Staying compliant in Indiana often starts with understanding meal and rest break requirements.
State requirements can interact with federal standards, and in some areas, local rules may layer on additional obligations for employers.
Indiana’s wage and hour framework aligns closely with federal law, offering a consistent and predictable system for employers.
The state follows the federal minimum wage, has no statewide paid sick leave requirement, and preempts local governments from setting separate wage or leave ordinances. Employers can maintain compliance by implementing clear, written policies around pay, time off, and reimbursements.
Partnering with an Employer of Record (EOR) like HireArt helps simplify compliance and ensure adherence to federal and state labor standards.
This blog is based on information available to HireArt as of October, 2025. HireArt does not provide tax, accounting or legal advice. This material has been prepared for informational purposes only, and should not be relied on for, tax, legal or accounting advice. Consult your own tax, legal and accounting advisors before engaging in any related activities or transactions.
Indiana follows the federal minimum wage established by the Fair Labor Standards Act (FLSA).
As of 2025, the minimum wage in Indiana is $7.25 per hour. The state does not have its own higher rate and preempts local governments from setting separate minimum wage ordinances. This creates a uniform standard statewide for all employers.
Employers must follow the higher applicable rate between state and local law.
Indiana does not require employers to provide paid sick leave.
Employers may create their own paid or unpaid sick leave programs and should clearly outline accrual, usage, and carryover policies in employee handbooks. Transparent documentation helps ensure consistent treatment and compliance with FLSA and recordkeeping rules.
Indiana preempts local governments from enacting their own wage or leave ordinances.
This means employers throughout the state follow the same statewide standards, eliminating the need to track varying local rules. Businesses operating across multiple Indiana locations can therefore maintain consistent HR policies.
Indiana does not require meal or rest breaks for adult employees.
Employers should rely on their internal policies, collective bargaining agreements (CBAs), and federal FLSA guidelines. Although breaks are not legally required, providing rest periods supports workplace safety and productivity.
Payment of unused paid time off (PTO) at termination depends on the employer’s written policy or employment contract.
Indiana law typically enforces the employer’s policy as written. If accrued vacation or PTO is considered earned wages, it must be paid out upon separation. Clearly written policies help prevent disputes and ensure compliance.
Reimbursement requirements in Indiana are policy-driven.
The state does not have a general statute requiring employers to reimburse for business-related expenses. Employers should maintain written reimbursement procedures defining which expenses are eligible—such as travel, tools, or remote work costs—and how repayment requests are handled.
Indiana requires employers to provide itemized wage statements and to pay final wages promptly after separation.
Accurate wage documentation and timely payment are essential to compliance and employee satisfaction.
Indiana applies both state and federal economic-realities tests to determine whether a worker should be classified as an employee (W-2) or an independent contractor (1099).
If an employer directs how, when, or where work is performed, the individual must be classified as an employee. Misclassification can lead to fines, back pay, and tax penalties at both state and federal levels.
HireArt acts as an Employer of Record (EOR) to help companies manage compliance with Indiana’s wage and hour requirements. Through HireArt, employers can:
By partnering with HireArt, employers can streamline workforce management, minimize compliance risk, and maintain fair, consistent employment practices across Indiana.
