State Law > Indiana > Indiana Wage Payment Law

Indiana Wage Payment Law

 

Indiana wage payment law is located in the Indiana Code in the sections below. Administrative rules are not covered here.
Regulation of Wage Payments

  • IC 22-2-4-1 Payment
  • IC 22-2-4-2 Scrip
  • IC 22-2-4-3 Selling merchandise to employees for higher prices than to others
Frequency of Wage Payments
  • IC 22-2-5-1 Wage payment; voluntarily leaving employment
  • IC 22-2-5-2 Failure to pay
Wage Deductions
  • IC 22-2-6-1 Employee directed wage deductions
  • IC 22-2-6-2 Assignment of wages
  • IC 22-2-6-4 Deduction for overpayment
Deduction From Wage Payments
Wage Claims
  • IC 22-2-9-1 Definitions
  • IC 22-2-9-2 Payment of wages at separation from employment
  • IC 22-2-9-3 Disputes over wages

Regulation of Wage Payments


Sec. 22-2-4-1.

(a) As used in this section, "financial institution" means a financial institution regulated by an agency of the United States or any state.

(b) Every corporation, limited liability company, association, company, firm, or person engaged in Indiana in mining coal, ore, or other mineral, quarrying stone, or in manufacturing iron, steel, lumber, staves, heading barrels, brick, tile, machinery, agricultural or mechanical implements, or any article of merchandise shall pay each employee of the corporation, limited liability company, company, association, firm, or person, if demanded, at least every two (2) weeks, the amount due the employee for labor. The payments shall be made in lawful money of the United States, by negotiable check, draft, or money order, or by electronic transfer to the financial institution designated by the employee.

(c) Any contract in violation of this section is void. This section does not apply where employees and employers by mutual agreement or contract have provided for payments on a weekly basis.

Sec. 22-2-4-2

A person who publishes, issues, or circulates any check, card, or other paper, which is not commercial paper payable at a fixed time in any bank in this state, at its full face value, in lawful money of the United States, with eight percent (8%) interest, or by bank check or currency issued by authority of the United States government, to his employee in payment for any work done or for any labor contracted to be done commits a Class C infraction.

Sec. 22-2-4-3

It is a Class C infraction for a person to knowingly sell to his employee any merchandise or supplies at a higher price than the merchandise or supplies are sold to others for cash.

Sec. 22-2-4-4

Sec. 4. Every corporation, limited liability company, company, association, firm, or person who shall fail for ten (10) days after demand of payment has been made to pay employees for their labor, in conformity with the provisions of this chapter, shall be liable to such employee for the full value of his labor, to which shall be added a penalty of one dollar ($1) for each succeeding day, not exceeding double the amount of wages due, and a reasonable attorney's fee, to be recovered in a civil action and collectable without relief.

Frequency of Wage Payments


IC 22-2-5-1

(a) Every person, firm, corporation, limited liability company, or association, their trustees, lessees, or receivers appointed by any court, doing business in Indiana, shall pay each employee at least semimonthly or biweekly, if requested, the amount due the employee. The payment shall be made in lawful money of the United States, by negotiable check, draft, or money order, or by electronic transfer to the financial institution designated by the employee. Any contract in violation of this subsection is void.

(b) Payment shall be made for all wages earned to a date not more than ten (10) business days prior to the date of payment. However, this subsection does not prevent payments being made at shorter intervals than specified in this subsection, nor repeal any law providing for payments at shorter intervals. However, if an employee voluntarily leaves employment, either permanently or temporarily, the employer shall not be required to pay the employee an amount due the employee until the next usual and regular day for payment of wages, as established by the employer. If an employee leaves employment voluntarily, and without the employee's whereabouts or address being known to the employer, the employer is not subject to section 2 of this chapter until:

(1) ten (10) days have elapsed after the employee has made a demand for the wages due the employee; or

(2) the employee has furnished the employer with the employee's address where the wages may be sent or forwarded.

IC 22-2-5-1.1

Salaried employees who are eligible for overtime compensation under the Fair Labor Standards Act (29 U.S.C. 201 et seq.) are specifically exempted from section 1 of this chapter.

