Indiana Labor Laws 2026: A Complete Guide for HR & Employer Compliance

Accurate as of May 7, 2026. This guide is informational and not legal advice. For specific situations, consult licensed Indiana employment counsel.

Indiana is a federal-default state for most wage and hour rules and an active state on top of that floor. The minimum wage matches the federal $7.25, the FLSA sets the overtime exemption salary at $684 per week, and there is no state mandate for paid sick leave, paid family leave, or pay transparency. The work for HR teams sits where the state has chosen to act: a strict wage payment statute that lets workers recover treble damages and attorney's fees, a Civil Rights Law that reaches employers with six or more employees, an age discrimination chapter that covers the 40-and-over workforce, a 2025 ban on physician-hospital non-competes, a brand-new Earned Wage Access licensing regime, child labor rules that were rewritten for 2025 and revised again in 2026, and a layered E-Verify mandate for state contracts and grants.

The 2025 and 2026 sessions added meaningful changes for Indiana employers. House Enrolled Act 1125 created a statewide Earned Wage Access licensing framework that took effect January 1, 2026, with a $0.05 per dollar fee structure for tip-based providers. House Enrolled Act 1098 (Work-Based Learning Liability) clarified the insurance and liability rules for student apprentices. House Enrolled Act 1177 expanded the employer childcare tax credit. SEA 161 and SEA 162 modernized workforce training alignment and unemployment insurance statutes. And the 2026 session removed the long-standing Department of Labor youth-employer registration requirement effective July 1, 2026, on top of the broader child labor rewrite that took effect January 1, 2025.

This guide walks through every wage, hour, leave, civil rights, hiring, and safety rule that applies to Indiana employers in 2026. It includes statute citations, bill numbers, dollar amounts, and effective dates pulled from primary sources. It also points HR teams toward an employee relations platform built for documenting complaints, investigations, and remediation in a way that holds up to a wage claim, a Civil Rights Commission charge, or an EEOC investigation.

The 2026 Indiana Employment Law Updates HR Teams Should Know First

A handful of statutes and rule changes from the 2024, 2025, and 2026 sessions are now driving Indiana payroll, hiring, and benefits work. Each is detailed below with statute citations, effective dates, and the practical workflow change.

• Earned Wage Access licensing (HEA 1125): Signed May 6, 2025. Effective January 1, 2026. Establishes that EWA providers do not engage in lending under Indiana law and creates a mandatory state license, fee disclosure, and reporting regime administered through the Department of Financial Institutions.
• Physician-hospital non-compete ban (IC 25-22.5-5.5): The 2025 amendment voids any new physician non-compete entered into on or after July 1, 2025 between a physician and a hospital, the parent company of a hospital, an affiliated manager of a hospital, or a hospital system. The 2020 and 2023 schemes for non-physician-hospital agreements remain in force.
• Youth employment registration repeal: The 2026 session eliminated the requirement to register an employer with the Department of Labor when employing five or more minors aged 14 through 18 and removed the registered employer database. Effective July 1, 2026.
• Work-Based Learning Liability (HEA 1098): Clarifies how insurance and liability are allocated when student apprentices are placed with employers, removing a barrier to youth apprenticeship participation.
• Employer childcare tax credit expansion (HEA 1177): Modernizes Indiana's employer-funded childcare credit to support more business participation in childcare investments.
• Workforce alignment and UI modernization (SEA 161, SEA 162): SEA 161 better aligns workforce training programs with federal credentialing. SEA 162 cleans up unemployment insurance statutes to reduce employer ambiguity.
• Child labor rules (effective January 1, 2025): 14- and 15-year-olds may now work until 9 PM between June 1 and Labor Day. 16- and 17-year-olds have no hour restrictions. Employers with five or more minors must use the Youth Employment System (YES) until the registration repeal takes effect July 1, 2026.

The detail below covers each topic in turn, plus the federal and state baselines every Indiana employer carries from January 1.

Indiana Minimum Wage in 2026

Indiana's minimum wage is set by IC 22-2-2 and ties directly to the federal Fair Labor Standards Act floor.

What is the Indiana minimum wage in 2026?

$7.25 per hour, the same rate as the federal FLSA. Indiana's wage law applies to employers with two or more employees in a workweek under IC 22-2-2-4(c). The state has not raised its own floor since the federal rate took effect in 2009.

Are local minimum wages allowed in Indiana?

No. IC 22-2-2-10.5, added by the General Assembly in 2011, preempts local minimum wages. Counties, cities, and towns cannot enact a higher minimum wage than the state floor for private-sector workers. Indianapolis, Fort Wayne, Evansville, South Bend, and every other municipality default to $7.25.

What is the tipped minimum wage in Indiana?

Indiana follows the federal tipped wage of $2.13 per hour, with employer obligation to make up the difference if cash wages plus tips do not reach $7.25 in a given pay period. Tip pooling is allowed, with the federal rule barring managers and supervisors from sharing in the pool.

Is there a youth minimum wage?

Yes. The federal FLSA youth opportunity wage of $4.25 per hour applies for the first 90 calendar days of employment for workers under 20. Indiana follows the federal rule and does not impose a separate state youth wage.

Are any Indiana employers exempt from minimum wage?

A handful. Employers with fewer than two employees in any single workweek are not subject to IC 22-2-2. Categories the FLSA exempts (most agricultural workers, some seasonal employees, executive and administrative employees meeting the salary basis and duties tests) are also outside the Indiana floor.

Overtime Rules in Indiana

Indiana mirrors the federal weekly overtime standard. Employers do not face a daily 8-hour overtime trigger.

When must Indiana employers pay overtime?

For nonexempt employees, 1.5 times the regular rate for all hours worked over 40 in a workweek. The rule sits at IC 22-2-2-4. The workweek is a fixed and regularly recurring period of 168 hours (seven 24-hour periods).

What is the exempt salary threshold in Indiana?

$684 per week ($35,568 per year), the federal FLSA threshold currently in force. Indiana does not impose a higher salary threshold than federal law for executive, administrative, and professional exemptions. Highly compensated employees must earn at least $107,432 annually under the federal rule.

Does the duties test still apply?

Yes. Salary alone does not qualify a worker as exempt. The employee must also perform exempt duties under one of the FLSA categories: executive, administrative, professional, outside sales, or computer employee. Indiana courts apply the same duties analysis as federal courts.

