Indiana Employer HR Compliance Guide

Priority Compliance Actions

• 1Audit final paycheck and wage payment workflows to ensure compliance with IC 22-2-5 and IC 22-2-9, including the treble-damages exposure for late or withheld wages.
• 2Verify that any Earned Wage Access provider used is licensed under Indiana HEA 1125 (effective July 1, 2026).
• 3Confirm E-Verify enrollment and consistent use for all new hires to satisfy Indiana's layered verification mandate.
• 4Review and update any physician employment or acquisition agreements to remove non-compete clauses involving hospital or hospital-system relationships.
• 5Post the current Indiana minimum wage notice in a conspicuous location and maintain payroll records (hours, wages, deductions) for a minimum of three years.

Leave Laws

Federal FMLA applies to Indiana employers with 50 or more employees, providing up to 12 weeks of unpaid, job-protected leave. Indiana imposes no state paid sick leave mandate. State law does require unpaid leave for military service, military family leave, jury duty, Civil Air Patrol duty, and emergency responder duties. Breastfeeding break requirements also apply under state law.

Wage & Hour

Overtime is governed by the FLSA at 1.5x the regular rate for hours over 40 per workweek; Indiana has no more-generous state overtime rule. Final wages must be paid by the next regular payday (generally within 10 business days of separation) under IC 22-2-9; failure to pay can trigger treble damages and attorney's fees under IC 22-2-5. Employers must pay at least bi-weekly and may use direct deposit only with the employee's written consent. Uniform and tool deductions are capped at $2,500 or 5% of disposable earnings per pay period.

Worker Classification

Indiana is an at-will employment state, with exceptions for discriminatory termination and public policy violations. Independent contractor classification is evaluated under the federal economic-reality test for FLSA purposes and the IRS common-law test for tax purposes; Indiana does not use an ABC test. Non-competes are generally enforceable if reasonable in scope, duration, and geography, though a 2025 law prohibits non-competes between hospitals/hospital systems and physicians.

Hiring & Onboarding

Indiana has no statewide ban-the-box law for private employers, and criminal background checks may go back indefinitely with no state-imposed lookback limit. There is no state salary history ban. Indiana has a layered E-Verify mandate requiring most employers to verify new hires through the federal E-Verify system. New hire reporting must be submitted to the Indiana New Hire Reporting Center within 20 days of the hire date.

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