Hiring Laws in Indiana

Indiana employment laws align closely with federal standards while maintaining a limited state-level regulatory framework. The state’s Indiana Department of Labor, Indiana Civil Rights Commission (ICRC), and the Equal Employment Opportunity Commission (EEOC) oversee most employment standards, including wage and hour rules, anti-discrimination protections, new hire reporting, and workplace safety.

One of the most notable aspects of Indiana employment law is its balance of employer-friendly regulations with targeted worker protections. Indiana’s minimum wage has remained unchanged since 2009, while anti-discrimination protections extend to smaller employers (6+ employees) than federal law requires. Indiana also maintains unique workforce development requirements through the Indiana Youth Employment System (YES) for employers with five or more minor employees.

These rules reflect Indiana’s approach of utilizing federal standards as the baseline while providing targeted state protections for smaller employers.

Indiana Hiring Laws

Anti-Discrimination and Equal Opportunity Laws

The Indiana Civil Rights Law (Indiana Code Title 22, Article 9) prohibits discrimination in employment based on race, religion, color, sex, disability (mental or physical), status as a veteran, national origin, and ancestry. Indiana’s anti-discrimination law provides broader protection for disabled employees than the similar federal statute (Americans with Disabilities Act), because Indiana law does not require that the employee have a substantial limitation of a major life activity.

Indiana law applies to employers who employ six or more people, which is significantly lower than federal Title VII’s 15-employee threshold. Why the 6-employee threshold? Indiana determined that discrimination can occur in smaller workplaces and that workers deserve protection regardless of company size. This broader coverage ensures that even employees in small businesses receive state-level anti-discrimination protections.

Exceptions to Indiana’s anti-discrimination coverage include religious institutions, exclusively social clubs not organized for profit, and individuals hired as domestic service workers (personal housekeepers, babysitters, etc.). Additionally, certain small businesses with revenue under $500,000 not involved in interstate commerce may be exempt.

Employers are required to provide reasonable accommodations for individuals with disabilities unless it causes undue hardship. Employers must also maintain written policies addressing non-discrimination and equal employment opportunity.

Pay Equity and Minimum Wage

Indiana’s minimum wage is $7.25 per hour, which matches the federal minimum wage. The Indiana minimum wage has not increased since 2009, meaning the state has maintained the same rate for over 15 years. This stasis has resulted in erosion of purchasing power through inflation.

For more details, visit the Indiana Department of Labor Minimum Wage Page.

• Tipped employees: The minimum cash wage for tipped employees is $2.13 per hour. Employers may take a tip credit of up to $5.12, but total earnings must reach at least $7.25 per hour. Employers must ensure compliance: if an employee’s wages and tips do not total $7.25 per hour, the employer must make up the difference for that shift.
• Youth/Training wage: Employers may pay a youth/training minimum wage of $4.25 per hour. Federal youth wage applies to workers under 20 during their first 90 consecutive calendar days of employment.
• Proposed increases: While proposals to increase Indiana’s minimum wage have been consistently advocated for by some in state government, there are currently no enacted legislation setting future increases. However, continued legislative activity suggests this landscape could change.

Indiana follows federal equal pay requirements. Employers should retain records demonstrating the basis for any wage differences between employees of different sexes performing substantially equal work.

Background Checks and Criminal History Rules

Indiana does not have a statewide ban-the-box law for private employers. Employers may inquire about an applicant’s criminal history at any point during the hiring process. However, expunged or sealed records require special handling—if an applicant’s criminal record has been expunged or sealed, the applicant may truthfully state that the conviction did not occur.

When using third-party background screening services, the Fair Credit Reporting Act (FCRA) applies. Employers must obtain written consent before running a background check and provide adverse action notices if denying employment.

I-9 and Employment Eligibility Requirements

Like all U.S. states, Indiana employers are required to verify the identity and employment eligibility of new hires using Form I-9.Employers must complete Form I-9 within three business days of a new hire’s start date and retain forms for three years after hire or one year after termination, whichever is later.

