Employment and labor laws in Indiana [Updated 2023]

Employment and labor laws serve an important purpose: they protect employees from unsafe working conditions. While federal laws exist, states—and even counties and cities—often create their own legal protections for workers. These are constantly changing, and it’s up to employers to stay on top of them to keep employees safe.

Indiana is less strict than some states and defers to many of the existing federal protections. But that doesn’t mean employers in Indiana are off the hook—it’s still crucial to know and understand the laws that do exist in the Hoosier State.

If you’re looking for an easier way to stay compliant, Rippling’s Professional Employer Organization service takes away all the guesswork by handling your tax registration and management—freeing you up to focus on scaling your business in Indiana and beyond.

Employment vs. labor law: What’s the difference?

While the terms "employment law" and "labor law" are often used interchangeably in everyday conversation, they are distinct areas of law with unique purposes.

The key difference between employment and labor law boils down to the parties involved. Employment law concerns the rights and relationships between employers and individual employees, while labor law concerns the collective rights and relationships between employers and groups of employees—usually represented by unions.

• Employment law covers anti-discrimination laws, wages and hours, leave policies, workplace safety, termination and hiring practices, employee benefits and compensation, etc.
• Labor law is a subset of employment law that covers the rights of employees to form and join unions, the process and rules around collective bargaining, and other activities.

Wages and hours in Indiana

When it comes to laws regarding wages and hours, Indiana doesn’t have many specific state regulations—instead, it mostly tracks with federal laws.

Minimum wage in Indiana

The minimum wage in Indiana is the same as the federal standard: $7.25 per hour.

Indiana has a lower minimum wage for tipped employees: $2.13 per hour. However, if tipped employees don’t earn at least $7.25 per hour in wages plus tips, their employer must make up the difference.

Indiana’s minimum wage law allows for a training wage that’s lower than the federal minimum wage rate: $4.25 per hour. This can be paid if the employee is under 20 years of age and only for the first 90 consecutive days of their employment.

Rippling offers an easy way to stay compliant with minimum wage rules. Rippling automatically flags any minimum wage violations based on the state where the employee is located, making sure you’re always in compliance with local regulations.

Overtime pay in Indiana

Indiana’s overtime rules come from the Fair Labor Standards Act (FLSA), a federal law. According to the FLSA, any employee who works more than 40 hours in a workweek, unless exempt, is entitled to overtime pay at 1.5x their regular rate of pay.

Categories of workers under exemptions from overtime in Indiana include:

• Executives, professionals, and administrative staff
• Outside salespersons
• Seasonal staff at amusement and recreation establishments
• Certain commissioned employees
• Taxi drivers

When you pay employees with Rippling's payroll software, it’s easy to adhere to overtime rules—Rippling automatically applies the correct overtime rate when an employee steps into overtime territory.

Pay transparency in Indiana

Pay transparency laws are gaining traction in some states, requiring employers to disclose salary ranges to job candidates to prevent wage disparities based on age, gender, and race.

While some states—like California, Washington, and Colorado—have already passed laws requiring pay transparency, others are still considering legislation. However, Indiana has no law on the books and isn’t currently considering any pay transparency legislation.

Rippling enforces compensation bands during onboarding and automatically flags out-of-band adjustments, giving you the ability to approve or block cases as needed.

Breaks and rest periods in Indiana

Indiana follows federal laws when it comes to breaks during the workday. Private employers are not required to provide either rest or meal breaks. However, if an employer has breaks listed as an employee benefit, then breaks lasting less than 20 minutes must be paid.

Minors are an exception. If they have shifts lasting for six or more consecutive work hours, they’re required to have one to two rest breaks totaling at least 30 minutes.

Leaves of absence in Indiana

Whether an employer is required to allow leave (and pay an employee for the time they aren’t at work) depends on the reason for the leave. 

Employers in Indiana aren’t required to provide any time off (paid or unpaid) for vacations, bereavement, or for employees to vote.

They are required to allow time off for:

• Jury duty leave. If an employee receives a jury summons, their employer must allow them as much time off as they need to serve on the jury without retribution.
• Military leave. Eligible employees with family members in the military can take up to 10 unpaid days per year during these periods:
• 30 days before active duty orders take effect
• When the family member is on leave from active duty
• 30 days after active duty orders end
• Family and medical leave. Under the Family and Medical Leave Act (FMLA), employees are entitled to up to 12 weeks of unpaid leave following certain major life events.