IC 22-2-5-2

Every such person, firm, corporation, limited liability company, or association who shall fail to make payment of wages to any such employee as provided in section 1 of this chapter shall, as liquidated damages for such failure, pay to such employee for each day that the amount due to him remains unpaid ten percent (10%) of the amount due to him in addition thereto, not exceeding double the amount of wages due, and said damages may be recovered in any court having jurisdiction of a suit to recover the amount due to such employee, and in any suit so brought to recover said wages or the liquidated damages for nonpayment thereof, or both, the court shall tax and assess as costs in said case a reasonable fee for the plaintiff's attorney or attorneys.

IC 22-2-5-3

Farmers and those engaged in the business of agriculture and horticulture shall be specifically exempt from the provisions of this chapter.

Wage Deductions

Sec. 22-2-6-1

(a) Any direction given by an employee to an employer to make a deduction from the wages to be earned by said employee, after said direction is given, shall constitute an assignment of the wages of said employee.

(b) For the purpose of this chapter, the term "employer" shall also include the state and any political subdivision of the state.

Sec. 22-2-6-2

(a) Any assignment of the wages of an employee is valid only if all of the following conditions are satisfied:

(1) The assignment is:

(A) in writing;

(B) signed by the employee personally;

(C) by its terms revocable at any time by the employee upon written notice to the employer; and

(D) agreed to in writing by the employer.

(2) An executed copy of the assignment is delivered to the employer within ten (10) days after its execution.

(3) The assignment is made for a purpose described in subsection (b).

(b) A wage assignment under this section may be made for the purpose of paying any of the following:

(1) Premium on a policy of insurance obtained for the employee by the employer.

(2) Pledge or contribution of the employee to a charitable or nonprofit organization.

(3) Purchase price of bonds or securities, issued or guaranteed by the United States.

(4) Purchase price of shares of stock, or fractional interests therein, of the employing company, or of a company owning the majority of the issued and outstanding stock of the employing company, whether purchased from such company, in the open market or otherwise. However, if such shares are to be purchased on installments pursuant to a written purchase agreement, the employee has the right under the purchase agreement at any time before completing purchase of such shares to cancel said agreement and to have repaid promptly the amount of all installment payments which theretofore have been made.

(5) Dues to become owing by the employee to a labor organization of which the employee is a member.

(6) Purchase price of merchandise sold by the employer to the employee, at the written request of the employee.

(7) Amount of a loan made to the employee by the employer and evidenced by a written instrument executed by the employee subject to the amount limits set forth in section 4(c) of this chapter.

(8) Contributions, assessments, or dues of the employee to a hospital service or a surgical or medical expense plan or to an employees' association, trust, or plan existing for the purpose of paying pensions or other benefits to said employee or to others designated by the employee.

(9) Payment to any credit union, nonprofit organizations, or associations of employees of such employer organized under any law of this state or of the United States.

(10) Payment to any person or organization regulated under the Uniform Consumer Credit Code (Sec. 24-4.5) for deposit or credit to the employee's account by electronic transfer or as otherwise designated by the employee.

(11) Premiums on policies of insurance and annuities purchased by the employee on the employee's life.

(12) The purchase price of shares or fractional interest in shares in one (1) or more mutual funds.

(13) A judgment owed by the employee if the payment:

(A) is made in accordance with an agreement between the employee and the creditor; and

(B) is not a garnishment under Sec. 34-25-3.

Sec. 22-2-6-3.

All deductions made before July 1, 1988, by an employer from the wages of an employee, at the request of the employee, or without the objection of the employee, provided the amount so deducted was either retained by the employer and credited upon an indebtedness owing to the employer by the employee, or paid by the employer in accordance with the request of the employee, or without the employee's objection, are hereby legalized, and no action shall be brought or maintained against the employer to recover from the employer the amount so retained or paid.

Sec. 22-2-6-4.

(a) If an employer has overpaid an employee, the employer may deduct from the wages of the employee the amount of the overpayment. A deduction by an employer for reimbursement of an overpayment of wages previously made to an employee is not a fine under Sec. 22-2-8-1 or an assignment of wages under section 2 of this chapter. An employer must give an employee two (2) weeks notice before the employer may deduct, under this section, any overpayment of wages from the employee's wages.

(b) An employer may not deduct from an employee's wages an amount in dispute under Sec. 22-2-9-3.

