indiana
Tipped employees refer to employees who regularly receive more than $30 a month in tips. Indiana law allows employers to pay a lower cash wage to tipped employees, which must be at least $2.13 an hour and claim a tip credit of up to $5.12 per hour. Employees must earn at a rate equal to the minimum wage ($7.25 per hour) after adding any tips they received to the minimum cash wage.
If the employee’s total earnings (cash wage + tips) do not meet Indiana’s minimum wage of $7.25 per hour, the employer must pay the employee the difference.
When a tipped employee works over 40 hours in a workweek, their overtime rate will be calculated based on the full minimum wage, not the lower cash wage that they are being paid. Their overtime rate must be at least $10.88 per hour under Indiana overtime laws.
Overtime Pay for Salaried Employees in Indiana
Certain salaried employees, such as employees in executive, administrative, or professional roles who earn at least $150 per week and have the authority to hire or fire, are exempt from overtime pay under Indiana overtime laws.
Non-exempt salaried employees in Indiana must be paid overtime at 1.5 times their regular rate of pay for all hours worked over 40 in a workweek under both state and federal overtime laws.
Employers can find an employee’s regular hourly rate by dividing the employee’s salary by the number of hours that salary covers.
Example:
Employee earns $350 per week for a 35-hour workweek
Their regular hourly rate: $350 / 35 = $10 per hour
Their overtime rate: 1.5 x $10 = $15 per hour
Overtime pay for working 45 hours in a workweek, which amounts to 5 overtime hours: 5 x $15 = $75
If an employee’s salary covers less than 40 hours a week (like for 35 hours in the example above), they are still paid their regular rate for any extra hours worked until they reach 40 hours. Overtime pay will only apply after 40 hours.
Use our overtime calculator to calculate overtime hours and pay in Indiana.
Is Compensatory Time Off Allowed in Indiana?
Overtime-eligible state employees in Indiana may choose to receive compensatory time instead of overtime pay, with employer approval. Comp time is earned at the same rate as overtime: 1.5 hours of comp time for every hour worked over 40 in a workweek.
If an employee has unused comp time and takes leave under the Family and Medical Leave Act (FMLA), they must use their available comp time during that leave before using other paid leave or unpaid time off.
Any unused comp time must be paid out in the quarter following when it was earned, unless an extension is approved by the appropriate state authorities in Indiana.
Penalties for Violating Overtime Laws in Indiana
Employees who do not receive overtime pay can file overtime claims with the US Department of Labor’s Wage and Hour Division directly or at the Indianapolis District Office.
According to the Indiana Minimum Wage Act, employers are also required to provide each employee with a statement of the hours worked, the wages paid, and any deductions made to the wages.
Employees who do not receive their pay stubs can reach out to the Indiana Department of Labor (IDOL) for assistance.
Important Cautionary Note
This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.
