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Your Guide to the Minimum Wage in Indiana

This article doesn’t constitute legal advice. Please consult a lawyer or accountant in your state to learn more about minimum wage legislation as it applies to your business.
Meredith Galante, Writer

There’s been a lot of news about changes to the minimum wage. And since the minimum wage can vary by state, county, and even by city, it can be confusing to know what you actually need to pay your employees. Indiana business owners, we’ve got a short summary for you.

We’ve compiled what you need to know about the minimum wage in Indiana and provided some ideas on how to prepare for any future changes.

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What is the minimum wage in Indiana?

The Indiana minimum wage is $7.25 an hour, the same as the federal minimum wage. Employers that have two or more employees must follow this minimum wage. The Indiana minimum wage was last changed in 2008, when it was raised by $0.60.

Some employees who are exempt from this minimum wage include:

  • Tipped employees must be paid a cash minimum of $2.13 per hour, with a $5.12 tip credit to earn $7.25 an hour (including tips).
  • A special training minimum wage of $4.25 per hour can be paid to workers under 20 years of age for the first 90 days of employment.
  • Full-time high school and college students can be paid 85 percent of Indiana minimum wage ($6.16) if they are participating in a work-study program or working 20 or fewer hours per week.

Will there be an Indiana minimum wage increase in the future?

Currently there’s a bill with the Indiana General Assembly that would increase the statewide minimum wage. If passed, the bill will raise the minimum wage from $7.25 an hour to $10 an hour starting June 30, 2021. It would increase again to $13 by 2022, and to $15 by 2023.

How should Indiana business owners prepare for changes to the minimum wage?

Since Indiana has proposed laws to raise its wages consistently over the next couple of years, it’s time to get prepared. Here are some steps to help you be ready for an increase in minimum wage in Indiana:

  • Know your stuff: Make sure you do research and stay up to date with upcoming changes. If you’re unsure which wage regulations apply to you, talk to your local Chamber of Commerce or other business liaisons at city hall.
  • Look at your budgets: Check your budgets and cash flow in detail and create a hiring plan that you can afford. Luckily, Indiana minimum wage laws give you some time to prepare. Keep this in mind when hiring new people or giving raises.
  • Make smart hiring choices: Employee turnover can be costly in terms of both time and money. You’ll save in the long run (and have more money for your growth) if you take time in hiring, training, and retaining your employees.
  • Update your technology: Making operations more efficient will save you money and time in the long run. So think about ways that technology can help reduce those costs. For example, you might automate payroll instead of doing it yourself.

As always, to make sure your business is prepared and stays in compliance (such as getting an EIN), you should discuss Indiana’s minimum wage and overtime laws with your accountant and lawyer.

Meredith is a freelancer writer based in New York City. She’s been writing for Square since 2017 where she’s covered everything from the best software for restaurants to use to maximize profit, minimum wage laws across the country, and tips for entrepreneurs to maximize their impact.