Keep in mind that all of these types of leave are unpaid and employees cannot be terminated under these circumstances.

Pregnancy disability leave in Indiana

There is no specific law pertaining to pregnancy disability leave in Indiana. Pregnant employees can take unpaid leave under the FMLA.

In 2021, Indiana enacted the Pregnancy Accommodations Law, which applies to workplaces with at least 15 employees and allows pregnant workers to seek reasonable accommodations from their employers. Employers are not required to provide the accommodations, but they must respond in a reasonable time and cannot discipline, terminate, or retaliate against their employees for seeking or using accommodations.

Paid sick leave in Indiana

There are no laws that require paid or unpaid sick leave for employees in Indiana.

Rippling is the easiest way to automate and customize your leave policy—and it gives you full visibility into how your employees are using it.

Workplace safety in Indiana

Most employees who work for private companies in Indiana are covered by the Indiana Occupational Safety and Health Administration (IOSHA). In case an employee isn’t covered by IOSHA, they are protected by the federal Occupational Safety and Health Administration (OSHA).

IOSHA generally follows the same occupational safety standards as OSHA, which protects workers when they engage in potentially dangerous jobs or risk exposure to dangerous materials, including:

• Hazardous machinery
• Chemicals, including lead, crystalline silica, hexavalent chromium, and combustible dust
• Shipbreaking
• Trenching and excavation

IOSHA includes a few areas that are unique to Indiana:

• Fall hazards
• Renovation, rehabilitation, and demolition
• Residential construction projects

Indiana also has a Smoke-Free Air Law, which prohibits smoking in certain public spaces, including:

• Most places of employment
• Most public spaces
• Restaurants
• Within eight feet of the public entrance to any public building or place of employment
• Any vehicle leased, owned, or operated by the state if the vehicle is used for a government function

Rippling PEO offers pay-as-you-go workers’ comp, so you don’t have to pay upfront for the entire year. Instead, you can focus on scaling your business in Indiana and elsewhere in the US.

Discrimination and harassment laws in Indiana

There are a few different laws that prevent discrimination in hiring and workplace practices in Indiana.

The Indiana Civil Rights Law (ICRL) applies to employers who have six or more employees within the state of Indiana and prohibits discrimination against employees on the basis of:

• Race
• Religion
• Color
• Sex
• Disability
• National origin
• Ancestry
• Veteran status

The Indiana Employment Discrimination Against Disabled Persons Act (IEDADPA) is applicable to employers with 15+ employees and prohibits discrimination against qualified individuals who have disabilities. It also mandates that employers provide reasonable accommodations for workers with disabilities.

The Indiana Age Discrimination Act (IADA) applies to employers with at least one employee, but it doesn’t apply to employers who are subject to the federal Age Discrimination in Employment Act (ADEA). The IADA prevents discrimination against employees who are between 40 and 74 years of age.

In Indiana, workplace harassment based on protected characteristics like gender, age, disability, and race is also illegal. The Indiana Civil Rights Commission describes workplace harassment as “any unwelcome verbal, written, or physical conduct that shows hostility or aversion towards a person on the basis of their protected characteristics.” This can include offensive jokes, insults, racial or sexual slurs, and any unwanted physical contact—essentially anything that can interfere with an employee’s well-being and performance at work.

However, it’s important to note that a one-off incident doesn’t necessarily constitute illegal workplace harassment. According to federal civil rights laws, illegal harassment is when an employee is expected to tolerate this type of behavior as a condition of employment or when it creates a hostile work environment.

While Indiana doesn’t have any requirements for sexual harassment training for non-government workers, it’s important to note that under federal law, employers aren’t just liable for the discrimination and harassment they commit—they’re also responsible for the words and actions of their employees, even if they don’t know about incidents when they happen.

Rippling’s Learning Management System is pre-loaded with core sexual harassment training courses to ensure that all employees are aware of their state’s laws, regardless of where they live.