State-Specific Hiring Rules

Indiana enforces additional hiring-related requirements that employers should be aware of:

Penalties for Non-Compliance in Indiana

Indiana takes non-compliance seriously. Employers who fail to follow state and federal hiring laws can face significant financial and legal consequences.

• Wage and Hour Violations: Employers who violate minimum wage, overtime, and wage payment laws are subject to civil penalties enforced by the U.S. Department of Labor. Violations can result in back wages, liquidated damages (double the unpaid wages), and attorney fees.
• Discrimination Violations: Employees can file discrimination complaints with the ICRC within 180 days of the alleged discriminatory act. If the ICRC or EEOC finds that an employer violated anti-discrimination laws, it may order remedies including back pay, front pay, emotional distress damages, and punitive damages.
• Employee Lawsuits: Employees can file complaints with the Indiana Civil Rights Commission or pursue civil lawsuits for discrimination or retaliation. If your workplace has between 6 and 14 employees, you should file with the ICRC, as the EEOC enforces federal law which covers only employers with 15 or more employees.
• FCRA Violations: Improper background check procedures can result in fines of $1,000+ per applicant, with significantly higher exposure in class-action lawsuits.
• Form I-9 Violations: USCIS fines can range from $281 to $2,789 per form for paperwork errors, and $678 to $27,894 per violation for knowingly hiring unauthorized workers (as of 2025).
• New Hire Reporting Non-Compliance: Non-compliance with new hire reporting requirements can result in fines up to $25 per violation. If it is determined that the employer and employee conspired to not report the employee, the penalty can be up to $500 per newly hired employee.
• Child Labor Violations: Indiana employers violating child labor laws face civil penalties ranging from $50 to $400 for various violations, with Indiana Youth Employment System (YES) violations potentially reaching $400 per infraction, per minor employee.

Notice and Documentation HR Professionals Need to Know

HR professionals must maintain the following key documents to stay compliant:

• Completed Form I-9s for All New Hires- Federal law requires all employers to verify an employee’s identity and eligibility to work in the U.S. via Form I-9. These forms must be completed within three business days of hire and stored securely for the required retention period: either three years after the hire date or one year after termination, whichever is later. For additional guidance on I-9 compliance, consult the USCIS I-9 Handbook.
• New Hire Reporting to Indiana New Hire Center- All new hires and rehires must be reported to the Indiana New Hire Reporting Center within 20 days of their hire date. As of July 1, 2025, reports must be submitted electronically through approved methods. Reports should include the employee’s name, address, Social Security number, date of birth, date of hire, and the employer’s FEIN. Submit reports to the Indiana New Hire Reporting Center.
• Youth Employment System (YES) Documentation- Employers with 5 or more minor employees must use the Indiana Youth Employment System (YES) to track and report minor-employee information. Maintain complete records demonstrating compliance with YES requirements and the information reported.
• Background Check Documentation- Employers must retain written consent forms, background check reports, and copies of any adverse action notices provided to applicants. These records should be kept for at least one year and demonstrate compliance with FCRA requirements.
• Written Policies on Non-Discrimination and Equal Opportunity- Employers are required to display clear, written policies outlining their commitment to equal employment opportunity and non-discrimination. These policies should be included in employee handbooks and posted in visible areas of the workplace to ensure accessibility for all staff, as required by Indiana’s Civil Rights Law.
• Retention of Job Applications and Interview Notes- Indiana employers are advised to retain job applications, interview notes, and hiring records for a minimum of two years. This documentation can be critical if hiring decisions are later questioned or challenged in discrimination complaints.
• Wage and Hour Records-Employers must maintain accurate records of hours worked, wages paid, and deductions for each employee. The Indiana Department of Labor requires these records to be kept for at least three years and made available during audits or investigations.
• Posters and Workplace Notices- Certain notices, such as those covering minimum wage, discrimination, workers’ compensation, unemployment insurance, and employee rights must be displayed prominently in the workplace. HR should routinely verify that all state and federal posters are up-to-date and clearly visible to employees. Posters are available through the Indiana Department of Labor.