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Payment of Wages: Indiana

Payment of Wages requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Authors: Stuart R. Buttrick, Susan W. Kline and Tareen Zafrullah, Faegre Drinker Biddle & Reath LLP


  • The term wages is broadly defined in the Indiana wage payment law. See Definition of Wages.
  • Indiana employers may pay employees in cash, or by check, draft, money order or electronic funds transfer. See Wage Payment Methods.
  • All employees must be paid within 10 business days after the pay period ends. Pay frequency may vary depending on the employer's industry. Penalties are imposed for violations of the pay frequency rules. See Pay Frequency.
  • Indiana law treats deductions from an employee's wages made at the direction of the employee as wage assignments. Wage assignments are valid only if certain conditions are met and only if made for certain reasons. Penalties are imposed for violations. See Permitted and Prohibited Wage Deductions.
  • With each payment of wages employers are required to provide each employee with an itemized pay statement. Indiana law requires that the statement include certain types of information. See Pay Statement Requirements.
  • Employees who are terminated, whether involuntarily or voluntarily, must be paid by the next regularly scheduled payday after the employment ends. Special rules apply if the employer does not know the current whereabouts of an employee who quits. Penalties are imposed for violations. Employers should have clear written policies if they wish to limit when and under what circumstances they will pay employees for accrued vacation time. Indiana courts have held that in some circumstances, accrued sick pay may constitute wages subject to Indiana's wage and hour laws. See Final Pay.
  • Indiana law includes provisions concerning the payment of wages owed to a deceased employee. See Deceased Employee Wages.
  • Wages are considered abandoned property if they are unclaimed by an employee for one year. Indiana law requires that employers file a report and turn over the paycheck to the state. Employers are also required to notify affected employees of their unclaimed wages within a certain time period. Penalties are imposed for noncompliance. See Unclaimed Wages.
  • In the event of a wage dispute, an employer must give the employee notice of the amount of wages the employer concedes is due, and must pay that amount to the employee. The employee's acceptance of the undisputed amount does not release the employer as to the balance of the disputed amount. See Wage Claims.