Compliance Watch:
What are my rights as a salaried employee in Indiana?

April 13th 2024

Understanding your rights as a salaried employee in Indiana not only broadens your legal knowledge but also empowers you as a working professional.

As you navigate your daily work routine, your salary plays a pivotal role in determining your position within the workplace. However, it’s essential to acknowledge that the intricacies of your employment arrangement can vary significantly from one U.S. state to another.

This article aims to guide you in addressing the labor-related inquiries that have sparked your curiosity. We will delve into your rights, providing you with insights that will lead you towards a work experience that is both well-informed and empowered, following the specific regulations of Indiana.

This Article Covers

Defining a Salaried Employee in Indiana
Common Questions About Salaried Employee Rights in Indiana
Understanding Exempt vs. Non-Exempt Status in Indiana
Wage and Hour Regulations in Indiana
Deductions, Benefits, and Protections in Indiana
Taking Action Against Violations in Indiana
Case Studies and Real-Life Scenarios of Salaried Employee Rights Violations in Indiana

Defining a Salaried Employee in Indiana

What is Salaried Employment in Indiana?

Salaried workers are individuals who receive a predetermined, consistent sum of money as their compensation at intervals, typically on a weekly or less frequent basis. These employees are governed by specific regulations that prescribe the terms of their employment.

Following Indiana state law, employers are obligated to provide compensation to their employees at least twice a month. Additionally, employers must establish a regular payday schedule, ensuring that employees are paid within a maximum of ten days after the conclusion of a pay period for which wages are owed. These legal requirements are in place to safeguard the rights and interests of both employers and employees in Indiana.

What are the Key Differences Between Salaried and Hourly Employees in Indiana?

Aspect Salaried Employees Hourly Employees
Minimum Wage Laws Paid a fixed amount regardless of hours worked. Subject to Indiana’s minimum wage of $7.25/hour. 
Overtime Laws Overtime eligibility varies. Workers are classified as exempt under FLSA for certain positions. Eligible for overtime for work hours exceeding 40 hours in a workweek.
Paid Sick Leave & FMLA Salaried pay may include sick leave; specifics vary by employer. May earn paid sick leave and use it with unpaid FMLA leave.
Paid Vacation Salaried pay may include vacation; specifics vary by employer. May earn paid vacation based on hours worked and employer policies.
Maternity/Paternity Leave May have unpaid provisions; duration and specifics vary by agreement with the employer. No guaranteed paid leave; terms depend on the employer’s policies.
Job Security Salaried employees typically enjoy more job security. Less job security as the work schedule can change.

If you’d like to know about Indiana labor laws, learn more with our guides on your rights as an hourly employee and salaried employee laws.

Common Questions About Salaried Employee Rights in Indiana

What are the Basic Rights of Salaried Employees in Indiana?

  • Minimum Wage: In Indiana, employees have the right to receive the state’s minimum wage, which is currently set at $7.25 per hour. However, this rate applies specifically to non-exempt salaried employees. Exempt salaried employees, on the other hand, must receive a minimum annual compensation of $35,568 or a minimum of $684 each week.
  • Overtime Pay: Eligible salaried employees are entitled to receive overtime pay at a rate of 1.5 times their regular hourly rate for any hours worked beyond 40 hours in a single workweek. Non-exempt salaried government employees have the choice to receive compensatory time instead of overtime pay.
  • Meal and Rest Breaks: Indiana labor laws do not mandate that employers provide meal or rest breaks for adult employees. However, exceptions may be made for nursing mothers.
  • Family and Medical Leave: Qualified employees have the right to take unpaid leave for specific medical and family-related reasons under the Family and Medical Leave Act (FMLA).
  • Equal Pay: Salaried employees are guaranteed equal pay for work that demands equal effort, skill, and responsibility. Employers in the state are prohibited from establishing pay disparities based on factors such as gender, race, color, religion, age, national origin, or ancestry. Compensation differences should solely be based on factors like merit, seniority, work quality, and quantity.
  • Whistleblower Protection Laws: Employers are prohibited from taking adverse actions or retaliating against employees who engage in activities protected by the Indiana Whistleblower Protection Unit.
  • Anti-Discrimination Laws: All employees are safeguarded against workplace discrimination based on the following protected characteristics: disability, national origin, ancestry, race, color, religion, gender, and military veteran status.

Is Overtime Pay Applicable to Salaried Employees in Indiana?

