🇺🇸 Indiana Minimum Wage — 2026 UPDATE

Indiana Minimum Wage 2026

⚠️Informational only — not legal or tax advice.

Last Updated: February 4, 2026
Last Reviewed: February 4, 2026
Applicable Period: 2026
Jurisdiction: State of Indiana, United States
Update Schedule: Quarterly reviews in 2026; annual reviews thereafter

Minimum Wage in Indiana 2026

Table of Contents

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Introduction

The minimum wage in Indiana establishes the lowest hourly compensation that employers must legally provide to covered employees. For 2026, Indiana adopts the federal minimum wage of $7.25 per hour, which has remained unchanged since July 24, 2009. The state permits tip credits for tipped employees and prohibits local jurisdictions from establishing higher minimum wage rates.

Minimum wage regulations in Indiana operate under Indiana Code Title 22, Article 2, Chapter 2 alongside federal requirements established by the Fair Labor Standards Act (FLSA). When employers are covered by both state and federal minimum wage provisions, the federal rate applies. The Indiana Department of Labor administers wage and hour laws in Indiana, including minimum wage enforcement.

This page provides an authoritative overview of Indiana minimum wage law for 2026, including current rates, tipped employee provisions, youth wage provisions, coverage and exemptions, enforcement procedures, and compliance requirements. All information is compiled from official government sources.

Indiana Minimum Wage — 2026 Quick Reference
Category Rate Effective Date Official Source
State minimum wage Federal rate applies — IC § 22-2-2-4
Federal minimum wage $7.25/hour July 24, 2009 U.S. DOL
Tipped minimum wage $2.13/hour — FLSA § 203(m)
Tip credit allowed Yes (up to $5.12) — Federal law
Youth minimum wage $4.25/hour — FLSA (first 90 days)
Local minimum wages Prohibited — IC § 22-2-2-10.5
Next scheduled increase None N/A —
Rate adjustment mechanism Fixed — Adopts federal rate

Last verified: February 4, 2026 via Indiana Department of Labor

Overview of Minimum Wage Law in Indiana

Legal Authority

Indiana minimum wage requirements are established under Indiana Code Title 22, Article 2, Chapter 2, known as the Minimum Wage Law of 1965. The Indiana Department of Labor administers and enforces minimum wage regulations in Indiana through its Wage and Hour Division. The full text of Indiana’s minimum wage law is available in the Indiana Minimum Wage Explanation PDF published by the Department of Labor.

Relationship to Federal Law

Under the Fair Labor Standards Act (FLSA), the federal minimum wage establishes a floor of $7.25 per hour for covered employers and employees. Indiana law adopts the federal minimum wage rate by reference under Indiana Code § 22-2-2-4(c). Most Indiana employers and employees are covered by the federal FLSA, which preempts state minimum wage requirements for covered employers.

Employers who are subject to the federal Fair Labor Standards Act are not covered by Indiana’s minimum wage law. Indiana’s state minimum wage law applies primarily to employers with at least two employees in a workweek who are not covered by federal law. For these employers, Indiana requires payment of the federal minimum wage rate.

Coverage Scope

Indiana minimum wage law applies to employers employing at least two employees during a workweek who are not covered by the federal Fair Labor Standards Act. Employers covered by the FLSA must comply with federal minimum wage requirements. Most employers with employees engaged in interstate commerce or with annual gross sales exceeding $500,000 are covered by federal law.

Higher Rate Principle

The principle of “higher prevailing rate” requires employers to pay the highest applicable minimum wage—whether federal or state. In Indiana, because the state adopts the federal minimum wage rate, most covered employers must comply with the $7.25 per hour federal standard. No local jurisdictions in Indiana may establish minimum wage rates exceeding the state or federal rate.

Current Minimum Wage Rates in Indiana 2026

Standard Hourly Minimum Wage

As of 2026, the standard minimum wage in Indiana is $7.25 per hour, which adopts the federal minimum wage established under the Fair Labor Standards Act. This rate applies to covered employees under both federal and state law. The federal minimum wage of $7.25 per hour has remained unchanged since July 24, 2009.