Are there state-specific overtime exemptions?

IC 22-2-2-3 lists Indiana-specific exemption categories at subsections (a) through (p), including agricultural workers, certain motor carrier employees, and other narrow categories that mirror or extend FLSA exemptions. Most Indiana employers can rely on FLSA rules without additional state-level analysis, but specific industries should map their workforce against IC 22-2-2-3 each year.

Is comp time allowed in lieu of overtime in Indiana?

Not for private-sector employees. Comp time in lieu of cash overtime is permitted only for public agencies under federal FLSA rules. Indiana private employers must pay cash overtime for hours over 40.

Indiana Pay Frequency, Wage Statements, and Wage Payment Rules

Indiana's wage payment statute (IC 22-2-5) and wage claims statute (IC 22-2-9) drive most of the litigation risk for employers in the state.

How often must Indiana employees be paid?

At least semimonthly, or biweekly if the employee requests it, under IC 22-2-5-1. Payment must cover all wages earned to a date no more than ten business days before the date of payment. Weekly pay is permitted; monthly pay is not.

What is a "business day" under IC 22-2-5?

A day other than Saturday, Sunday, or a legal holiday. The 10-business-day lookback period is generous compared with most states but still narrow enough to require disciplined payroll cycles.

What does Indiana require on a wage statement?

Indiana does not have a detailed itemized wage statement statute. Practical employer practice, and what the Department of Labor expects to see when investigating wage claims, includes: hours worked in the pay period, gross wages, all deductions taken, net pay, the start and end of the pay period, and the employer's name. Pay stub records should be retained for at least three years.

Can employers pay by direct deposit, check, or pay card?

Yes to all three. Indiana allows direct deposit if the employee has a designated account. Pay cards are permitted if the employee can withdraw the full amount on each payday without fee. Cash and paper checks remain valid options.

Are there special pay timing rules during a pay dispute?

Yes. IC 22-2-9-3 requires the employer to give written notice of the amount of wages the employer concedes to be due and to pay that amount unconditionally within the time the statute allows, regardless of any dispute over additional sums.

Final Paycheck Rules in Indiana

Indiana sits on the lighter end of the spectrum for final pay timing.

When are final wages due in Indiana?

On the next regular payday after separation, regardless of whether the employee resigned or was terminated, under IC 22-2-9-2. There is no immediate-pay-on-discharge rule like California or Nevada and no daily continuing wage penalty on top.

Does an industrial dispute change the timing?

No. Wages earned at the time of a work stoppage from an industrial dispute become due at the next regular payday. Strikes and lockouts do not accelerate or delay the wage payment obligation.

What if a voluntarily resigning employee leaves no contact information?

Under IC 22-2-5-1, if an employee leaves voluntarily without providing the employer with a current address, the employer is not subject to the wage-payment-on-time rule until either ten business days have passed after the employee makes a demand for the wages or the employee provides an address for forwarding. Treat this as a documentation moment, not a license to delay; payroll should still cut the check on the next regular payday.

Is unused vacation or PTO required to be paid out at separation?

Only if the employer's written policy or contract requires payout. Indiana courts treat accrued vacation as wages payable under IC 22-2-9 only if the policy promises payment. Use-it-or-lose-it policies are enforceable if clearly communicated. Document the policy in the handbook and have employees acknowledge it on hire.

What is the penalty for late final pay?

Under IC 22-2-5-2, an employer who fails to pay wages by the next regular payday after demand owes liquidated damages of 10% of the unpaid wages per day, capped at double the wages. Attorney's fees and costs are also recoverable, which materially shifts settlement dynamics in wage cases.

Indiana Wage Deductions and Permissible Withholdings

Wage deductions are governed by IC 22-2-6. The statute is more permissive than California or Massachusetts but still requires written authorization and category-specific limits.

What categories of deductions does IC 22-2-6 allow?

Beyond statutorily required deductions (taxes, garnishments, child support), permitted wage assignments under IC 22-2-6-2 include:

• Insurance premiums
• Charitable contributions
• U.S. government bonds or securities
• Company stock or shares
• Insurance policies and annuities
• Mutual fund shares
• Judgments between the employee and a creditor
• Uniforms and job-related clothing
• Tools and equipment necessary for employment

Are there caps on uniform and tool deductions?

Yes. Deductions for uniforms or required equipment cannot exceed $2,500 per year or 5% of weekly disposable earnings, whichever is less. The cap protects low-wage workers from compounding deductions that would otherwise drop them below the FLSA floor.

Can employers deduct for cash shortages or breakage?

Generally no, unless the employee provides a written authorization that meets statutory content requirements and the deduction does not drop the employee below the federal minimum wage. Indiana courts read this rule strictly. Audit handbook policies that promise deductions for cash drawer shortages, broken merchandise, or unreturned property; many of those clauses are unenforceable.

What about overpayment recovery?

Under IC 22-2-6-4, an employer may recover an overpayment by deduction if the employer first gives written notice of the overpayment and the employee does not dispute it within two weeks. The deduction cannot exceed 25% of the employee's disposable earnings in any pay period and cannot drop earnings below 30 times the federal minimum wage. This is one of the more employer-friendly recovery rules in the country. Document the notice and the response in the worker's file using a structured documentation workflow so the deduction is defensible if the worker later challenges it.

Wage Claims and Wage Theft Enforcement in Indiana

Indiana wage cases follow a forked path. The case file determines which forum hears the claim.

When does the Wage Payment Statute apply?

IC 22-2-5 applies to currently employed workers and to former workers who voluntarily resigned. Workers proceed individually in court and can recover unpaid wages, the 10%-per-day liquidated damages capped at double the wages, attorney's fees, and costs.

When does the Wage Claims Statute apply?

IC 22-2-9 applies to workers who were involuntarily terminated. Workers must first file an administrative claim with the Indiana Department of Labor before suing. The Department investigates, attempts conciliation, and may pursue the claim on the worker's behalf or release it for private litigation. Liquidated damages and attorney's fees are available on the same terms as the Wage Payment Statute.

What is the statute of limitations?

Two years for wage claims under either statute. The clock runs from the date payment was due, not from the date the employee discovers the violation. Document each pay period and run an annual audit of payroll outputs against handbook policies and offer letters.

What evidence drives wage claim outcomes?

