labor lawAdivision of labor law center

On July 24, 2008 both the Indiana and federal minimum wages will increase by 70 cents from $5.85 per hour to $6.55 per hour.

Under the federal Fair Labor Standards Act or FLSA, employers must pay the federal minimum wage. The FLSA applies to employers who engage in interstate commerce, or who have annual revenue of $500,000. In addition, the FLSA may apply to some workers who are engaged in interstate commerce, even if it does not apply to the business as a whole. Schools, hospitals and health care facilities are covered by the FLSA, as are federal, state and local government agencies. The FLSA is enforced by the Wage and Hour Division of the U.S. Department of Labor. The South Bend office can be reached at 574-236-8331.

The Indiana minimum wage law covers smaller employers in the state. By statute, the Indiana minimum wage mirrors the federal rate. So, when the federal minimum wage increases on July 24, 2008 the Indiana minimum wage will increase, as well. This law is enforced by the Wage and Hour Division of the Indiana Department of Labor.

Both the Indiana and federal minimum wage will increase again on July 24, 2009 when the rate will go up by 70 cents, from $6.55 per hour to $7.25 per hour.

Both the FLSA and the Indiana minimum wage require employers to pay workers at 1.5 times the usual hourly rate when working over 40 hours in the payroll week.

Under Indiana law, employees under 20 years of age may be paid $4.25 per hour during the first 90 consecutive days of work for an employer.

Tipped employees must be paid at least $2.13 per hour under both Indiana and federal law. If the employee does not earn an average of at least $3.72 per hour in tips over the payroll period, the employer must pay the difference between combined tips and wages earned and the minimum wage. On July 24, this tip credit will increase to $4.37 per hour. When working more than 40 hours per week, tipped employees must earn at least $8.78 per hour in wages and tips combined. On July 24, this will increase to $9.83 per hour.

More Indiana Minimum Wage

Although the Indiana minimum wage applies to most employees in the state, there are a number of exceptions under the law. Indiana Code 22-2-2-3 subsections (a) through (p) permit certain employees to be paid less than the state minimum wage.

Employees who are less than 16 years old may be paid less than the minimum wage. Independent contractors and commissioned sales people, including insurance sales people, are exempt from the Indiana minimum wage. So are employees who work for their parent, spouse or child.

The Indiana minimum wage law contains a special exemption for members of a religious order performing any service for that order. This includes any ordained, commissioned or licensed minister, rabbi, sexton or Christian Science reader. It also includes volunteers performing services for any religious or charitable organization.

Student nurses may be paid less than the minimum wage while working at a hospital or nurses training school and enrolled in classes. The nursing school must be approved under law or chartered. Medical interns and residents in an accredited hospital are exempt from the state minimum wage.

In addition, student funeral directors may be paid less than the state minimum wage while studying for an embalmer’s or funeral director’s license. In fact, students working for any school, college or university in which they are enrolled are exempt. All the aforementioned students including student nurses and funeral directors must regularly be attending classes.

People with physical or mental disabilities performing services for nonprofit organizations such as sheltered workshops are exempt from the Indiana minimum wage laws. However, these employers must be organized primarily for the purpose of providing employment, therapy or rehabilitation to the disabled, not for profit.

Many summer camp employees are exempt from the state minimum wage law because they are performing services for a camping, recreational or guidance facility operated by a charitable, religious or educational nonprofit organization.

Many workers engaged in agricultural labor are exempt from the Indiana minimum wage. This specifically includes those raising, shearing or caring for livestock, bees, poultry, furbearing animals and wildlife. It also includes those harvesting maple syrup, raising mushrooms, hatching poultry, operating ditches and canals for farming purposes. Workers engaged in drying, packing, packaging, processing or freezing fruits and vegetables are also exempt.

Some of these employees may be entitled to the federal minimum wage.

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