Indiana does not have a state-specific minimum wage rate that differs from the federal rate. Under Indiana Code § 22-2-2-4(c), as documented in the Indiana Department of Labor’s minimum wage materials, employers with at least two employees in a workweek must pay wages of not less than the minimum wage payable under the federal Fair Labor Standards Act. Employers covered by the FLSA are subject to federal requirements rather than Indiana’s state minimum wage law.

Tipped Employee Cash Wage

Indiana permits employers to pay tipped employees a reduced cash wage of $2.13 per hour, provided that employee tips combined with the cash wage equal at least the full minimum wage of $7.25 per hour. The maximum tip credit allowed is $5.12 per hour, calculated as the difference between the full minimum wage ($7.25) and the tipped cash wage ($2.13).

Under Indiana Code § 22-2-2-4(d), employers claiming a tip credit must ensure that the cash wage paid plus tips received equals at least the federal minimum wage. If an employee’s tips fail to bring total compensation to $7.25 per hour, the employer must pay the difference. The Indiana Department of Labor’s wage and hour FAQs provide additional guidance on tipped employee requirements.

Youth Minimum Wage

Indiana follows federal law permitting employers to pay employees under 20 years of age a youth minimum wage of $4.25 per hour during the first 90 consecutive calendar days after initial employment. After 90 days, or when the employee turns 20 (whichever comes first), employers must pay at least the full minimum wage of $7.25 per hour.

This youth wage provision applies only to employees in their first 90 calendar days with a particular employer. Employers cannot displace other workers to hire employees at the youth minimum wage. The youth minimum wage provisions are established under federal law at 29 U.S.C. § 206(g) and are referenced in Indiana’s minimum wage materials.

Scheduled Minimum Wage Increases

No minimum wage increases are currently scheduled in Indiana. The state minimum wage will remain at $7.25 per hour unless the federal minimum wage changes or the Indiana legislature enacts new minimum wage legislation. Indiana’s minimum wage adjusts automatically if Congress increases the federal minimum wage.

Several bills have been introduced in the Indiana General Assembly to increase the state minimum wage, but none have been enacted into law. Without legislative action at the state or federal level, Indiana’s minimum wage will continue at $7.25 per hour.

Minimum Wage for Tipped Employees

Tipped Employee Cash Wage

Indiana permits employers to pay tipped employees a reduced cash wage, provided that employee tips combined with the cash wage equal at least the full minimum wage of $7.25 per hour.

Cash wage requirement: $2.13 per hour
Maximum tip credit: $5.12 per hour
Total minimum compensation: $7.25 per hour (cash wage + tips)

Who Qualifies as a Tipped Employee

Under Indiana law, which follows federal standards, a “tipped employee” is defined as an employee who customarily and regularly receives more than $30 per month in tips. Qualifying occupations typically include:

  • Restaurant servers and bartenders
  • Hotel and casino service workers
  • Parking attendants and valets
  • Delivery drivers who receive tips
  • Hairdressers and barbers
  • Golf caddies
  • Other service occupations where customers customarily tip

Employer Obligations for Tipped Workers

Employers who claim a tip credit must:

  1. Inform employees in writing of the tip credit provisions before claiming the credit, including notification that tips are the property of the employee
  2. Ensure total compensation (cash wage plus tips) equals or exceeds the full minimum wage of $7.25 for all hours worked
  3. Pay the difference if an employee’s tips fail to bring total compensation to the minimum wage
  4. Maintain accurate records of employee tips and hours worked, including all tips reported by employees
  5. Allow employees to retain all tips received, except for valid tip pooling arrangements

Under Indiana Code § 22-2-2-4(d), employers are responsible for supporting the amount of tip credit taken through reported tips by the employees. If tips do not bring the employee’s hourly compensation to $7.25, the employer must make up the difference. The Indiana Department of Labor’s wage and hour FAQs explain that tipped employees must be paid at least the minimum wage, with the employer paying a base wage of $2.13 per hour.