Time records, the employer's payroll register, the offer letter, the handbook, and any prior wage statements provided to the employee. Indiana courts will look at written documentation first; oral promises rarely override a written compensation policy. Centralized recordkeeping in an HR case management system reduces the chance that a wage dispute lands without supporting documents.

Indiana Civil Rights Law and Employment Discrimination

The Indiana Civil Rights Law (IC 22-9) is the centerpiece of the state's anti-discrimination framework. The statute is enforced by the Indiana Civil Rights Commission (ICRC), an executive agency with administrative authority.

Which employers does the Indiana Civil Rights Law cover?

Employers with six or more employees for at least one day in a calendar year. The threshold is materially lower than federal Title VII's 15-employee threshold, which means many Indiana small employers face state-level obligations even when they fall below federal coverage.

What classes are protected under the Indiana Civil Rights Law?

The statute prohibits discrimination based on:

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

The state list does not include sexual orientation or gender identity at the state level, but the federal Bostock v. Clayton County decision (2020) reads sex under Title VII to cover both characteristics, and many Indiana cities have local ordinances that add explicit protection (more on that below). Pregnancy and childbirth status are read as a sex-based protection.

How do Indiana employees file an ICRC complaint?

Through the ICRC online portal or by paper filing. The agency dual-files most charges with the EEOC under the worksharing agreement, so a single complaint can preserve both state and federal claims. Filing windows: 180 days for ICRC charges and 300 days for the EEOC under the worksharing agreement. Treat the 180-day mark as the operative deadline.

What remedies are available?

The ICRC has authority to issue cease-and-desist orders, order back pay, order reinstatement, and impose civil penalties. After 1993 amendments, complainants can also pursue private suits in superior or circuit court for compensatory damages, attorney's fees, and equitable relief. Punitive damages remain available under federal Title VII but are limited under state law.

What documentation does the ICRC ask for first?

The applicant's file, the offer or rejection record, the personnel file, performance reviews, comparable-employee data, internal complaint records, and any investigation file. Employers without organized intake-and-investigation records often spend the first month of an ICRC investigation reconstructing what should already be on hand. A documented investigation workflow closes that gap.

Age Discrimination Under IC 22-9-2

Indiana's age discrimination chapter sits separately from the rest of the Civil Rights Law and operates as a state analogue to the federal Age Discrimination in Employment Act (ADEA).

Which employers does IC 22-9-2 cover?

Employers with one or more employees, a coverage trigger far broader than the federal ADEA's 20-employee threshold. Indiana small businesses face state-level age discrimination obligations from the first hire.

What ages are protected under IC 22-9-2?

Workers aged 40 and older. The state law is meaningful primarily for small Indiana employers below the ADEA threshold, but the substantive protections track federal law on disparate-treatment and disparate-impact analysis.

What is the filing window?

Complaints with the ICRC must be filed within 180 days of the alleged discriminatory act. Workers covered by both state and federal law can dual-file with the EEOC under the standard worksharing agreement.

What are the main fact patterns Indiana employers see?

Reduction-in-force decisions targeting older workers, discriminatory job postings (specifying "recent graduates" or age-coded language), forced retirement offers, and unequal severance for older workers. Building age-neutral RIF criteria and documenting the business case for any selection decisions is the single most important defensive practice.

Sexual Orientation, Gender Identity, and Indiana Local Ordinances

Indiana state law does not expressly add sexual orientation or gender identity to its list of protected classes. The federal Bostock v. Clayton County decision (2020) read Title VII to prohibit discrimination on those bases as a form of sex-based discrimination, which means Title VII's 15-employee threshold sets the federal floor. Local ordinances close the small-employer gap in many Indiana cities.

Which Indiana cities have local human rights ordinances?

More than 20 Indiana municipalities have enacted human rights ordinances that protect against employment discrimination based on sexual orientation and gender identity. The most prominent:

• Indianapolis-Marion County: Chapter 581 of the Indianapolis-Marion County Code prohibits employment discrimination on the basis of race, color, religion, ancestry, age, national origin, disability, sex, military veteran status, sexual orientation, and gender identity. Complaints go to the Indianapolis Department of Administration's Division of Equal Opportunity.
• Bloomington: Local ordinance covering sexual orientation, gender identity, and additional categories.
• Fort Wayne: Extends protections beyond state law.
• South Bend: Active Human Rights Commission with jurisdiction over employment discrimination claims.
• Evansville, Lafayette, Carmel, Columbus, and others: Each runs an ordinance with overlapping but not identical coverage.

Why do local ordinances matter for small employers?

Federal Title VII applies to employers with 15 or more employees. Local ordinances often apply at lower thresholds and may extend protection to employers with as few as one employee operating inside city limits. A small employer based in Indianapolis, Bloomington, or Fort Wayne should treat sexual orientation and gender identity as protected from day one.

What happens when state law and a local ordinance conflict?

Indiana applies state preemption narrowly. Employment discrimination ordinances generally stand on their own, even where local ban-the-box ordinances on private employers were preempted by 2017's Senate Bill 312. Multi-city employers should track each ordinance separately rather than relying on a single statewide policy. An updated employee handbook with city-specific addenda is the cleanest path. Pair the handbook with a retaliation prevention framework so a local-ordinance complaint never escalates because of post-report behavior.

Sexual Harassment Prevention in Indiana

Sexual harassment is prohibited as a form of sex discrimination under IC 22-9-1 and federal Title VII. Indiana does not mandate specific harassment prevention training for private employers.

Is harassment training required in Indiana?

No state mandate. Federal Title VII does not impose a training mandate either, though the EEOC strongly encourages preventive training as part of an effective harassment prevention program. Public sector employers may face training requirements through agency policy, but private employers are not subject to a state law mandate.

What is the practical floor for an Indiana harassment program?

Even without a state mandate, the floor most Indiana employers run includes:

• A written anti-harassment policy in the handbook with examples of prohibited conduct
• A clear reporting process with at least two reporting channels (so workers do not have to report to the alleged harasser)
• An investigation protocol with prompt acknowledgment, fact-finding, and a documented outcome
• Annual or biannual training for managers and employees
• A retaliation prohibition and an explicit channel for reporting retaliation

A documented program is the strongest available defense to a hostile-work-environment claim. Harassment prevention content built into the onboarding workflow keeps the documentation trail clean. For ongoing reporting and follow-up, an intake-to-resolution workflow matters as much as the training itself.

