The Frequently Asked Questions (FAQs) About the Indiana Workers’ Compensation

workers compensation

Every year, employees in any occupation get injuries or become sick due to factors beyond their control. Statistics by the BLS indicate that the private industry alone reported more than 2.8 million work injuries (non-fatal) in 2019.

In 1915, the Indiana General Assembly approved the Worker’s Compensation Act, which is in effect up to date. The Act creates a system that regulates the provision of benefits to the injured or sick workers. If you are an employer, it is safe to be conversant with the Act to avoid legal issues. Unfortunately, most people find it difficult and confusing to understand the Act. Below are the frequently asked questions about Indiana Workers’ Compensation.

Who Qualifies for Workers’ Compensation Benefits?

Employees are eligible for worker’s compensation if injuries or illnesses occur while on duty. If it occurs when they are off duty, they don’t qualify for the compensation. 

Does the Workers’ Compensation Act Cover the Independent Contractors?

The Indiana workers’ compensation does not cover independent contractors.

What Action Should a Worker Take after an Injury?

The worker must notify the employer about an injury any time before the 30th day; otherwise, they may deny your claim. For the best of your interests, ensure you report immediately you get an injury. It allows sooner commencement of your compensation benefits.

What Happens If The Worker Has To Stay Out Of Work Due To Injury?

If you have to stay out of work for one day or more, the employer must fill and send the Employer’s Report of Injury form to you and the insurance company within seven days.  The insurance company has to file the report with Indiana Workers’ Compensation Board.  Additionally, the insurance company must either accept or deny the claim within 29 days.

Does the Act Cover a Minor?

The Indiana Workers’ compensation act covers minors who are below 17 years at the time of injury. The minor could even receive double benefits if there were an infringement of the Indiana labor law.

Does the Act cover Psychological Injuries?

Yes, provided the psychological injuries arise during the employment tenure. The injured worker has to undergo thorough psychological tests to prove that.

What if an Employer Denies The Claim?

The workers can pursue an appeal if the employer denies the claim or where the insurance company disputes any portion of the claim. The process involves filing an Application for Adjustment form with the Workers’ Compensation Board of Indiana.

After that, a hearing is held, and the workers’ compensation judge issues a written decision. If an employee doesn’t agree with the Judge’s decision, they have 30 days to file an appeal with the full board.

Who is Subject to Litigation?

The workers should use the Indiana Workers’ compensation if the injury occurred in Indiana. Rather than suing the employer, they may consider other settlement options other than workers’ compensation. Manufacturers, other contractors in the workplace, or particular safety supervisors could be subject to liability depending on the injuries.

Do Employers have to reveal their Worker’s Compensation Carrier?

It is a requirement that the employers display the details of their insurance carrier, including name, telephone line, and address, in a conspicuous location. If employees can’t find the information, the Act requires them to reach out to the Indiana Workers’ Compensation Board.

Reduce Compliance Risk!

Accurate timekeeping is among the most crucial aspects of a successful business. That is why every employer should consider investing in an automated timekeeping system for organization survival. This powerful savings tool eases the arduous task of manual time recording. It reduces paperwork, costs, errors, and compliance risk while maximizing efficiency and increasing labor-related savings.

ASAP Payroll can assist you in devising a system that suits your needs. Contact us at (317) 887-2727 or visit our site for more information. 

Will Indiana’s Minimum Wage Increase in 2021?

Minimum Wage

In the United States, each state is allowed to set its own minimum wage or follow the Federal minimum wage.  Indiana is one of 21 states that uses the Federal minimum wage as their state minimum wage, currently at $7.25 an hour.  In Indiana, employers that have two or more employees must pay at least the minimum wage. 

Will Indiana increase its minimum wage this year? 

The short answer to that question is probably not. 

Most states increase their minimum wage based on calculations and estimations made through the consumer price index. Indiana had not raised the state minimum wage since 2009, when it increased by $.70 from $6.65 to $7.25.

How do the Indiana State Minimum Wage Laws work?

The Indiana Department of Labor administers the minimum wage and overtime provisions of the Indiana Minimum wage law. 

The Indiana Minimum Wage Law generally requires employers to pay employees at least the minimum wage for all hours worked and 1.5 times their regular pay rate for overtime when they work more than 40 hours per week. 