Unions in Indiana

Labor unions are groups of employees who join together to increase their bargaining power (or “act collectively”) to obtain better working conditions, higher wages, better benefits, and more. Under the National Labor Relations Act (NLRA), all US employees are guaranteed the right to:

• Organize or join a union and negotiate working conditions with their employer
• Bargain collectively for their work contract by choosing employee representatives
• Discuss their wages and other employment terms with their coworkers
• Take action to improve their working conditions, including filing complaints with their employer or the government, seeking help from a union, or striking and picketing

The NLRA also makes it illegal for unions to threaten employees’ jobs or retaliate against them in any way if they don’t support the union. Similarly, the law says employers can’t prohibit, discourage, bribe, fire, demote, or threaten employees who support a union.

There are also state-level labor laws that pertain to unions. Indiana is a right-to-work state, which means that employers can’t make employees join a union as a condition of their employment or stay in a union if they don’t want to.

FAQs about Indiana labor and employment laws

Are independent contractors covered under Indiana employment laws?

Generally, no. Independent contractors aren’t entitled to leave or benefits. Their right to unionize isn’t typically recognized under the NLRA, and self-employed workers aren’t covered by OSHA. Independent contractors are likely also not protected by Indiana’s anti-discrimination laws, though this hasn’t been tested in court.

Does at-will employment exist in Indiana?

Yes. Indiana follows employment-at-will rules, which means that employment can be terminated at any time, by either party, and for any cause. No notice or reason is required.

What privacy rights do employees have in Indiana?

Historically, Indiana has had limited privacy protection for employees. The Indiana Wiretap Act prohibits employers from intercepting, disclosing, or using employees' computer or telephone communications without the consent of at least one party involved.

In 2023, Indiana’s governor signed the Indiana Consumer Data Protection Act (INCDPA), a comprehensive consumer data privacy law that follows in the footsteps of states like California and Colorado. Notably, though, employment-related data is excluded from the Act.

Are background checks legal in Indiana?

Yes. Background checks that do not inquire about criminal histories during the initial job application are allowed. 

Sometimes background checks are even mandated, such as when the potential employee will be working:

• In a childcare facility
• In a home health agency
• In a personal services agency
• As a school teacher

Are whistleblowers protected in Indiana?

Indiana law protects whistleblowers when they:

• File a complaint or offer their testimony in a proceeding regarding workplace safety
• Participate in an investigation or proceeding regarding fraudulent claims or fraud against the state
• Report or participate in an investigation or proceeding regarding physical or financial abuse of an endangered adult
• Report a violation of state or federal law or misuse of public resources

Employers cannot fire or discriminate against whistleblowers. If they do, they risk fines, legal action, and investigation by the Indiana Department of Labor.

Is workers’ compensation coverage required in Indiana?

Yes. Workers’ compensation is required in Indiana. If an incident occurs, employees must submit a claim within 30 days to be eligible for two-thirds of their weekly wage. Employers can’t terminate an employee for filing a workers’ compensation claim. 

Are there required healthcare benefits in Indiana?

Under federal law, employers with less than 50 full-time employees are not obligated to provide healthcare benefits. Employers with 50+ full-time employees must provide healthcare that is affordable and meets ACA coverage requirements.

Are Indiana employers required to provide bereavement leave?

Indiana employers are not required to provide bereavement leave for their employees.

What employee protections are available in Indiana if layoffs occur?

Most businesses with over 100 employees are protected by the federal Worker Adjustment and Retraining Notification Act (WARN), which requires them to give employees a 60-day notice before being laid off.

Employees who are laid off in Indiana are required to receive their final paycheck no later than the next scheduled payday. There are no rules in Indiana requiring employers to pay for unused benefits.

What child labor laws exist in Indiana?

Indiana has complex state laws to protect underage employees. Minors under 16 years old can work up to 18 hours per week during the school year or 40 hours per week between June 1 and Labor Day. Teens aged 16-17 can work up to eight hours on a school day or nine hours with a parent’s permission—and 17-year-olds can work up to 48 hours on non-school weeks. Minors aren’t allowed to work certain hazardous jobs, including manufacturing, mining, construction, and more.

Disclaimer: Rippling and its affiliates do not provide tax, legal, or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any related activities or transactions.