What is the Faragher-Ellerth defense in Indiana?

The federal Faragher-Ellerth affirmative defense applies in Indiana federal court. Employers can defeat vicarious liability for supervisor harassment if they prove (a) reasonable care to prevent and correct harassment and (b) the plaintiff unreasonably failed to use the preventive or corrective opportunities. The defense is unavailable when the harassment culminates in a tangible employment action (firing, demotion, denial of promotion).

Disability Accommodations Under IC 22-9-5

IC 22-9-5 is Indiana's state analogue to the federal Americans with Disabilities Act. The statute covers employment, public accommodations, and other contexts, with employment-specific rules in IC 22-9-5-19.

Which employers does IC 22-9-5 cover?

Employers with 15 or more employees, the same threshold as federal ADA. The Indiana statute provides a state-court forum and remedies that closely track federal law.

What does IC 22-9-5 require?

Reasonable accommodation for qualified individuals with disabilities, absent undue hardship. The interactive process is required: when an employee discloses a disability and requests accommodation, the employer must engage in a good-faith conversation to identify possible accommodations.

What accommodations are most often requested?

Modified schedules, ergonomic equipment, telework arrangements (where feasible), modified job duties, leave as a reasonable accommodation, and assistive technology. Indiana employers should run accommodation requests through a documented intake process and capture each step of the interactive conversation in writing.

What documentation can an employer request?

Medical documentation is permitted to confirm the existence of the disability and the need for the requested accommodation, but must be limited to what is necessary. Broad requests for full medical records are not permitted.

Pregnancy Accommodations in Indiana

Indiana does not have a comprehensive state-level pregnancy accommodation statute beyond what is read into the Civil Rights Law. The federal Pregnant Workers Fairness Act (PWFA), effective June 27, 2023, fills the gap for employers with 15 or more employees.

What does the federal PWFA require in Indiana?

Reasonable accommodation for known limitations related to pregnancy, childbirth, or related medical conditions. Examples include schedule adjustments, modified duties, additional bathroom or rest breaks, accommodation of a doctor-recommended weight-lifting limit, and time off for prenatal appointments.

Are smaller Indiana employers covered?

Indiana state law treats pregnancy discrimination as sex discrimination under the Civil Rights Law, which applies to employers with six or more employees. The accommodation duty in pregnancy cases is less explicit at the state level than under federal PWFA, but disparate treatment of pregnant workers is plainly prohibited.

What about pregnancy and the FMLA?

Eligible workers can take up to 12 weeks of unpaid, job-protected leave for pregnancy, childbirth, and bonding under the federal FMLA. Indiana does not have a state FMLA equivalent. Indiana state employees have access to up to 150 hours of paid New Parent Leave through the State Personnel Department, but private employees rely on the federal floor.

Indiana Family Leave: The Federal FMLA Default

Indiana has no state family or medical leave program. The federal Family and Medical Leave Act controls.

Which employers are FMLA-covered in Indiana?

Private employers with 50 or more employees within a 75-mile radius. Public agencies and public and private elementary and secondary schools are also covered. Eligible employees must have worked for the employer for 12 months and at least 1,250 hours in the preceding 12 months.

What does FMLA provide?

• Up to 12 weeks of unpaid, job-protected leave for serious health conditions, parental leave, or family member care
• Up to 26 weeks of military caregiver leave to care for a covered service member
• Continuation of group health insurance during the leave on the same terms as if the employee were working
• Reinstatement to the same or an equivalent position when the leave ends

Is there any state paid leave benefit?

Not for private employees. Indiana has not enacted a state paid family and medical leave program, unlike California, Washington, Oregon, Colorado, Connecticut, Massachusetts, New Jersey, New York, and Rhode Island. Indiana state government employees have access to a state paid New Parent Leave program for state agency staff only.

What does this mean for Indiana employers running multi-state programs?

Many multi-state Indiana employers offer voluntary paid parental or medical leave that exceeds the federal FMLA floor as a competitive recruiting benefit. Indiana itself does not impose a payroll contribution or benefit administration burden similar to PFML states. Document any voluntary policy clearly and apply it consistently. For neighboring multi-state programs, see the Illinois labor laws guide, the Michigan labor laws guide, and the Ohio labor laws guide.

Paid Sick Leave: What Indiana Requires

Indiana has no state paid sick leave mandate. Local mandates are also off the table.

Is paid sick leave required for Indiana private employers?

No. Indiana has not enacted a paid sick leave statute, and as of 2026 no Indiana municipality has a paid sick leave ordinance applicable to private employers. Compare this to Illinois, Michigan, Minnesota, and Ohio, all of which have either statewide laws or active local ordinances.

Can Indiana employers offer voluntary sick leave?

Yes, and most do. Voluntary policies are governed by the employer's handbook, offer letter, and any applicable contract. Once the policy promises paid sick leave, Indiana courts treat the accrued leave as wages payable under the wage payment rules where the policy explicitly says so.

What is the practical posture for multi-state Indiana employers?

Most multi-state employers running operations in PSST states (Illinois, Michigan, Minnesota, and many cities) extend a unified leave policy to Indiana workers rather than running a separate Indiana-specific policy. The exception is when the multi-state policy is materially less generous than the PSST-state minimum, in which case employers should bifurcate. For neighboring jurisdictions with city-level rules, see the Chicago labor laws guide.

Earned Wage Access in Indiana (HEA 1125)

Indiana's Earned Wage Access licensing law took effect January 1, 2026, after Governor Mike Braun signed House Enrolled Act 1125 on May 6, 2025.

What does HEA 1125 do?

Two big pieces. First, it clarifies that EWA providers are not lenders under Indiana law, which removes a hanging legal question. Second, it requires every EWA provider operating in Indiana to obtain a state license and to comply with disclosure, recordkeeping, and reporting rules administered by the Department of Financial Institutions.

Why does this matter for HR teams?

Many Indiana employers contract with EWA providers as a benefit (DailyPay, EarnIn, Payactiv, and similar services). After January 1, 2026, the contracting provider must hold an Indiana license. HR and procurement teams should:

• Confirm any contracted EWA partner is licensed in Indiana
• Review the disclosure language presented to employees enrolling in the benefit
• Understand the fee model (employer-paid versus employee-paid) and how it interacts with the wage payment rules
• Check whether the EWA program triggers any wage assignment requirements under IC 22-2-6

Does EWA enrollment count as a wage assignment?

