Overview of Hourly Work and Overtime Regulations in Indiana

Indiana has several state-specific labor laws that are different from those outlined in FALSA (Fair Labor Standards Act). These laws are applicable only when they offer greater protections or rights than federal laws. A worker will go with the law that’s more favorable to them. Most of the time, Indiana employees find the federal level’s wage and hour laws advantageous.

Minimum Wage in Indiana

The minimum wage law in Indiana requires most employees within the state to earn at least $7.25. This is the same rate outlined in the federal laws and may cover a section of workers exempted by FLSA. According to the state law, workers aged 19 or younger are entitled to a training wage of $4.25 per hour within their first 90 days at work.

The minimum wage also covers tipped workers, and employers are required to grant them an hourly base rate of $2.13. If a combination of this amount and what they earn in tips doesn’t reach the $7.25 per hour threshold, you, the employer, will make up the difference.

Notably, you don’t have to raise your staff’s hourly rate unless the contract requires you to do so or there’s a change in the federal or state minimum wage laws.

Exceptions for The Minimum Wage

Minimum wage laws have several specific excerptions. Professional, administrative, and executive workers get a salary, so they are exempt from the regulations. However, this applies to those who earn at least $455 per week. Other great examples include hospital interns, student nurses, some agricultural workers, and minors aged 15 and below.

Overtime in Indiana

Indiana state laws grant most hourly workers the right to a special rate for their overtime pay for the hours beyond 40 hours per week. The Fair Labor Standards Act defines this as any seven successive workdays.

In most states, the laws outline a daily overtime limit that requires employers to provide overtime pay for employees who have worked for more than the stated limit. However, regulations regarding overtime in Indiana don’t specify a daily limit.

Indiana’s Overtime Minimum Wage

The minimum wage for overtime in Indiana is usually one and a half times the amount the worker earns as their standard hourly wage. Based on the minimum wage rate of $7.25 for every regular hour worked, the minimum amount an employee makes per hour as overtime pay should be $10.88. Any amount beyond the minimum hourly wage should be multiplied by 1.5.

Notably, the state laws have special overtime regulations for service or retail businesses, transportation workers, hospital facilities, and personnel who earn based on a piece-by-piece approach.

Overtime Exceptions in Indiana

Whether state-specific or federal, overtime laws are designed to protect workers from exploitation by unethical employers. Those paid on an hourly basis or workers in blue-collar environments are the greatest beneficiaries of these laws. These industries’ nature and limits on working hours by certain careers create lots of specific exemptions to overtime eligibility.

Administrators, executives, and other workers whose weekly income is at least $455 aren’t entitled to overtime pay under FLSA Section 13(a)(1). The law also exempts external salespeople and some IT-related professionals that work on their own hours.

Independent contractors who aren’t legal employees, some transportation personnel, a section of live-in workers like housekeepers, and particular farm and agricultural staff are also not covered.

The Bottom Line

Understandably, it may be challenging to compute accurate amounts for both regular hours and overtime. Fortunately, you can simplify the job by partnering with a knowledgeable team from ASAP Payroll Service with the right skills and tools for accurate payrolls, enhanced timekeeping, and improved productivity.

Request a quote for our customized solutions and comprehensive services to enhance your business.

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Indiana Sick Leave Law and Your Obligations

In today’s legal environment, employees have many questions around sick leave and their access to it. There are no Indiana laws requiring companies to give their employees any type of sick leave as a benefit.  This includes paid and unpaid leave.  As an Indiana employer, you are only required to pay for time worked. (As an aside, it is a valuable employee benefit and could be an important recruiting tool that you may want to consider offering.) Federal law does allow for employees to take job-protected medical leave.    Let’s look at some aspects of Indiana’s medical and sick leave law and the employer’s responsibilities:

If You Promise, Expect to Deliver

If your employee handbook lists unpaid or paid sick leave as an employee benefit, you may be legally obligated to provide it. Handbooks should be regularly updated with current policies.  These updates should then shared with and acknowledged by employees. An employee has a reasonable expectation and right to sick leave if it is listed in the employee handbook. It is wise to review your employee handbook annually and make any needed changes or updates. 

Who Is Eligible for FMLA 

The Federal Family and Medical Leave Act (FMLA) has been in place since 1993. Employees must work a certain number of hours during the year but is guaranteed time off to deal with:

  • their own serious illness
  • birth or adoption of a child
  • the serious illness of a spouse, parent or child
  • to cover emergencies related to spouse, parent or child’s military service

FMLA guarantees that the employee can return to their job or an equivalent job within the company at the end of the leave. Employees also have the option of taking the leave intermittently in the event of periodic medical appointments or treatments that require time at home for recovery.

FMLA requires that the employee fill out an application ahead of the event if possible. This form will require certification from an attending physician for a medical leave. The leave may or not be a paid medical leave because it is independent of and runs concurrently with, the employers’ sick leave policy. Returning employees will also need a release from the physician confirming that they are well enough to return to work. Any employee medical insurance will continue as if the employee was working. Employees of the state of Indiana can access information regarding sick leave at the state’s website

Implications of COVID-19

The Families First Coronavirus Response Act (FFCRA) puts additional burdens on employers.  You need to be sure you are correctly providing additional sick leave for employees to care for themselves or loved ones suffering from COVID-19. State and local governments may have their own requirements for sick pay while an individual is:

  • under quarantine because of exposure
  • caring for a family member
  • battling the virus themselves

What’s In A Record?

Accrual and recording of sick leave, and employment and payroll records in general, is a complicated endeavor. It needs to be done according to state and federal — not to mention local — regulations in order to protect your company from litigation. Record keeping requirements are complex and varied, and they are also subject to change. When you are running a business, it’s no small task to also keep up with employment records and the ever-changing landscape.  