Indiana law requires that every employer subject to the Indiana Minimum Wage Law must furnish every employee a statement of the hours they worked, the wages that were paid, and a list of the deductions made.   

Exceptions to Indiana’s Minimum Wage in 2021

Here are the exceptions to Indiana’s minimum wage:

  • Tipped employees in Indiana must be paid a minimum of $2.13 an hour with tips making up $5.12, in total equaling Indiana’s state minimum wage.
  • New employees can receive a training wage of $4.25 an hour for the first 90 days of employment. However, employees must be under 20 years old. 
  • Full-time students can be paid at least 85% of the state minimum wage, which is about $6.16 per hour. Students eligible for this wage must work 20 hours a week or less and are classified as a full-time student.

What Factors Affect Changes in Minimum Wage?

Minimum wage rates are determined by poverty threshold, prevailing wage rates as determined by the Labor Force Survey, and socioeconomic indicators such as inflation, employment figures, and gross regional domestic product.  This ensures better worker protection. 

So, Will Indiana Increase Its Minimum Wage This Year?

In 2018 a bill was introduced to the Indiana General Assembly to increase the state minimum wage from $7.25 an hour to $10 an hour starting June 30, 2021.  It would increase to $13 an hour by 2022 and $15 an hour by 2023.  It did not pass.

In 2019, there were three proposals to increase Indiana’s minimum wage.  One suggestion would increase the wage to $9 an hour after December 31, 2019, then increase $.50 per year until it becomes $12 per hour in 2026. 

The second proposal would increase the minimum wage to $11.12 an hour, but it would not start until July 2020. 

A third proposal would increase the minimum wage to $15 an hour as soon as July 2020.  The minimum wage would increase annually based on the increases by the Consumer Price Index for the preceding year. 

None of these bills progressed any farther.  

In January of 2021, another bill was proposed to raise Indiana’s minimum wage to $10 an hour.  So far, in 2021, 20 states have increased their minimum wage.  As of this writing, the bill is in its early stages. 

They are also having problems raising the Federal minimum wage.  President Biden is trying to get legislation passed for a $15 an hour federal minimum wage, but it’s on hold for now.  Critics say raising the minimum wage could force employers to cut jobs.  They say it would especially hurt teens and less educated workers. 

Based on these recent trends, and concerns, it doesn’t look like Indiana will increase its minimum wage anytime soon. 

Where to Look for More Information

If you want more information on Indiana’s Minimum Wage Laws, here are some resources:

If you need help managing your payroll, contact us today to give you peace of mind.  

Indiana Overtime Laws for Salaried Employees: Everything You Need to Know

overtime labor laws

The Indiana Overtime law also referred to as the Indiana Minimum Wage Law, echoes the Federal Fair Labor Standards Act (FLSA) in multiple ways. The two require employees to receive 1½ times their regular hourly pay rate as overtime from their employers, for all hours they work above forty hours during a workweek.

However, there are some significant differences between the two laws. According to the Indiana overtime laws for salaried employees, an individual has a right to get overtime pay if the number of employees under the same employer exceeds 40. On the other hand, the federal law does not specify a threshold on the number of employees but instead points out to employers with a gross income of 500,000 dollars.

The Indiana overtime laws for salaried employees and federal laws also differ in the statute of limitations. Under Indiana law, the employee has a maximum of three years to collect the unpaid overtime money from the date of earning. On the other hand, the Federal law sets the period at two years and a maximum of three years if the employer was deliberately infringing the overtime legislation.  

Exemptions

Careers differ in their working hours and the nature of the work environment. Therefore, you find that the eligibility to overtime in Indiana has a wide variety of exemptions. Depending on the employee, they could be exempt or non-exempt. Exempt employees are ineligible for overtime pay.

The major exemptions cited in the Federal overtime law are similar to those in the Indiana overtime laws for salaried employees.  Exempt employees are in four main categories. A job that fits into one of them means that the Indiana and Federal overtime laws do not protect the specific employee working in that position.

• Executive

If the full-time responsibility of a job is to manage at least two employees, it lies in the category of executive position.

• Administrative

If the job’s primary responsibility is non-manual activities such as management policies, administrative training, or business operations, it falls in the administrative position.

