Indiana Minimum Wage 2026 and Employer Wage Rules
Indiana Minimum Wage 2026 and Employer Wage Rules
If you employ anyone in Indiana, wage rules are the first compliance job you have. Indiana's statute is short, but it has exceptions, tip rules, and recordkeeping duties that catch small employers off guard. This guide starts with what Indiana requires you to do as an employer, then walks through the minimum wage figures, the overtime rules, and the points we could not confirm and you need to check with the state before you rely on them.
What Indiana Employers Must Do
Start with the duties. Whether or not you are sure which law covers a given worker, plan on doing the following for every employee you pay:
- Pay at least the minimum wage for all hours worked. Indiana's rate is $7.25 per hour, with the tipped, training, and exception rates described below.
- Pay 1.5 times the regular rate for hours over 40 in a workweek, unless a listed exception applies.
- Give each employee a written statement of hours worked, wages paid, and deductions. Build this into every pay cycle, not just at year end.
- Display the Indiana minimum wage poster if your business is subject to the Indiana Minimum Wage Law.
- Pay men and women on the same basis. Indiana's law prohibits pay discrimination on the basis of sex.
- Keep accurate time and pay records. Without them you cannot prove what you paid, and you cannot answer a wage complaint.
These duties apply in addition to whatever the federal Fair Labor Standards Act requires. Knowing which law applies matters less than knowing that the stricter rule governs when both do.
Indiana Minimum Wage 2026: The Rate and Who It Covers
The indiana minimum wage is $7.25 per hour. That matches the federal minimum wage, and the state rate has not changed since July 24, 2009. The Indiana Department of Labor's Minimum Wage Law poster states the rate and the coverage rules, and it is the document you are expected to post.
Most Indiana employers and employees are covered by the federal Fair Labor Standards Act. The Indiana Minimum Wage Law applies to those not covered by federal law. Where both laws reach the same worker, the higher standard governs. In practice that means the federal and state figures are the same at $7.25, but the state rules on overtime exceptions and tip credit still have to be read separately.
The table below summarizes the wage figures Indiana sets. Confirm each figure against the Department of Labor poster before you build it into payroll.
| Pay category | Indiana rate | Conditions |
|---|---|---|
| Standard minimum wage | $7.25 per hour | All hours worked, unless a lower category below applies |
| Tipped employee (cash wage with tip credit) | At least $2.13 per hour | Only if the employer claims a tip credit; employer covers any shortfall |
| Training wage | $4.25 per hour | Employees under 20, for the first 90 consecutive calendar days with the employer |
| Overtime | 1.5 times the regular rate | Hours over 40 in a workweek, subject to listed exceptions |
Indiana Overtime Law: Rules and Exceptions
The indiana overtime law requires pay at 1.5 times the regular rate for hours over 40 in a workweek. The Indiana Minimum Wage Law lists many exceptions, found at IC 22-2-2-3(a) through (p). Do not assume a worker is exempt because they have a salary, a manager title, or a job you think of as professional. Read the statute section that matches the worker's actual duties, and document why each exemption applies.
Two practical points cause the most trouble. First, the workweek is the unit of measurement, so overtime is figured week by week, not averaged across a pay period. Second, the regular rate is not always the hourly figure on the offer letter. If you pay bonuses, shift differentials, or certain allowances, those can change the regular rate, and you should check how they are treated before you calculate the overtime premium.
Tipped Employees and the Tip Credit
Indiana allows an employer to pay a tipped employee a lower cash wage, but only if the employer claims a tip credit. Where that applies, the cash wage must be at least $2.13 per hour. If the employee's tips do not bring their total pay up to the full minimum wage, the employer must make up the shortfall.
Do not claim the tip credit by default. Before you do, confirm that your tip records are accurate, that employees know the rate they are being paid, and that you can show the shortfall calculation for any pay period where tips fall short. A tip credit without that paperwork is the first thing an investigator asks about.
Training Wage for Workers Under 20
Indiana sets a training wage of $4.25 per hour for employees under 20, for the first 90 consecutive calendar days with an employer. After that period, the employee must be paid the standard minimum wage. Track the start date for every young hire. The 90 days are consecutive calendar days, so a gap in employment or a change of status should be documented, not guessed at.
Indiana Employment Law: Records, Poster, and Pay Equity
Beyond the rates, indiana employment law asks for three things that are easy to skip. The first is the written statement of hours worked, wages paid, and deductions. Give it to each employee, and keep a copy in your own records.
The second is the Indiana minimum wage poster. If your business is covered by the Indiana Minimum Wage Law, the poster must be displayed where employees can see it. A current copy from the Department of Labor is the only version to post.
The third is pay discrimination. The Indiana Minimum Wage Law prohibits paying employees differently on the basis of sex. Review pay bands for comparable jobs, and make sure any pay difference has a documented, non-sex-based reason before the next performance cycle.
Penalties under Indiana's wage law are both civil and criminal. The statute does not make a missed record or a late poster a small matter, so treat the paperwork as part of the wage obligation itself.
Indiana Paid Sick Leave: What We Could Not Confirm
Many readers searching for indiana paid sick leave want a yes or no answer. We do not have a verified one. The Indiana Department of Labor's minimum wage poster does not address paid sick leave, and we have not confirmed from an official source whether any state paid sick leave requirement applies to your business.
Until you confirm the answer, do not assume either way. Call or email the Indiana Department of Labor Wage and Hour Division at [email protected] or (317) 232-2655 and ask whether any paid sick leave requirement applies to your industry, size, and workforce. Get the answer in writing if you can. If you already offer paid sick leave as a benefit, your written policy creates obligations of its own, whatever the statute requires.
Building the Wage Section of Your Indiana Employee Handbook
An indiana employee handbook is where your wage rules become something employees can actually follow. Keep the wage section specific. At a minimum, cover the following:
- Pay schedule and method. State how often employees are paid and how pay is delivered.
- Timekeeping. Explain how hours are recorded, who approves them, and that off-the-clock work is not permitted.
- Overtime. State the 1.5 times rate for hours over 40 in a workweek, and explain who may authorize overtime.
- Tip policy. If you claim a tip credit, say so, explain how tips are recorded, and state how any shortfall is paid.
- Training period. If you use the training wage for workers under 20, describe the 90-day period and when the standard rate begins.
- Pay statements and deductions. Describe the written statement of hours, wages, and deductions and how employees can ask about it.
- Sick leave. Leave this as a placeholder until you confirm the Indiana position with the Department of Labor. Then write the policy you actually intend to follow.
Have an employment attorney review the handbook before you distribute it. A handbook that promises more than the law requires, or less than the law demands, creates problems on both sides.
Where to Get Answers
For questions about Indiana wage rules, contact the Indiana Department of Labor Wage and Hour Division at [email protected] or (317) 232-2655. For business registration questions, such as whether your entity name or structure is set up correctly, use the Indiana Secretary of State, Business Services Division at https://www.in.gov/sos/business/. For general small business planning, the Indiana Small Business Development Center is at https://isbdc.org/.
Important Disclaimer
This guide is informational content about Indiana wage and hour rules. It is not legal or tax advice, and it does not create an attorney-client relationship. Wage and hour rules have exceptions, and the facts of your workforce determine which rules apply. Consult a qualified employment attorney for classification, handbook, and complaint questions, and a CPA for payroll tax treatment, before you act on anything in this guide.