Compliance Watch:

What are my rights as a salaried employee 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.

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.

• 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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.