• Professional

A job in this category involves one where the main responsibilities require advanced knowledge and extensive education. It includes positions such as skilled computer experts, certified teachers, and artists.

• Outside Sales

Suppose an employee’s main responsibilities are to make sales or deliver orders to places outside the employer’s workplace. In that case, their job is in the category of an outside sales position.

As an employer, you should note that employees whose positions fall under the above categories are not eligible for an overtime premium according to the Federal and Indiana labor law. These laws majorly protect the hourly wage earners, especially those in blue-collar industries, due to high vulnerability to exploitation. The objective is to cushion workers from exploitation by employers.

Penalties

Although overtime may be appropriate during the peak periods, employers must monitor and control overtime levels to slash excessive use. Besides, failure to adhere to the overtime legislation may lead to penalties and accrued overtime payments.

Employers who intentionally fail to pay overtime are subject to liquidated damages. That provision is the same in both the Indiana overtime laws for salaried employees and federal overtime law. Liquidated damages involve a requirement to pay an extra amount of money equal to the owed amount to punish the employer.

Final Thoughts

Regardless of the size of a business, overtime costs can have a lot of financial impacts. Dependence on manual tracking of employees is inefficient, and you might find yourself out of compliance. That is why companies are keen to avoid overtime by integrating payroll and timekeeping services. It is a cost-effective system that reduces overheads and increases data accuracy, allowing real-time tracking of employees.

Contact ASAP Payroll today at (317) 887-2727 or visit our site for more information.

How Indiana Labor Laws Regarding Vacation Pay Can Affect Your Business

labor laws

As an employer in the state of Indiana, you are not required to offer paid or even unpaid vacation time to your employees.  That being said, there are some laws that govern vacation pay and how it is administered.  If you currently do not have a vacation policy in effect, there are a few things that you may consider.  

Why Paid Vacation is Important

Most employers offer two weeks, or ten days paid vacation for employees.  Not only are vacations good for the employee’s physical and mental health, it is also a great morale booster and an effective recruiting tool.  Employees who enjoy more of a work/life balance, are more productive, motivated, and have fewer problems with attendance and other performance issues.  

Indiana Labor Laws and Vacation Pay

Also known as Paid Time Off (PTO), employers in Indiana are not required to offer vacation, sick, holiday, or personal days, but if any of this is offered, there needs to be a written policy or contract defining how vacation is accrued, paid, or not paid.  It is important that your policy be well-defined and clearly understood.

  • Separation From the Company 
    • If your vacation policy states that upon separation, accrued vacation is paid to the employee, by Indiana Labor Laws, it must be paid upon separation.  If your policy states that upon separation, accrued vacation is forfeited, the employee, by Indiana Labor Laws, will not be paid.  However, if there is no provision in the policy or contract, by law, the employee will be paid his accrued vacation upon separation.  
  • Vacation Accrual Cap
    • As an employer, you can lawfully cap the amount of paid vacation that your employees accrue.  However, this has to be stated within your company policy, handbook, or contract.  Failure to define the cap could result in uncapped payment.  
  • Use It or Lose It
    • Some companies have a policy on using or not using accrued vacation.  If the employee does not use the vacation time in a certain amount of time, he forfeits the paid leave.  By Indiana Labor Laws, the Use it or Lose it policy is legal, so long as it is written and well-defined in the company policies or employee contracts.  Provision must also be made for the employee to have the time available to him for this statute to apply.

Indiana Vacation Pay Compliance

Indiana Labor Laws leave plenty of room for employers to be flexible with their policy on vacation leave.  Employers can either offer paid or unpaid vacation time, or not offer any type of vacation time off.  They can choose the rate of accrual, such as accrual of one day per month, or ten days after one year of employment.  Employers can also choose to pay or withhold accrued vacation upon an employee’s separation.  Companies can set limits on accruals, or set policies for how not using your vacation time is handled. 

The primary takeaway is that policies or contracts need to be clearly defined so that the expectation of both the employer and employee are the same.   If you currently do not have a policy in place, be sure to consider how any changes would affect current employees. Also be sure that they are counseled on the policies before they go into effect.  

At ASAP Payroll, we offer full service payroll, human resources, and recruiting services, as well as many other additional functions that can help your business run smoothly.  Contact us today to see how we can help.