Our expertise will allow you to focus on what you do best, and leave the minutiae and details to us. We are here to make your medical leave and payroll record keeping a seamless and smooth process, thereby protecting your company from any risk. After all, you can’t provide or account for what you may not know. We offer SaaS-based payroll services to simplify your life. Please contact us today to see how we can help. 

Sick Leave Laws: Are There Laws Against Working While Sick?

According to Indiana sick leave laws, no employer is required under law to provide paid or unpaid sick leave to their employees. However, many employers give it as part of the employee benefit. Minor illnesses like flu are not part of the sick leave laws that provide legal protection against working while sick under federal law. Disability or severe medical conditions that present non-typical health complications or make a worker feel very sick are addressed under sick leave laws.

Laws concerning working while sick

Safety Violation

An illness or a particular medical condition can make the working environment unsafe. OSHA, a federal agency that deals with safety violations, will offer legal protection if there are safety concerns and your workers cannot report for duty. Workplace safety laws require that you grant sick leave to employees who cannot report to work, especially if they suffer from a contagious illness. Some industries, like health or food service sectors, are particularly more concerned about working while sick. Other non-regulated industries may also require workers not to report to work if they are ill.

Small Employer

The American With Disability Act will not offer any legal protection if an employer has a maximum of 14 employees. Unless the local laws of a specific state cover the employer, it means that there is no legal protection against working with a disability for a small employer. The Family and Medical Leave laws will protect employers with 50 employees and above within a radius of 75 miles. This means that if you have less than 50 employees, the Family and Medical Leave laws will not offer you any protection for serious conditions due to disability.

Serious Medical-Condition

Family and Medical-leave laws allow up to 12 weeks of sick leave for a serious medical condition. The law applies if an employer has a minimum of 50 employees within a radius of 75 miles. It also states that an employee must have worked for at least one year and 1250 hours within a year. This means that there are sick leave laws that protect in cases of severe medical conditions. However, there are specific conditions that have to be met.

According to the department of labor, the term “serious” has specific definitions. For example, “serious” means a period of treatment due to patient care in a hospital, hospice, or medical facility. It can also be a period of incapacity, among other definitions. You must understand these definitions before allowing a paid sick leave or unpaid sick leave.

Disability

An employer with 15 employees and more covered by the American With Disability Act must provide reasonable accommodation to workers with a disability. An example of reasonable accommodation could be allowed time off in case of illness related to the disability. The law, in this situation, offers protection as long as there is sufficient evidence that an employee has a disability. It is essential to familiarize yourself with the specific definitions of the term disability.

Final Thoughts

Some laws provide protection against working while sick as long as the situation meets certain conditions. In such cases, an employer should grant sick leave. If the situation does not meet these specific conditions, then you are under no legal obligation to grant sick leaves. However, you are at liberty to give sick leave as a work benefit. Laws regarding sick leave can be complex and present a tough topic. Employees need support during leave time, and at the same time, the work environment is competitive. ASAP Payroll helps companies navigate difficult topics like this. Contact us today for more information.

An HR Team’s Guide to Paid Sick Leave

Poor health is bad for your employees’ productivity. What’s more, sick employees risk spreading the disease around, putting more of your employees at risk. They need some time off to recover, and they could do with some compensation to ease the financial burden. So, how should you go about granting your employees paid sick leave? Here is a brief guide on how HR teams can develop and implement policies regulating paid sick leave.

Indiana Sick Leave Law

The federal and state governments have rigid laws against working while sick, and Indiana’s sick leave law is clear. The state law does not require employers to provide employees on sick leave with any benefits. However, it still mandates that employees should be granted sick leave for a range of reasons. Some of these reasons include:

  • The employee is too ill to come to work.
  • The employee has a sick close relative that they have to cater to.
  • The employee has an immediate family member on active military duty and needs their support (this is a qualifying exigency that qualifies the employee for emergency paid sick leave).

The law requires that the employee prove that they are sick (or someone close to them needs them) by getting a doctor’s confirmation. However, some companies have policies that allow employees to take sick leave at their discretion.

Will Emergency Paid Sick Leave Under FFCRA Return in 2021?

Paid sick leave law has recently come under the spotlight since the start of the COVID-19 pandemic. To this end, lawmakers established the Families First Coronavirus Response Act (FFCRA) to help employees impacted by the virus.

However, that mandate has since expired, and complying with the act is now a voluntary option. Authorities are exploring a way forward on this mandate, and it may be enacted again if the pandemic is not contained soon.

However, other laws protecting sick leave are still in force, including the Family and Medical Leave Act (FMLA). These laws protect the employee’s job for the duration of their sick leave. They also determine when and how much employees should be paid for the duration.

For example, federal law states that an employee on sick leave should be paid per hour for at least every 30-40 hours worked. Additionally, the law also puts a limit on the number of hours that an employee should spend on sick leave. To this end, an employer can fire an employee who takes more than 90 days of sick leave.

Company Policy on Paid Sick Leave

It is important to consider state and federal laws when developing the company’s policy on paid sick leave. However, you can customize your policy however you like.

For example, it is recommendable to demand proof justifying a paid sick leave. It is also recommendable to decide compensation based on the employee’s position and experience with the company.

It is advisable to make your policy regarding paid sick leave both fair and stern. It should be stern to deter employees who want to take paid sick leave when they don’t really deserve it. It should also be fair to guarantee your employees’ health and wellness – your employees need to be healthy to remain productive, after all.

Final Thoughts

It is essential to take good care of your employees to keep them productive. This entails giving them some time off to rest when they fall sick – and perhaps offering some compensation to keep them motivated. As such, reference state and federal sick leave law and clearly spell out the company’s policy to ensure that only employees who deserve paid sick leave get it. Please contact us today to see how we can help.

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.

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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.