It can, depending on the structure. Where the employee directs the employer to forward a portion of earned wages to the EWA provider, the arrangement may need to comply with IC 22-2-6 wage assignment rules. Direct-to-employee EWA models that do not flow through payroll generally do not trigger the wage assignment statute, but the line is fact-specific. Consult counsel before launching.

Non-Compete Agreements in Indiana

Indiana enforces non-competes at common law without a comprehensive non-compete statute for general employees. Courts apply a reasonableness test that has narrowed over the past decade.

Are non-competes enforceable in Indiana?

Generally yes, if the agreement is reasonable in scope, duration, and geographic reach, and if the employer has a legitimate protectable interest. Indiana courts enforce non-competes that protect trade secrets, confidential information, and customer relationships, and reject agreements that simply prevent a former employee from earning a living.

What is the Indiana "blue pencil" rule?

Indiana courts do not rewrite overbroad non-competes; they strike unreasonable provisions and enforce only what remains. If the offending clause cannot be cleanly excised, the entire restriction may fail. Draft narrowly. Overreach is punished.

What duration and geographic scope hold up?

The case law trends:

• Two-year durations are sometimes enforceable for senior or sales roles; one year is the safer default
• Geographic scope tied to the employee's actual sales territory or service area is more enforceable than statewide or multi-state restrictions
• Non-competes that cover any "competitor" without reference to the employee's actual role are commonly struck down
• Non-solicitation of customers and employees is generally easier to enforce than full non-competes

When can an Indiana employee challenge a non-compete?

In an Indiana state court, typically through a declaratory judgment action or as a defense to enforcement. The employer carries the burden of proving reasonableness; the analysis is heavily fact-specific.

Physician Non-Competes Under IC 25-22.5-5.5

Indiana enacted comprehensive physician non-compete restrictions in 2020, expanded the framework in 2023, and added an outright ban on physician-hospital agreements in 2025.

What does the 2025 amendment do?

Effective July 1, 2025, any non-compete entered into between a physician and a hospital, the parent company of a hospital, an affiliated manager of a hospital, or a hospital system on or after that date is void and unenforceable. The ban is categorical for that contracting relationship.

What about agreements signed before July 1, 2025?

The 2025 amendment does not retroactively void existing agreements. Pre-July 1 physician-hospital non-competes remain governed by the 2020 and 2023 frameworks: they must include the patient-notice provision and become unenforceable in three specific termination scenarios (employer terminates without cause, physician terminates for cause, or contract expires after both parties have fulfilled obligations).

What about physician-employer relationships outside the hospital context?

Physician non-competes with non-hospital employers (medical group practices, ambulatory surgery centers, urgent care chains, telehealth platforms) remain enforceable subject to the 2020 and 2023 frameworks. Required content includes:

• A notice provision requiring the employer to provide the physician with copies of any patient communications about the physician's departure
• An option for the physician to purchase a release from the non-compete at a reasonable price
• Restrictions consistent with the reasonableness test applied to general non-competes

What does this mean for Indiana hospitals and health systems in 2026?

New employment offers and renewals to physicians cannot include enforceable non-competes if the contracting party is a hospital, a hospital parent, an affiliated manager, or a hospital system. Restructuring as a separately incorporated medical group is fact-specific; the corporate form is not enough on its own to defeat the statute. Coordinate offer letter templates and physician acquisition agreements with employment counsel before signing.

Indiana Right-to-Work Law (IC 22-6-6)

Indiana became a right-to-work state on February 1, 2012, when Governor Mitch Daniels signed House Bill 1001 into law. The provisions are codified at IC 22-6-6.

What does the right-to-work law prohibit?

Employers and labor organizations cannot require an individual to:

• Become or remain a member of a labor organization
• Pay dues, fees, assessments, or other charges of any kind to a labor organization
• Pay an equivalent amount to a third party in lieu of dues, fees, or charges

Coverage applies to private-sector employers and labor organizations. Public-sector employees of the state and political subdivisions are not subject to the prohibitions.

Does right-to-work affect collective bargaining or strikes?

No. Indiana unions can still organize, bargain collectively, represent workers in grievances, and strike. The right-to-work law only prevents mandatory union financial support as a condition of employment. The National Labor Relations Act and federal labor law continue to govern most other union activity.

Are there penalties for violation?

Yes. Knowing violations are a Class A misdemeanor, with possible criminal penalties. Civil remedies include injunctive relief, damages, and attorney's fees for affected workers.

Drug Testing and Cannabis in Indiana Workplaces

Indiana is one of the most employer-favorable states in the country for workplace drug testing. There is no comprehensive state drug-testing statute, and no medical or recreational cannabis employment protection.

Can Indiana employers drug test for marijuana?

Yes. Marijuana remains illegal under Indiana state law in both the medical and recreational contexts. Indiana employers may test applicants and employees for THC and may take adverse action based on a positive result, including refusing to hire, terminating, or disciplining the worker.

What types of testing are permitted?

• Pre-employment
• Reasonable suspicion
• Post-accident
• Random (with a written policy)
• Return-to-duty
• Follow-up testing under a last-chance agreement

Are there limits on testing procedures?

Common-law privacy, ADA, and FCRA protections still apply. An employer that conducts drug testing in a way that violates the employee's reasonable expectation of privacy, discloses test results outside the need-to-know circle, or relies on an inaccurate test result without giving the worker a chance to respond can face tort claims and statutory liability. The ADA also protects employees taking lawfully prescribed medication for a disability; refusing to hire based on a positive test for a prescribed medication can trigger an ADA claim.

Does Indiana follow Drug-Free Workplace Act incentives?

Yes. Federal contractors and grantees subject to the federal Drug-Free Workplace Act of 1988 must maintain a written drug-free workplace policy as a condition of contract. Indiana also offers a workers' compensation insurance discount for employers that adopt a Certified Drug-Free Workplace program through IOSHA.

Background Checks and Ban-the-Box Status in Indiana

Indiana has no private-sector ban-the-box law. State agencies operate under a 2017 executive policy that delays criminal-history questions until after the initial application, but the rule does not extend to private employers.

Can private Indiana employers ask about criminal history on the application?