(c) The amount of a wage deduction made by an employer under subsection (a) is limited to the following:

(1) Except as provided in subdivision (2), the maximum part of the aggregate disposable earnings of an employee for any work week that is subjected to an employer deduction for overpayment may not exceed the lesser of:

(A) twenty-five percent (25%) of the employee's disposable earnings for that week; or

(B) the amount by which the employee's disposable earnings for that week exceed thirty (30) times the federal minimum hourly wage prescribed by 29 U.S.C. 206(a)(1) in effect at the time the earnings are payable.

In the case of earnings for a pay period other than a week, the earnings must be computed upon a multiple of the federal minimum hourly wage equivalent to thirty (30) times the federal minimum hourly wage as prescribed in this section.

(2) If a single gross wage overpayment is equal to ten (10) times the employee's gross wages earned due to an inadvertent misplacement of a decimal point, the entire overpayment may be deducted immediately.


Deduction From Wage Payments

Sec. 22-2-8-1

It is unlawful for any employer to assess a fine on any pretext against any employee and retain the same or any part thereof from his wages. An employer who violates this section commits a Class C infraction.

Sec. 22-2-8-3

It is hereby made the duty of the commissioner of labor to enforce the provisions of this chapter by the processes of the courts, and in the name of the state; and, upon his failure so to do, any citizen of the state is hereby authorized to do the same in the name of the state.

Wage Claims

Sec. 22-2-9-1

Whenever used in this chapter:

(a) The term "employer" means and includes every person, firm, partnership, association, corporation, limited liability company, receiver, or other officer of any court of this state, and any agent or officer of any of the above mentioned classes, employing any person in this state.

(b) The term "wages" means all amounts at which the labor or service rendered is recompensed, whether the amount is fixed or ascertained on a time, task, piece, or commission basis, or in any other method of calculating such amount.

Sec. 22-2-9-2

(a) Whenever any employer separates any employee from the pay-roll, the unpaid wages or compensation of such employee shall become due and payable at regular pay day for pay period in which separation occurred: Provided, however, That this provision shall not apply to railroads in the payment by them to their employees.

(b) In the event of the suspension of work, as the result of an industrial dispute, the wages and compensation earned and unpaid at the time of such suspension shall become due and payable at the next regular pay day, including, without abatement or reduction, all amounts due all persons whose work has been suspended as a result of such industrial dispute.

Sec. 22-2-9-3

In case of a dispute over wages, the employer shall give notice to the employee of the amount of wages which he concedes to be due, and shall pay such amount, without condition, within the time fixed by this chapter, but the acceptance by the employee of any payment made under this chapter shall not constitute a release as to any balance of his claim.

Sec. 22-2-9-4

(a) It shall be the duty of the commissioner of labor to enforce and to insure compliance with the provisions of this chapter, to investigate any violations of any of the provisions of this chapter, and to institute or cause to be instituted actions for penalties and forfeitures provided under this chapter. The commissioner of labor may hold hearings to satisfy himself as to the justice of any claim, and he shall cooperate with any employee in the enforcement of any claim against his employer in any case whenever, in his opinion, the claim is just and valid.


(b) The commissioner of labor may refer claims for wages under this chapter to the attorney general, and the attorney general may initiate civil actions on behalf of the claimant or may refer the claim to any attorney admitted to the practice of law in Indiana. The provisions of Sec. 22-2-5-2 apply to civil actions initiated under this subsection by the attorney general or his designee.

Sec. 22-2-9-5

Sec. 5. The commissioner of labor is hereby authorized to take assignments of wage claims of less than eight hundred dollars ($800.00), rights of action for penalties, mechanics and other liens of workers, without being bound by any of the technical rules with reference to the validity of such assignments; and shall have power and authority to prosecute actions for the collection of such claims of persons who, in the judgment of the commissioner, are entitled to the services of the commissioner and who, in his judgment, have claims which are valid and enforceable in the court. The commissioner shall have power to join various claimants in one (1) preferred claim or lien, and, in case of suit, to join them in one (1) cause of action.

Sec. 22-2-9-6

Sec. 6. (a) In all actions brought by the labor commissioner as assignee under section 5 of this chapter, no court costs of any nature shall be required to be advanced nor shall any bond or other security therefor be required from the commissioner in connection with the same.

(b) Any sheriff, constable, or other officer requested by the commissioner to serve summons, writs, complaints, or orders and all necessary and legal papers within his jurisdiction shall do so without requiring the commissioner to advance the fees or furnish any security or bond therefor.

Sec. 22-2-9-7

Sec. 7. Nothing in this chapter shall be construed to repeal Sec. 22-2-
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