What is the minimum wage in Indiana?
The minimum wage in the state of Indiana is $7.25 per hour. The state follows federal minimum wage requirements as laid out in the Fair Labor Standards Act. The FLSA also allows employers in Indiana to pay employees under the age of 20 a training wage of $4.25 per hour during the first 90 consecutive days of employment. Employers with two or more employees must follow the minimum wage laws.
Indiana minimum wage laws
The purpose of minimum wage laws in Indiana and throughout the U.S. is to ensure that employees are provided a fair base rate that cannot be changed due to fluctuations in the economy. Minimum wage requirements were first developed in the 1930s to help ensure workers received enough income to pay for basic necessities such as housing and food.
Indiana minimum wage exemptions include tipped employees, workers under 20 years of age for the first 90 days of employment, and high school and college students participating in work-study programs. Tipped workers must receive a cash minimum of $2.13 per hour, workers under 20 years of age must be paid $4.25 during the 90-day training period, and high school and college students can be paid 85% of the Indiana minimum wage during program participation. Certain salaried employees may also be eligible for exemption if they meet the salaried employee requirements per the FLSA.
The minimum wage for Indiana was last changed in 2009, when it was raised from $6.55 per hour to $7.25 per hour. The Indiana Department of Labor requires that employers display posters in the workplace that clearly and accurately depict the current minimum wage and overtime pay requirements.
Indiana employers who don’t follow the state and federal minimum wage requirements may be subject to wage claims filed by employees with the Indiana DOL. Additionally, Indiana law allows for potential civil and/or criminal penaltiesfor employers who pay less than the required minimum wage.
Indiana minimum wage for servers and other tipped employees
Per the Indiana DOL, a tipped employee is one who regularly receives tips for services performed and earns at least $30 in tips in any given month. Indiana employers who claim tip credits for servers and other tipped employees must pay employees a minimum wage of $2.13 per hour.
Tip credits are a certain amount of a tipped employee’s wages that can go toward the standard minimum wage of $7.25 an hour. If employees do not make the balance of $5.22 per hour in tips to equal the minimum wage of $7.25, Indiana employers calculate the differences owed and pay the employees accordingly.
Indiana employers can also allow tip pooling . Tip pooling is a practice in which all tipped employees combine their tips into one pool. At shift’s end, the tips are divided equally among all tipped employees. Employers must follow certain guidelines when employees pool their tips.
First, employers must advise employees that they utilize a tip pooling system in advance or prior to an employee starting work. Second, the only employees allowed to receive tips from the pool are those who contributed to the work completed to earn the tips. For example, a dishwasher or floor manager in a restaurant or bar would not be entitled to a portion of the tip pool, but a busser or barback would be entitled, since they performed related work.
Another common practice in the food and beverage industry is the “tip out.” Tipping out refers to a server or other tipped employee giving a portion of their tips to workers who assist in the chain of command, such as bussers, hostesses and barbacks. Whether or not a server or bartender is required to tip out other workers is entirely up to the establishment.
When tipping out is required, the average portion an employee shares is between 20 and 30% of their tips. It’s also important for employers who allow tipping out to ensure the staff members who originally receive the tips don’t dip below minimum wage when sharing part of their earnings with other workers.
Indiana minimum wage overtime pay
Indiana wage law and the FLSA require that employers in the state pay 1.5 times the amount of their regular hourly rate for every hour that exceeds 40 hours in a given workweek. While the state’s overtime requirements don’t provide for workers who work more than 8 hours in one day unless their weekly total exceeds 40, employees with collective bargaining agreements with certain overtime stipulations may be entitled to daily overtime.
Additionally, unless an employee is protected by a collective bargaining agreement or other contract, Indiana employers are allowed to set employee daily hours that exceed the standard 8-hour shift.
Indiana minimum wage FAQs
What states have a $15 an hour minimum wage?
The minimum wage in Indiana is $7.25 per hour, based on the current federal minimum wage. While Indiana doesn’t have a $15-an-hour minimum wage, California, Maryland, New Jersey, New York and D.C. have all passed legislation for workers to be paid at least $15 an hour by 2025.
What is the minimum wage for a 16-year old in Indiana?
The minimum wage for a 16-year old in Indiana is $7.25 per hour, which follows federal minimum wage laws. Most minors aged 17 and under in Indiana must obtain work permits prior to starting employment, and 16-year old employees can only work up to 40 hours during the school week and up to 48 hours during non-school weeks.
What is a livable salary in Indiana?
The livable salary or livable wage in Indiana is $55,583 a year. Living wages per state are calculated with factors that include expenses for housing, health care, basic necessities and education. Living wage standards state that no more than 30% of one’s income should be spent on housing, whether to rent or to mortgage.
What is the minimum a salaried employee can make?
The minimum salary for bona fide exempt administrative, professional, and executive employees in Indiana is $684 per week when paid on a salaried basis.In Indiana, salaried workers are exempt from minimum wage and overtime requirements if they earn over $150 a day and their job duties including the hiring and terminating of employees.
What is the federal minimum wage?
As of 2021, the federal minimum wage is the same as Indiana’s: $7.25 per hour. Employers may opt to pay employees above the minimum, and salaried employees may be exempt from minimum wage laws. The federal minimum wage for tipped employees is $2.13 per hour when combined with employee tips of $5.12 per hour.