Yes, some salaried employees in Indiana may qualify for overtime pay. There are specific categories of salaried employees that may be exempt from receiving overtime compensation; however, it is important to understand that not all salaried employees fall into this exempt category. The state of Indiana adheres to definitions provided by the Fair Labor Standards Act (FLSA). The classifications of employees fall under the following categories:

  • Executives: Executives also hold advanced knowledge and expertise in their field and have the authority to make decisions regarding hiring and firing employees within their purview.
  • Professionals: These individuals possess advanced knowledge and expertise, typically gained through years of experience, which they utilize to oversee various departments within their organization.
  • Computer Employees: This category encompasses roles such as software engineers, computer programmers, or analysts.
  • Administrative Employees: Administrative employees perform roles related to accounting, quality control, human resources, personnel management, or labor relations.
  • Highly-Compensated Employees: These are employees whose job functions are typically office-based or do not involve manual labor. They typically earn a total annual compensation of $107,432 or more.

Read more about Indiana’s overtime laws with our guide.

Can Employers Deduct Wages from Salaried Employees in Indiana?

Indiana does not have its own distinct set of general wage deduction regulations. Instead, the state adheres to the principles laid out in the Fair Labor Standards Act (FLSA), a federal law administered by the Department of Labor.

While wage deduction regulations can differ between states, Indiana adheres to the basic standards established by the FLSA. Compliance with wage deduction rules entails obtaining prior written consent from employees. Deductions that are not legally required are considered unlawful if consent has not been obtained.

According to the Department of Labor’s Wage and Hour Division, when discussing deductions for uniforms and other facilities under the Fair Labor Standards Act, The FLSA does not mandate uniforms as a requirement. If uniforms are necessary due to the type of work, the employer, or legal requirements, the responsibility for providing and maintaining the uniform should lie with the employer.

If, however, the employer expects the employee to bear the cost, it should not result in the employee receiving a wage lower than the minimum wage.

Are Salaried Employees Eligible for Breaks and Leaves in Indiana?

In Indiana, employers are not required by law to provide salaried employees with breaks. However, should they choose to do so, it is essential to note that any break lasting less than 20 minutes is regarded as an integral part of a workday.

However, nursing mothers are granted breaks to express milk for their newborns.

The state of Indiana complies with the Family and Medical Leave Act (FMLA) concerning unpaid family and medical leave available to eligible employees. This leave can be utilized in the following qualifying circumstances:

  • The birth of an employee’s child.
  • The placement of a child with the employee for adoption or foster care.
  • To care for an employee’s spouse, child, or parent who is dealing with a severe health condition.
  • When the employee themselves is experiencing a serious health condition that hinders their ability to perform their job.
  • In cases where a qualifying matter arises due to the employee’s spouse, child, or parent being on covered active duty or receiving a call to covered active-duty status.
  • To provide care for a covered service member who is ill or has faced a severe injury.

Can Salaried Employees Request Flexible Work Arrangements in Indiana?

The Flexible Work Arrangements policy established by the Indiana State Personnel Department encompasses alternative work schedules and remote work options. To be eligible for these flexible work arrangements, the following criteria must be met:

  • The proposed arrangement should not adversely affect other departments, functions, or personnel.
  • It should either enhance or sustain employee productivity and job satisfaction.
  • In the case of remote work, designated managers may grant permission for employees to work remotely for a maximum of 15 hours per work week, provided they meet the eligibility criteria for remote work.
  • Requests to exceed the 15-hour limit for remote work will not be approved unless there is a compelling business necessity for the agency.

Understanding Exempt vs. Non-Exempt Status in Indiana

Understanding the distinction between exempt and non-exempt status is crucial for salaried employees in Indiana to navigate their rights and responsibilities effectively.

What is the Definition and Implications of Exempt Status in Indiana?

Exempt status refers to an employee who is not eligible for overtime pay. This means they do not receive additional wages for working overtime. Indiana’s state laws adhere to exemption categories defined by the Fair Labor Standards Act (FLSA).

An employee is categorized as exempt if they meet the following criteria:

  • Level of Compensation: Salaried employees earning more than $684 per week or $35,568 annually are classified as exempt. Exempt salaried employees are not entitled to receive overtime pay, although they may be eligible for certain bonuses.
  • Type of Compensation: Employees should consistently receive a consistent salary within a predefined pay period.
  • Job Role and Responsibilities: Employees eligible for exemption from overtime pay include workers in roles such as executives or managerial positions, administrators, learned professionals, computer employees, and highly compensated employees.

What are the Differences Between Exempt and Non-Exempt Salaried Employees in Indiana?

