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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.