Yes. Indiana law does not prohibit a question about criminal convictions on the initial application, and the state preempts local ordinances that would impose stricter rules on private employers (Senate Bill 312, signed in 2017). Indianapolis prohibits its city contractors with $50,000 or more in city contracts from asking about criminal history on the initial application, but the rule is contractual and does not extend to other private employers.

What FCRA rules still apply?

All of them. Indiana employers that use third-party consumer reports for hiring or employment decisions must comply with the federal Fair Credit Reporting Act:

• Standalone written disclosure to the applicant before the report is run
• Written authorization from the applicant
• Pre-adverse action notice with a copy of the report and a summary of FCRA rights
• Reasonable opportunity for the applicant to dispute the report
• Final adverse action notice if the decision stands

What does best practice look like in Indiana?

Even without a state mandate, most well-run Indiana employers delay any criminal-history inquiry until after the conditional offer to reduce disparate-impact exposure under EEOC guidance and to align with the rules in Illinois, Ohio, and Kentucky for multi-state employers. Document the individualized assessment when a record affects a hiring decision; keep the assessment file for at least three years.

E-Verify and IC 22-5-1.7

Indiana mandates E-Verify in two specific contexts: state contracts and grants over a defined threshold.

When does Indiana require E-Verify use?

Under IC 22-5-1.7-11, contractors with public contracts for services with the State of Indiana or any political subdivision must enroll in and use E-Verify. The contractor verifies work eligibility for all newly hired employees who will perform work under the contract.

What about state grants?

A state agency or political subdivision may not award a grant of more than $1,000 to a business entity unless the entity:

• Signs a sworn affidavit stating that it has enrolled in and is participating in E-Verify
• Provides documentation of E-Verify enrollment
• Affirms that the entity does not knowingly employ an unauthorized alien

What about public works projects?

For public works projects, contractors must submit the E-Verify case verification number for each individual required to be verified before that individual begins work. An individual whose case results in final nonconfirmation cannot be employed on the project.

Is E-Verify required for general private employers?

No. Private employers that do not contract with state government and do not receive state grants over $1,000 are not required to use E-Verify under Indiana law. Federal I-9 compliance is, of course, mandatory for every employer.

Whistleblower Protections in Indiana (IC 22-5-3-3)

Indiana's private-sector whistleblower statute is narrower than the protections in some other states, but it provides meaningful coverage for workers at companies performing public contracts.

Who is covered by IC 22-5-3-3?

Employees of private employers doing work pursuant to a contract with a public agency. The protection extends to retaliation by the employer for reporting:

• A violation of federal law or regulation
• A violation of state law or rule
• A violation of a political subdivision ordinance
• A misuse of public funds

What kind of retaliation is prohibited?

Dismissal, withholding salary increases or employment-related benefits, transfer or reassignment, denial of promotion, or demotion in retaliation for protected reporting.

What reporting steps must the employee follow?

If the employee believes someone other than the employer is violating the law, the employee must first report internally to the employer. If the employer is the alleged wrongdoer, the employee may report internally or to an appropriate government official. If the wrongdoing is not corrected within a reasonable period, the employee may report to any person, agency, or organization. The employee must also make a reasonable attempt to verify the information before reporting.

What other whistleblower protections apply in Indiana?

Federal Sarbanes-Oxley, Dodd-Frank, the OSHA Section 11(c) anti-retaliation provision, the federal False Claims Act, and the FLSA all provide whistleblower remedies that may apply alongside IC 22-5-3-3. Workers in publicly traded companies, financial services, healthcare, and federal contracting often have multiple layered protections. A clear whistleblower policy with anonymous intake routes the report through HR rather than around it.

What is the filing window?

A lawsuit must be filed within two years of the retaliatory action, unless another statute imposes a shorter period.

Indiana Workers' Compensation

Indiana employers must carry workers' compensation insurance under the Indiana Worker's Compensation Act, IC 22-3-2 et seq. The Indiana Worker's Compensation Board administers the system.

Who must carry workers' comp insurance?

Most private employers with one or more employees. Limited exemptions include certain agricultural workers, household and domestic employees, casual labor, and railroad workers covered by FELA.

How fast must an injury be reported?

Employees must report a work-related injury to the employer as soon as practicable, generally within 30 days. Employers must file the State Form 34401 (First Report of Injury) within 7 days of receiving notice. Late reporting can delay claim adjudication and expose the employer to penalties.

What benefits are available?

• Medical care for the work-related injury
• Temporary total or partial disability benefits during recovery
• Permanent partial impairment benefits based on a statutory schedule
• Permanent total disability benefits in qualifying cases
• Death benefits for survivors

Can workers be terminated while on workers' comp?

Indiana courts recognize a wrongful discharge claim for retaliation against employees who file workers' comp claims (Frampton v. Central Indiana Gas Co., 1973). Termination during a comp claim should be supported by clear documentation of legitimate, non-retaliatory grounds.

IOSHA: Indiana Workplace Safety

Indiana is a state-plan OSHA jurisdiction. The Indiana Occupational Safety and Health Administration (IOSHA), part of the Indiana Department of Labor, enforces both federal OSHA standards and Indiana-specific rules.

What injury reporting is required?

• Fatalities: Reported within 8 hours of the death
• In-patient hospitalizations, amputations, and eye losses: Reported within 24 hours
• Reporting line: (317) 232-2655 during business hours; 800-321-OSHA (800-321-6742) outside business hours
• Even employers not required to maintain 300/300A logs: Must still report fatalities, hospitalizations, amputations, and eye losses within the deadlines above

What recordkeeping does IOSHA require?

Employers with more than 10 employees in covered industries must maintain the OSHA 300 log of work-related injuries and illnesses, post the 300A summary annually from February 1 through April 30, and submit electronic injury data to the federal portal. Smaller employers and certain low-hazard industries are exempt from the routine recordkeeping requirement but still must report serious incidents.

What free safety consultation is available?

INSafe is the IOSHA workplace safety and health consultation division. INSafe provides free workplace safety consultation, training, and outreach to Indiana employers. Consultations are confidential and not used for enforcement; they are designed to help employers identify and correct hazards before an inspector arrives.

Are there Indiana-specific safety standards?

IOSHA generally adopts federal OSHA standards but has authority to enforce them more strictly. Specific Indiana rules apply in agriculture, construction, and a handful of other sectors. Employers should review the IOSHA rule database annually and update written safety programs accordingly.

