Indiana Overtime Laws

September 15th 2024

It is common for employees to work beyond their normal hours of work. However, according to Indiana Labor Laws, employers are required to compensate employees for their overtime.

In Indiana, you are entitled to time-and-a-half for every hour worked over 40 in a week.

This article will provide information to successfully navigate Indiana’s overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.

This article covers:

Indiana Overtime Rates

Overtime law in Indiana is generally aligned with the federal Fair Labor Standards Act (FLSA). For any hours worked beyond a total of 40 in one work week, the majority of hourly employees in Indiana have the right to an overtime pay rate.

Overtime in Indiana is set at 1.5 times the regular hourly rate.

Since the regular Indiana minimum wage is $7.25 per hour, Indiana’s overtime minimum wage is $10.88 per hour (1.5 times the minimum wage).

Overtime Entitlement in Indiana

According to Indiana overtime laws, overtime pay is required for any non-exempt employee.

Employees who earn below $844 a week ($43,888 annually) and work in a non-exempt industry are entitled to overtime pay.

However, an employee’s overall eligibility for overtime pay will be based on what the job duties are as well as what type of business they are in.

Read more about Overtime Exceptions and Exemptions in Indiana.

Mandatory Overtime in Indiana

Employees in Indiana can be asked to work overtime (mandatory overtime) as long as they are properly compensated at the overtime rate required by state and federal law.

There are no restrictions that specify how much notice must be provided to the employee or the maximum number of hours that can be worked in a single shift. 

It’s important to note that some industries, like transportation and trucking, may have different safety regulations that call for restrictions on the number of hours worked in a specific period.

Overtime for Tipped Employees in Indiana

A tipped employee in Indiana is entitled to overtime compensation. However, their minimum wage is lower than the standard state minimum wage. 

In this case, the Indiana minimum wage is $7.25 and the minimum tipped employee wage is $2.13.

However, if a tipped employee works overtime hours, their overtime rate will be calculated based on the full minimum wage, and not the lower wage that they are being paid.

Overtime for On-Call Employees in Indiana

In Indiana, if a non-exempt employee is “on call”, they can still be entitled to overtime pay. 

Overtime can only be provided if their on-call duties put them at over 40 hours of work in a week.

If an employee is required to perform actual work during an on-call duration, the time spent working can be compensated at an overtime rate (if it exceeds 40 hours per week). The time taken to travel to and fro during an on-call period can also be counted as extra hours worked as long as it occurs outside the employee’s regular hours.

However, if an on-call employee does not receive any duties and is only waiting, it shall not be included in the calculation of hours worked to compensate for overtime.

Overtime Exceptions and Exemptions in Indiana

Under federal FLSA overtime regulations, the state of Indiana has specific exemptions and exceptions concerning overtime requirements. Essentially, if a worker earns a minimum of $844 each week, they might not be entitled to overtime pay if they fall under specific categories, such as:

  • Executives and Administrative personnel
  • Educators
  • Computer workers
  • Outside salespersons
  • Seasonal amusement and recreation establishment staff
  • Commissioned workers
  • Taxi drivers

Statute of Limitations For Unpaid Overtime Claims in Indiana

According to Indiana law, the statute of limitations for filing a complaint regarding overtime (or other unpaid wages) is 2 years.

For willful violations, the statute of limitations is 3 years.

Penalties for Not Providing Overtime Pay to Employees in Indiana

When nonexempt employees are not compensated for their overtime hours worked, they are entitled to damages under Indiana and federal law. 

Employees can recover the difference between the pay their employer gave them and the agreed-upon rate. 

They can also claim “liquidated damages” which is a predetermined amount that is already specified in a contract/law that will be considered when a violation occurs.

Other examples of what an employee may be entitled to if their employer unlawfully withheld overtime pay:

  • Back pay
  • Damages
  • Attorney’s fees
  • State civil penalties

Legal Cases Relating to Overtime Compensation in Indiana

Below, we present law cases relating to fair overtime compensation for employees in Indiana: 

1. Employee Tries to Argue an Agreed-Upon Settlement Arrangement Regarding Overtime Pay

In the case of Sanders v. Connan’s Paint and Body Shop, LLC., Bobby Sanders filed a lawsuit claiming that his former employer, Connan’s Paint and Body Shop (Connan) had failed to provide overtime compensation. Additionally, Sanders also claimed that Connan had failed to pay him the minimum wage. While working for Connan, Sanders was paid on an hourly basis and received commissions.

