What Is the Minimum Wage in Indiana?

Nicolas Cesare
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2020 Minimum Wage in Indiana: $7.25

The minimum wage in Indiana is $7.25 per hour. That’s the same amount as the federal minimum wage. The Indiana minimum wage applies to hourly laborers with some exemptions. Only a few exceptions exist to Indiana’s $7.25 per hour minimum wage. 

Workers under the age of 20 have a minimum wage of $4.25 for the first 90 days of employment. This is intended as a training wage for companies that hire young people without much experience in their field and train them to become competent workers. It’s illegal in the state of Indiana for a company to take advantage of this training wage by firing a young employee after their first 90 days in order to avoid paying the full minimum wage.

Similarly, high school or college students who participate in work-study programs are only entitled to 85% of the standard Indiana minimum wage. That comes out to $6.16 per hour. However, this limited wage only applies to certain qualifying employment programs, and only for 20 hours of work per week.

Tipped: $2.13

Employers in the state of Indiana are allowed to claim a tip credit of up to $5.12 per hour in order to offset the minimum wage paid to tipped employees. In Indiana, tipped employees are employees who make any portion of their income from a job through tips from customers. The tip credit is intended to account for the tips that an employee receives directly from customers and, ideally, a tipped employee’s tips and wages should always add up to equal the standard minimum wage of $7.25 per hour.

If an employer claims the maximum tip credit in Indiana, they would only be required to pay a wage of $2.13 to their tipped employees. However, if the employee does not make at least the minimum wage after receiving tips, the employer must make up the difference.

Weekly: $290

A worker who worked 40 hours in a week at minimum wage in the state of Indiana could expect to make $290 per week. However, this amount does not include the cost of fringe benefits such as health insurance premiums or retirement account contributions, which an employer may offer and which may be paid directly out of an employee’s paycheck. It also does not include taxes deducted directly from an employee’s paycheck, such as social security tax.

Annually: $15,080

A worker who works 40 hours per week for 52 weeks out of the year would make $15,080 in that year. Once again, however, this amount does not include deductions from an employee’s paycheck, such as health insurance premiums, IRA contributions, and taxes.

Overtime: $10.88

Hourly employees who work more than 40 hours in a week at a single job in the state of Indiana are entitled to overtime pay. In Indiana, overtime pay is calculated at 1.5 times the employee’s normal hourly wage. Someone who works overtime at minimum wage could expect to make $10.88 an hour for each hour over 40 that they work in a given workweek.

Indiana Minimum Wage Increase News

Like many states, the Indiana state legislature has recently considered bills and recommendations to update its minimum wage. During the 2018 legislative session, State Senator Frank Mrvan introduced Senate Bill 121, which would have raised the minimum wage to $10 an hour in 2019, $13 an hour in 2020, and finally $15 an hour in 2021. 

In 2022 and beyond, the minimum wage would have been tied to the Consumer Price Index, a measurement of the average price of goods in the United States. Ultimately, this bill was not passed by the Indiana State Senate. However, it is just one of many attempts in a number of states, and at the federal level, to adopt a $15 minimum wage.

In December 2019, Sen. Mrvan introduced Senate Bill 176, which featured the same proposal as Bill 121. However, this bill seeks to raise the minimum wage in Indiana to $15 an hour by 2023. 

“Indiana’s minimum has been stagnant at $7.25 for nearly a decade, and it hasn’t even kept up with inflation or cost of living,” Sen. Mrvan said. “It simply isn’t a realistic wage that a person could rely on to make ends meet. We have to support working-class Hoosiers and increase the minimum wage.”

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