Child Labor and Youth Employment in Indiana

Indiana rewrote its child labor rules effective January 1, 2025, and the 2026 session removed the youth-employer registration mandate effective July 1, 2026. The combined effect: rules that closely mirror federal law for 16- and 17-year-olds and a more complete set of restrictions for 14- and 15-year-olds.

What hours can 14- and 15-year-olds work in Indiana?

• Up to 3 hours on a school day and up to 8 hours on a non-school day
• Up to 18 hours per school week and up to 40 hours per non-school week
• Until 9 PM on any day between June 1 and Labor Day
• Until 7 PM on any other day
• No work before 7 AM at any time

What hours can 16- and 17-year-olds work?

No state hour restrictions. 16- and 17-year-olds can work the same hours and days as adults under Indiana law, with no required parental permission for longer or later hours. Federal hazardous occupation rules continue to apply.

Are work permits required?

No. Indiana eliminated the work permit requirement for minors as part of the 2020 child labor rewrite. Employers should still verify the worker's age (typically with a birth certificate or driver's license) and document the verification in the personnel file.

What about the registration requirement?

Through June 30, 2026, employers with five or more minors aged 14-18 must register the minors in the Youth Employment System (YES) administered by the Indiana Department of Labor. Effective July 1, 2026, the 2026 session repealed the registration requirement and removed the registered employer database.

Are hazardous occupations regulated?

Yes. Federal hazardous-occupations rules under 29 CFR 570 apply to all Indiana minors. Prohibited categories include most operations involving power-driven hoists, certain meat-processing equipment, roofing, mining, and motor vehicle driving for occupations covered under federal child labor rules. Audit job descriptions and shift assignments before placing a minor in any covered role.

Voting Leave, Jury Duty, and Other Civic Leave in Indiana

Indiana provides limited civic leave protections, mostly through state-specific statutes that do not require paid time off but bar adverse action.

Does Indiana have voting leave?

Indiana does not require employers to provide paid time off for voting. Polls are open from 6 AM to 6 PM on election day, which gives most employees time to vote outside scheduled work hours. An employer may not penalize an employee for voting, but is not required to provide paid time off.

Is jury duty leave required?

Under IC 33-28-5-23.1, an employer cannot terminate, threaten, deprive of employment, or coerce an employee because of jury service. Pay is not required during jury service; the employee receives the modest statutory juror per diem. Some employers offer paid jury duty leave as a voluntary benefit.

Is military leave protected?

Federal USERRA applies. Indiana also protects members of the Indiana National Guard and Reserves from adverse employment action for service under IC 10-16-7. Reemployment rights and continuation of certain benefits are required when service ends.

Is witness leave protected?

Yes. Employees subpoenaed to appear in court or before an administrative body cannot be fired or penalized for compliance with the subpoena. Pay during witness service is not required.

Is bereavement leave required?

Not as a state-mandated benefit. Most Indiana employers offer 3 to 5 days of paid bereavement leave for the death of an immediate family member as a competitive recruiting practice, but the state does not require it.

WARN Act and Mass Layoffs in Indiana

Indiana has no state mini-WARN equivalent. The federal Worker Adjustment and Retraining Notification (WARN) Act controls.

When does federal WARN apply?

Employers with 100 or more full-time employees (or 100 employees with combined hours exceeding 4,000 per week) must give 60 days advance notice for:

• Plant closings affecting 50 or more employees at a single site of employment
• Mass layoffs affecting 500 or more employees, or 50 or more employees if at least 33% of the active workforce

Where does the WARN notice go?

• Affected employees (or their union)
• The Indiana Department of Workforce Development
• The chief elected official of the local government where the layoff or closure occurs

What are the exceptions?

Federal WARN includes exceptions for unforeseeable business circumstances, faltering company status, and natural disaster. The exceptions do not always excuse the entire 60-day notice; they can shorten the period to what is practicable. Document the basis for any reduced notice and be prepared to defend it.

What are the penalties for failing to provide WARN notice?

Affected employees can recover back pay and benefits for up to 60 days, plus a civil penalty payable to the local government of up to $500 per day of violation. Class actions are common in WARN cases. An employee relations team running RIF coordination should plan WARN notice timing as a hard-coded gate before any communication to affected workers.

Recordkeeping Requirements for Indiana Employers

Indiana recordkeeping rules layer on top of federal FLSA, FCRA, and FMLA recordkeeping. Practical retention periods:

• Payroll records: 3 years (FLSA floor)
• Time and earnings records: 2 years (FLSA supporting documents)
• I-9 forms: Until the later of 3 years after hire or 1 year after termination
• FMLA records: 3 years
• EEO-1 forms (employers with 100+ employees): Maintained as filed; underlying data 1 year
• OSHA 300 logs: 5 years
• Personnel files: No statutory minimum, but the practical floor is at least the longest applicable statute of limitations (3 years for state wage claims, 2 years for whistleblower claims, plus a margin)

Multi-state Indiana employers often retain personnel records for the duration of employment plus six years to align with the most demanding state in the matrix. Centralized case files reduce the risk that an investigation lands without supporting documentation.

Where Indiana Employees File Complaints

Indiana enforcement is split across several agencies and venues. The most common pathways for HR teams to know in advance:

• Wage Payment Statute claims (still employed or voluntarily resigned): Direct private suit in circuit or superior court under IC 22-2-5
• Wage Claims Statute claims (involuntarily terminated): Indiana Department of Labor first under IC 22-2-9, then court if released
• Discrimination, harassment, retaliation: Indiana Civil Rights Commission (180 days) or EEOC (300 days)
• OSHA / IOSHA complaints: Indiana Department of Labor IOSHA division
• Workers' compensation disputes: Indiana Worker's Compensation Board
• Unemployment insurance disputes: Indiana Department of Workforce Development
• Whistleblower retaliation (IC 22-5-3-3): Direct suit within 2 years
• Local discrimination claims (Indianapolis, Bloomington, Fort Wayne, etc.): Local human rights commissions

Filing windows worth knowing in advance

• ICRC charges: 180 days
• EEOC charges: 300 days
• Wage claims: 2 years (statute of limitations)
• FLSA claims: 2 years (3 years for willful violations)
• Whistleblower claims: 2 years
• Workers' comp injury report: as soon as practicable, generally within 30 days

How AllVoices Helps Indiana Employers Stay Compliant

Indiana's wage payment treble damages, the ICRC's 180-day filing window, the local human rights ordinances in Indianapolis and elsewhere, and the increasing federal reporting volume all turn employee complaint handling into a documentation game. AllVoices is built to centralize that documentation and turn employee reports into defensible records.

