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Good to Know
Indiana has a diverse population, with a significant portion residing in urban areas like Indianapolis.
The state's economy is bolstered by manufacturing, agriculture, and healthcare industries.
Indiana is a right-to-work state, meaning employees are not required to join a union or pay union dues as a condition of employment.
Indiana follows the at-will employment doctrine, allowing either the employer or employee to terminate employment at any time without cause, barring any contractual agreements.
Working Hours in Indiana
Indiana has specific employment and labor laws governing working hours, designed to protect employees’ rights and ensure fair compensation. Whether you’re hiring local employees or working with an Employer of Record (EOR), it's essential to understand the state's regulations around working hours to ensure compliance.
Standard Workweek and Overtime
- Standard Work Hours: The standard workweek in Indiana is 40 hours.
- Overtime Regulations: Employees are entitled to overtime pay at 1.5 times their regular rate for hours worked beyond 40 in a workweek.
- Certain employees, such as executives, professionals, and administrative workers, may be exempt from overtime provisions.
2. Meal and Rest Breaks
- Adult Employees: Indiana law does not require employers to provide meal or rest breaks for employees aged 18 or older. If breaks are provided and last less than 20 minutes, they must be paid.
- Minor Employees: Employees under 18 must receive one or two rest breaks totaling at least 30 minutes if scheduled to work six or more consecutive hours.
Minimum Wage in Indiana
As of 2024, the minimum wage in Indiana is $7.25 per hour, aligning with the federal minimum wage.
- Tipped Employees: Must be paid a base wage of $2.13 per hour. If their total earnings (base wage plus tips) do not equal the standard minimum wage, employers are required to make up the difference.
Overtime in Indiana
Indiana mandates that non-exempt employees receive overtime pay at 1.5 times their regular hourly rate for hours worked over 40 in a workweek. Exemptions include certain salaried employees in executive, administrative, or professional roles, as defined by the Fair Labor Standards Act (FLSA).
Payroll taxes in Indiana are deductions employers must take from employees’ wages and remit to the state. These taxes fund various state programs and services, including unemployment benefits and disability insurance. Examples of payroll taxes include:
- State Income Tax: Indiana imposes a flat state income tax rate of 3.23% on employees' wages.
- County Income Tax: Counties may impose their own income taxes, which vary by county.
Payroll Cycle in Indiana
Indiana law requires employers to pay employees at least semi-monthly or bi-weekly. The specific payday must be established and communicated to employees in advance. Certain industries may have specific regulations, so it's essential to consult state guidelines relevant to your sector.
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Employment taxes and statutory fees affect both your payroll and your employees’ paychecks in Indiana. Understanding the tax obligations for both employers and employees is crucial when operating in Indiana's business landscape.
Employer Tax Contributions
Employers in Indiana are responsible for several employment taxes, including unemployment insurance and workers' compensation.
Employer payroll contributions are generally estimated at an additional 7.65% on top of the employee salary in Indiana.
Employee Tax Contributions
Employee tax contributions are generally estimated at 7.65% of employee salary in Indiana.
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Indiana employers are required to provide certain benefits, including workers' compensation insurance and unemployment insurance. While the state does not mandate health insurance, employers with 50 or more full-time employees must comply with the federal Affordable Care Act. Offering comprehensive employee benefits can enhance job satisfaction and retention.
Employee Benefits For Indiana
Competitive benefits are essential for attracting and retaining top talent in Iowa. Offering the right package helps employees feel valued and motivated. Our benefits experts understand the local labor market's trends, requirements, and expectations, ensuring your employees feel valued and supported. Common benefits in our Iowa packages include:
- Pension or 401(K)
- Vision Insurance
- Life Insurance
- Medical Insurance
- Dental Insurance
- Health Savings Plan (HSA)
- Flexible Spending Account (FSA)
Family and Medical Leave
Under the federal Family and Medical Leave Act (FMLA), eligible Indiana employees are entitled to up to 12 weeks of unpaid leave for qualifying family and medical reasons.
Sick Leave
Indiana does not have a state-mandated sick leave policy. Employers may provide sick leave at their discretion.
Vacation Leave
There is no state requirement for paid or unpaid vacation leave. Employers may establish their own policies.
Voting Leave
Indiana law requires employers to provide employees with up to two hours of paid leave to vote if their work schedule does not allow sufficient time to vote during polling hours.
Jury Duty Leave
Employers must allow employees to take unpaid leave for jury duty service.
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