Aspect Exempt Employees Non-exempt Employees
Overtime Generally not eligible for overtime pay. Eligible for overtime pay for working over 40 hours per week. Entitled rate of one-and-a-half times the standard hourly wage.
Pay Structure Paid on a salary basis. Paid hourly.
Monitoring Hours Not expected to track hours worked. Expected to track and report hours worked
Employee Type Employees who typically hold managerial or professional roles. Job roles vary but may include blue-collar workers, clerical staff, or retail employees.
Minimum Salary  The minimum salary threshold for exemption, as set by the FLSA is $684. Employees who earn below $684 a week and work in a non-exempt industry.
Stability Stable paycheck and benefit eligibility. Varied hours, potential for instability.
Paid Time Off May qualify for paid vacation or sick time. Typically, they are not eligible for paid time off.

How to Determine if You're Exempt or Non-Exempt in Indiana?

Determining whether you fall into the category of an exempt or non-exempt employee in the state of Indiana requires you to assess yourself using three foundational assessments, as established by the Fair Labor Standards Act (FLSA):

  • Salary Level Test: Employees who earn an annual salary exceeding $35,568, which is equivalent to $684 per week, may potentially be considered exempt.
  • Salary Basis Test: Employees who receive a guaranteed minimum compensation, regardless of the actual hours worked, could qualify for exempt status.
  • Duties Test: In addition to meeting the above criteria for the first two tests, an employee must also perform duties that align with exempt job responsibilities. These responsibilities may include certain administrative duties, executive tasks involving the regular supervision of two or more employees, and professional duties that require specialized education, discretion, and judgment in intellectual activities.

Wage and Hour Regulations in Indiana

What are the Minimum Wage Requirements for Salaried Employees in Indiana?

Employees in Indiana who’ve worked between 37.5 and 40 hours in a calendar week are paid at the regular rate, which is the standard hourly wage of $7.25.

The tipped minimum wage in Indiana adheres to federal regulations and is set at $2.13 per hour for employees who typically receive over $30 a month in tips. If an employee’s combined earnings, including both tips and regular wages, do not meet the minimum wage, the employer must compensate for the difference.

How is Overtime Compensated for Salaried Employees in Indiana?

Salaried employees in Indiana who qualify for overtime are compensated at the premium rate of one-and-a-half times the standard hourly wage. This applies when they have worked beyond 40 hours in a week.

Deductions, Benefits, and Protections in Indiana

What are the Permissible Deductions from Salaried Employee Pay in Indiana?

Salaried employees in Indiana may choose to have the following deducted from their pay:

  • Wages for Uniforms or Equipment: Employees can allocate a portion of their wages for uniforms or job-related equipment. The assigned amount must not exceed $2,500 per year or 5% of weekly disposable earnings.
  • Education or Training Reimbursement: Wages can be assigned for education or skills training expenses, excluding those funded by government economic development incentives.
  • Payroll or Vacation Advance: Employees have the option to receive wage advances for payroll or vacation pay.
  • Merchandise, goods, or food: Upon employee request, employers can deduct wages for items provided by the employer for the employee’s benefit or use.

However, regulations set by the Fair Labor Standards Act (FLSA) state that it is illegal for employers to lower the salary of a salaried employee to an amount below the minimum wage. Additionally, such reductions cannot infringe upon the overtime compensation mandated by the Fair Labor Standards Act.

What are the Provided Employee Benefits and Protections Under Indiana State Law?

Indiana’s state legislation offers a wide range of advantages and safeguards for salaried employees. These benefits and protections are designed to foster fairness and equity in the workplace. These encompass:

  • Minimum Wage: Indiana establishes a minimum wage rate, guaranteeing employees fair recompense for their labor.
  • Right-to-Work: Indiana upholds a “Right-to-Work” policy, which guarantees that employers cannot force employees to join a union or obligate them to make union-related payments as a prerequisite for employment.
  • Overtime Compensation: Eligible Indiana workers have the right to receive overtime pay, typically at 1.5 times their regular hourly wage, for hours worked beyond 40 in a workweek.
  • Pay Equity: The state prohibits wage discrimination based on gender, ensuring that individuals performing substantially similar work receive equal pay.
  • Child Labor Regulations: Indiana enforces laws regulating the employment of minors.
  • Whistleblower Protection: There are regulations in place to safeguard employees who report violations of the law by their employers or colleagues from facing actions of retaliation.
  • Family and Medical Leave: Eligible employees can take advantage of job-protected leave for family and medical reasons under the federal Family and Medical Leave Act (FMLA), which also applies in Indiana.

Taking Action Against Violations in Indiana

How to Report Violations to Authorities or Labor Departments in Indiana?