Intake that meets every reporting channel

Indiana workers can file with the ICRC, EEOC, the Department of Labor, IOSHA, or local human rights commissions. AllVoices anonymous and named intake routes complaints to the right HRBP, ER lead, or outside counsel with a complete audit trail. Whether a worker reports off the state poster, a handbook QR code, or a Slack DM, the report lands in one queue.

Case management built for Indiana investigations

Indiana wage and discrimination cases are won and lost on documentation. AllVoices case management workflow records every interview, every document request, every credibility finding, and every remediation step. When the ICRC requests the file under its investigation process, the export is one click.

Vera AI for early signal detection

Vera AI is the AllVoices intake assistant. Vera helps employees frame what happened, asks the right follow-up questions, classifies the issue type, and surfaces patterns across reports. For an Indiana employer with manufacturing operations across Indianapolis, South Bend, Fort Wayne, and Evansville, Vera flags a pattern of safety or harassment complaints across one location well before a Civil Rights charge ever lands.

HRIS integrations

AllVoices integrates with Workday, Rippling, Paylocity, BambooHR, Slack, Microsoft Teams, and the major SSO providers, so employee data, manager hierarchy, and case access permissions stay in sync with your system of record. For Indiana employers running federal contracts that need OFCCP audit trails, the integrations close the loop.

Investigations and the playbook

A compliance-first playbook for harassment, retaliation, and wage cases is built into the platform. The playbook walks investigators through what the ICRC, EEOC, and Department of Labor look for: prompt acknowledgement, prompt fact-finding, weighted credibility analysis, and timely remedial action. To see the playbook in a live workspace, schedule a demo of AllVoices.

Frequently Asked Questions About Indiana Labor Laws

What is the Indiana minimum wage in 2026?

$7.25 per hour, the same as the federal FLSA. Indiana has not raised its state minimum wage since the federal rate took effect in 2009. IC 22-2-2-10.5 preempts local minimum wages, so cities and counties cannot set a higher rate for private employers.

Does Indiana require paid sick leave?

No. Indiana has no state paid sick leave mandate, and as of 2026 no Indiana municipality has a paid sick leave ordinance applicable to private employers. Voluntary policies are governed by the employer's handbook.

When are final wages due in Indiana?

On the next regular payday after separation, regardless of whether the employee resigned or was terminated. Late payment can trigger 10%-per-day liquidated damages (capped at double the wages) plus attorney's fees and costs.

Are non-compete agreements enforceable in Indiana?

For most workers, yes, if reasonable in scope, duration, and geography and supported by a legitimate protectable interest. Indiana courts will not rewrite overbroad non-competes; they strike unreasonable provisions and may invalidate the entire restriction. Physician non-competes between a physician and a hospital, hospital parent, affiliated manager, or hospital system are void if entered into on or after July 1, 2025 under the IC 25-22.5-5.5 amendment.

How small does an Indiana employer have to be to avoid the Civil Rights Law?

Five or fewer employees. The Indiana Civil Rights Law applies to employers with six or more employees for at least one day in a calendar year. Federal Title VII applies starting at 15 employees, so Indiana small employers face state-level obligations that pre-date the federal threshold.

Is sexual orientation a protected class in Indiana?

Not at the state level explicitly. The federal Bostock decision reads sex under Title VII to cover sexual orientation and gender identity, which protects workers at employers with 15 or more employees. More than 20 Indiana cities have local ordinances that add explicit protection at lower employer thresholds, including Indianapolis-Marion County, Bloomington, Fort Wayne, South Bend, Evansville, Lafayette, and others.

Can an Indiana employer drug test for marijuana?

Yes. Marijuana remains illegal under Indiana law in both medical and recreational contexts. Indiana employers can run pre-employment, reasonable-suspicion, post-accident, random, and follow-up tests for marijuana, and can take adverse action based on positive results. ADA protections still apply if the employee's disability medication explains the result.

Does Indiana require E-Verify?

For state contractors and recipients of state grants over $1,000, yes, under IC 22-5-1.7. Most other private Indiana employers are not required to use E-Verify, though every employer must complete I-9s under federal law.

The Bottom Line on Indiana Compliance

Indiana looks like a federal-default state at first read and gets specific in a few places that produce real exposure. The Wage Payment Statute's 10%-per-day liquidated damages, the Civil Rights Law's six-employee threshold, the IC 22-9-2 age discrimination coverage that starts at one employee, the EWA licensing rule that took effect January 1, 2026, the IC 25-22.5-5.5 ban on physician-hospital non-competes, and the local human rights ordinances in Indianapolis and other cities all reward employers that build documentation into the workflow from day one.

The 2026 priorities for Indiana HR teams:

• By July 1, 2026: Confirm any contracted Earned Wage Access provider holds an Indiana license under HEA 1125. Audit youth-employment workflows ahead of the registration repeal that takes effect the same day.
• By the next contract renewal cycle: Update physician offer letters and acquisition agreements to remove non-compete language for any agreement involving a hospital, hospital parent, affiliated manager, or hospital system.
• Throughout 2026: Audit pay frequency, wage statements, and final paycheck workflows against IC 22-2-5 and IC 22-2-9. Tighten the policy on uniform and tool deductions to stay inside the $2,500 / 5%-of-disposable-earnings cap. Run an annual reasonableness review of all standing non-competes.
• Throughout 2026: Map all Indiana worksites against local human rights ordinances (Indianapolis, Bloomington, Fort Wayne, South Bend, Evansville, Lafayette, Carmel, Columbus). Maintain city-specific handbook addenda where the local rule extends beyond state coverage.
• Ongoing: Document every harassment, discrimination, and retaliation report under IC 22-9 and Title VII with the rigor an ICRC investigator expects to see. Keep payroll and personnel records for at least the longest applicable statute of limitations plus a margin.

Compliance in Indiana looks straightforward from the outside and gets sharp quickly when an employee report comes in. To see how a structured intake and investigations workflow holds up under Indiana's wage payment, civil rights, and pay practices statutes, explore the AllVoices employee relations platform.