Sanders claimed that neglecting to pay him overtime was a violation of the FLSA. Connan denied Sanders’ allegations and argued that Sanders was not entitled to overtime pay because he was a commissioned employee and was exempt from the FLSA’s overtime requirements.

The case went to trial and the jury found that Sanders was entitled to overtime. Sanders agreed to a settlement that awarded $3,750 at a rate of $250 per day for 15 days (the number of days Sanders claimed he was not compensated for overtime). One of the contingencies of the settlement was that Sanders had to withdraw the lawsuit.

Later on, Sanders attempted to argue that this settlement did not cover his FLSA claims. However, this argument is inconsistent with his agreement to the settlement which included his claims for overtime pay violations. 

Therefore, the court continued with the motion to dismiss the case after Sanders had been awarded the agreed amount. 

Key lessons from this case:
  • Both parties may negotiate and agree on a settlement that can include specific payment amounts from employers and withdrawal of the lawsuit on the employee’s side.
  • Employees or employers should adhere to the terms of a settlement agreement once executed. Any attempts to revive claims that were meant to be resolved can be unsuccessful.
  • An employee needs to know what the desired outcome of a lawsuit is to avoid dissatisfaction with settlement conditions.

2. Tow Truck Driver Attempts to Claim Overtime Pay Despite Being Exempted

In the case of Johnson v. Hix Wrecker Service, Inc., Bobby Johnson claimed that his employer, Hix Wrecker Service (Hix) a tow truck company, did not provide overtime compensation for the hours worked over 40 per week. Johnson claimed that as a tow truck driver, he worked 12-hour shifts for 6 days a week. He was only paid a flat rate but was never paid overtime.

Hix argued that Johnson was exempt under the FLSA because he was a motor carrier employee. The FLSA exempts employees who are employed by motor carrier companies engaged in interstate commerce and whose hours are regulated by the Secretary of Transportation. 

The Court of Appeals affirmed that Johnson was subject to the Secretary of Transportation’s regulations and also affirmed that Hix was involved in interstate commerce.

As a result, the Court of Appeals decided that Johnson was not entitled to overtime pay and awarded Hix with an amount that covered costs and attorney’s fees.

Key lessons from this case:
  • Employees of motor carrier companies engaged in interstate commerce are exempt from overtime pay if their hours are regulated by the Secretary of Transportation.
  • Costs and attorney’s fees can be awarded to the side that wins the court case. It is not only for the person who filed the lawsuit.
  • Employers who are engaged in interstate commerce must comply with regulations set by the Secretary of Transportation.

3. Employee Seeks Compensation for Unauthorized Overtime Hours

In the case of Melton v. Tippecanoe County, James Melton, a former employee of the Tippecanoe County Surveyor’s Office (County), alleged that he was not properly compensated for his overtime hours. Melton claimed that this was a violation of the FLSA.

Melton had asked his supervisor if he could take a class during work hours and make up for the missing time by having shorter lunches and coming to work earlier. Melton’s supervisor denied his request and said that the missing time would be considered “unpaid”.

To solve that, Melton worked through his lunch hour one day and arrived early on three days during the week. He was compensated for his extra hours but was fired later on as he went against his supervisor’s orders.

After being fired, Melton decided to file a lawsuit alleging that his timecards did not properly record the hours he had worked throughout his employment. Melton claimed that his timecards were being altered to only a maximum of 37.5 hours per week and he also that he was not compensated for the times he started work before 8 am. 

Melton presented a spreadsheet that he created from memory as evidence to support his claims that he deserved overtime pay but the County argued that this was unreliable.

The district court ultimately granted a summary judgment that favored the County as Melton did not have enough to establish an FLSA violation. The court decided that Melton could not provide evidence to support his spreadsheet.

Although Melton had decided to appeal this summary judgment, the Court of Appeals also agreed to grant the summary judgment to the County.

Key lessons from this case:
  • Testimony or evidence provided by the employee must be credible and plausible, and unsupported claims may be rejected without a trial.
  • Despite working overtime without permission, an employer still needs to pay for the overtime hours an employee works.
  • Melton’s termination is not considered retaliation for alleged overtime violations but was for disobeying his superior’s orders.

Learn more about Indiana Labor Laws through our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.