In Indiana, you can report instances of labor or employment law violations to the relevant authoritative offices and federal agencies. Cases that involve breaches of labor or employment regulations can encompass concerns about disparities in compensation and hours worked, unsafe workplace conditions, or inequitable treatment.

Should you suspect that you’ve been discriminated against, you have the option to initiate a discrimination complaint with either the U.S. Equal Employment Opportunity Commission or the Indiana Civil Rights Commission. If there is a violation of your wages, you can file a complaint with the Indiana Department of Labor.

Case Studies and Real-Life Scenarios of Salaried Employee Rights Violations in Indiana

Violation of Wage Laws: Indianapolis Security Company Pays $370K in Back Wages.

215 security professionals responsible for various duties at Indianapolis International Airport and local businesses have finally received their owed overtime wages. In the U.S. Department of Labor vs. Protection Plus Inc. case, Protection Plus Inc. and its employer, Raymond Stanley, were compelled to pay $185,459 in wages, matched by an equal sum in liquidated damages, as per a June 7, 2022, consent judgment issued in the U.S. District Court for the Southern District of Indiana. Additionally, the employer incurred a civil money penalty of $69,540 for knowingly violating federal wage laws, echoing similar violations previously discovered in 2018.

The U.S. Department of Labor’s investigation revealed multiple infractions by Protection Plus, including the failure to pay overtime premiums to some employees for hours exceeding 40 in a workweek, inaccurate computation of overtime for employees with different pay rates for various tasks within the same week, and a lack of accurate payroll records. These actions were in direct violation of the Fair Labor Standards Act. Despite a prior 2018 investigation resulting in the payment of overtime back wages, liquidated damages, and civil penalties, the company failed to rectify its pay practices, ultimately depriving employees of their rightful earnings. This case underscores the importance of fair wage practices, consistent record-keeping, and the repercussions of ignoring labor laws.

Lessons Learned from the Case

  • Compliance with Labor Laws: This case highlights the critical importance of companies adhering to labor laws and regulations, such as the Fair Labor Standards Act. Failure to do so can lead to substantial financial penalties and damage a company’s reputation.
  • Overtime Compensation: Employers must ensure that they properly calculate and pay overtime wages to eligible employees when they work beyond 40 hours in a work week.
  • Continual Monitoring and Improvement: Even after facing penalties for labor law violations, companies must remain vigilant and make necessary changes to their pay practices and record-keeping systems to avoid repeating past mistakes. Neglecting to do so can result in recurring violations and further consequences for both employees and the company.

Employment Discrimination: Court Orders a LapCorp Facility to Pay $525,000.

In a case against a LabCorp subsidiary, a global laboratory services provider has settled with the U.S. Department of Labor, agreeing to pay $525,000 in back wages and interest to 13 Asian and 205 black applicants. This settlement follows a routine investigation revealing hiring discrimination at their Indianapolis facility.

Between May 3, 2019, and May 3, 2021, LabCorp was found to have discriminated against 148 Black applicants for kit production assistant positions, 57 black applicants for sample handling assistant positions, and 13 Asian applicants for medical technician positions. LabCorp Central Laboratory Services Inc., which serves the National Institutes of Health, faced accusations under Executive Order 11246, which prohibits employment discrimination based on various factors.

In addition to the financial compensation, the company will extend job offers to 34 black and three Asian individuals affected by the discrimination and ensure discrimination-free hiring policies.

Lessons Learned From the Case

  • Equal Employment Compliance: Compliance with equal employment laws is critical, and federal contractors must ensure non-discriminatory hiring practices.
  • Accountability for Discrimination: The Department of Labor holds companies accountable for discriminatory practices, highlighting the need for proactive prevention and correction.
  • Compensation and Corrective Actions: Companies should not only provide financial settlements but also offer job opportunities to affected individuals and implement anti-discrimination policies to foster inclusivity and equity. The settlement also serves as a reminder that when companies do not adhere to the state’s laws, they could face corrective actions that can impact the financial state of the company.

Final Thoughts

As an employed professional in Indiana, it is important to have an intense understanding of your legal rights and protections. This understanding not only enables you to shield yourself from possible infringements but also equips you with the knowledge you need to look out for your welfare.

Keeping yourself informed of changes in labor legislation is imperative to ensuring a favorable workplace environment. Given how complex employment regulations are, seeking expert guidance through consultations with an employment attorney, reaching out to the U.S. Department of Labor, or contacting the Office of the Labor Commissioner can steer you in the right direction.

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.