All workers in Indiana are entitled to receive an hourly Minimum Wage rate according to Indiana Labor Laws and the Fair Labor Standards Act (FLSA). This Minimum Wage requirement also includes special rules for tipped workers.

Indiana Minimum Wage in 2024: Guide for Employees & Employers

Unlocking the intricacies of Indiana's minimum wage landscape in 2024 is essential for employees and employers. As the economic landscape evolves, understanding the regulations, rights, and responsibilities surrounding minimum wage can help organizations manage compliance effectively. While workers in Indiana are entitled to receive an hourly minimum wage rate according to Indiana Labor Laws and the Fair Labor Standards Act (FLSA), there are some unique exceptions. In this article, we’ll explore the details surrounding Indiana’s minimum wage, including the requirements and special rules for exemptions.  

What is the Minimum Wage in Indiana in 2024?

Indiana minimum wage is $7.25 per hour, the same as the federal minimum wage under the FLSA. If an employee were to work a standard 40-hour work week, the minimum wage would equal $290.00. For employees receiving minimum wage over 52 hours of standard 40-hour work, the minimum yearly salary would equal $15,080.00. 

Indiana minimum wage law not only covers minimum wage in Indiana for 2024 but extends to rules for tipped workers, training wags, overtime pay, and other employer requirements. 

Indiana minimum wage law requires employers, first and foremost, to pay employees a wage of at least $7.25 per hour, as well as 1.5 times their regular rate of pay for all hours worked more than forty (40) hours during a work week. However, there are exceptions to the overtime pay requirement under Indiana Overtime Laws. Ensure you understand how to manage FLSA-exempt employees.

Employers must also furnish employees with certain information regarding: 

• Hours worked by the employee
• The wages paid to the employee
• A listing of deductions made

This requirement can and is best satisfied when processing Indiana payroll. Employers struggling with such requirements due to outdated or manual paper processes should contact an Indiana Payroll Service for help.

Employer Requirements

Along with properly paying employees, employers must also display the Indiana Minimum Wage Poster in a conspicuous place in the area where employees are employed.

It is important that employers ensure minimum wage compliance. Although rather straightforward, noncompliance and violations can land employers in a world of trouble. Modern payroll software can help.

Exemptions to Indiana's Minimum Wage

There are three notable exemptions to Indiana’s minimum wage: Indiana tipped minimum wage, Indiana student minimum wage, and Indiana under 20 minimum wage. 

Indiana Tipped Minimum Wage

Employers in Indiana who operate restaurants, hotels, or other types of businesses that employ workers receiving tips should know the special rules for tipped workers in Indiana. 

If an employee receives a tip credit, the employer must pay a tipped wage of at least $2.13 per hour. However, it is important to note that if an employee's wage and tips do not total the same amount they would have received under the standard state minimum wage of $7.25, the employer must make up the difference for that shift. For example, tipped employees who receive the minimum $2.13 per hour from their employer would be owed a $5.12 tip credit to meet the required $7.25 per hour. 

Indiana Student Minimum Wage

For full-time college or high school students, employers are permitted to pay 85% of the Indiana minimum wage provided those students are enrolled in a work-study program or work 20 hours (or less) per week. In this instance, the minimum wage would equal $6.16. 

Indiana Under 20 Minimum Wage

Employers in Indiana may pay a special training minimum wage of $4.25 per hour for the first 90 consecutive days of employment if the employee is under the age of 20.

Impact of Indiana's Minimum Wage Laws on Employees' Paychecks

The Indiana General Assembly (IGA) House Bill 1192 outlines a structured increase schedule for the minimum wage paid to certain employees in Indiana: 

• After June 30, 2024: $7.25 to $9.02
• After December 31, 2024: $9.02 to $10.07
• After December 31, 2025: $10.07 to $11.11
• After December 31, 2026: $11.11 to $12.10

After December 31, 2027, and each subsequent December 31, the hourly minimum wage increases at the same percentage as the increase in the Consumer Price Index for the preceding calendar year. 

Increases for the cash wage paid to tipped employees:

• After June 30, 2024: $2.13 to $3.30
• After December 31, 2024: $3.30 to $4.71
• After December 31, 2025: $4.71 to $6.12
• After December 31, 2026: $6.12 to $7.54 

After December 31, 2027, and each subsequent December 31, employees are required to receive a cash wage equal to $70 of the hourly minimum wage. If the federal minimum wage or cash wage is higher than Indiana’s minimum wage or cash wage, employers are obligated to pay the higher federal rate.

Payroll Considerations for Indiana's Minimum Wage

For businesses managing payroll in Indiana, accurate record-keeping is essential. Employers must maintain detailed records of hours worked and wages paid to ensure compliance and to address any disputes that may arise. Here are five critical payroll considerations for Indiana’s minimum wage: 

Minimum Wage Compliance: Ensure all employees are paid at least the state minimum wage of $7.25 per hour, which aligns with the federal rate unless specific exemptions apply.

Tipped Employees: Properly calculate the base pay for tipped employees, ensuring that their combined tips and base pay meet or exceed the minimum wage of $7.25 per hour.

Overtime Pay: Indiana follows federal guidelines, requiring non-exempt employees to pay 1.5 times their regular rate for hours worked beyond 40.

Record Keeping: Keep comprehensive and accurate records of hours worked, wages paid, and other payroll details. Indiana law requires employers to maintain these records for at least three years.

Updating Payroll Systems: Regularly update payroll systems to ensure they comply with current minimum wage laws and can accurately calculate wages, tax withholdings, and other deductions.

Ensuring Compliance with Indiana's Minimum Wage Laws

Managing compliance with minimum wage might seem simple, but with varying rules for things like tipped workers and training employees, Indiana employers need to stay in the know.

As part of our human capital management platform, InspireHCM, TruPay’s payroll software solution can simplify your payroll processes and ensure accuracy and compliance with Indiana’s payroll processing laws and regulations. To see how TruPay is already helping countless businesses manage minimum wage compliance in Indiana, request a live demo today!