Tip Pooling and Sharing

Federal regulations, which Indiana follows, permit mandatory tip pooling arrangements among employees who customarily and regularly receive tips. Valid tip pools may include servers, bartenders, bussers, hosts, and other customarily tipped employees.

Who may participate in tip pools:

  • Servers and wait staff
  • Bartenders
  • Bussers and food runners
  • Hosts and hostesses
  • Other employees in the chain of service

Who cannot participate in tip pools:

  • Managers and supervisors
  • Kitchen staff (cooks, dishwashers, prep staff)
  • Janitors and maintenance workers
  • Administrative employees

Employers who pay the full minimum wage (not claiming a tip credit) have more flexibility under federal regulations effective March 2021 regarding tip pooling arrangements. However, managers and supervisors cannot keep any portion of employee tips under any circumstances.

Local Minimum Wage Ordinances in Indiana

Indiana law prohibits cities and counties from enacting their own minimum wage rates that differ from the state minimum wage. All employers in Indiana must comply with the uniform statewide rate of $7.25 per hour, which adopts the federal minimum wage.

Under Indiana Code § 22-2-2-10.5, added by the Indiana General Assembly in 2011 (P.L. 211-2011), a unit of local government (city, town, or county) may not establish, mandate, or otherwise require a minimum wage that differs from the state or federal minimum wage. This state preemption prevents municipalities from establishing higher rates or imposing additional wage requirements beyond state law.

The preemption statute provides a limited exception: local governments retain authority to establish wage rates in contracts to which they are a party. This means municipalities can set wage requirements for their own employees and contractors performing work for the government, but cannot mandate minimum wages for private employers generally within their jurisdiction.

No cities or counties in Indiana have enacted local minimum wage ordinances since the preemption law took effect in 2011. The $7.25 per hour minimum wage applies uniformly across all jurisdictions in Indiana.

Who Is Covered and Who Is Exempt

Employees Covered by Indiana Minimum Wage

Indiana minimum wage law covers employers employing at least two employees during a workweek who are not covered by the federal Fair Labor Standards Act. Most Indiana employers and employees are covered by federal law, which applies to:

  • Employers engaged in interstate commerce
  • Employers with annual gross sales exceeding $500,000
  • Hospitals, schools, and government agencies
  • Domestic service workers earning more than a specified threshold

For employers not covered by the FLSA, Indiana law requires payment of at least the federal minimum wage of $7.25 per hour. Covered employees include:

  • Private sector workers: Full-time and part-time employees of private businesses
  • Salaried non-exempt employees: Employees paid on a salary basis who do not qualify for overtime exemption
  • Hourly employees: Workers compensated on an hourly basis
  • Temporary and seasonal workers: Short-term employees during their employment period
  • Minor employees: Workers under age 18, subject to youth employment restrictions

Exemptions from Minimum Wage Requirements

The following categories of employees may be exempt from Indiana minimum wage requirements:

Executive, Administrative, and Professional Employees
Employees performing bona fide executive, administrative, or professional duties may be exempt if they meet both salary and duties tests. For 2026, the minimum salary threshold for exempt status under federal regulations is $844 per week ($43,888 annually). Indiana follows federal exemption standards for employers covered by the FLSA.

Outside Sales Employees
Employees whose primary duty is making sales away from the employer’s place of business and who are customarily and regularly engaged away from the employer’s business location may be exempt from minimum wage requirements.

Agricultural Workers
Agricultural employees are exempt from Indiana’s minimum wage law under Indiana Code § 22-2-2-3. This includes employees engaged in agriculture or horticulture work. However, many agricultural workers are covered by federal minimum wage law depending on the size and nature of the agricultural operation.

Youth Workers (First 90 Days)
Employees under 20 years of age may be paid $4.25 per hour during the first 90 consecutive calendar days of employment with a particular employer, as permitted under federal law and referenced in Indiana’s minimum wage materials.

Casual Babysitters
Individuals employed on a casual basis in private homes to provide babysitting or companionship services are exempt under both state and federal law.

Independent Contractors
Properly classified independent contractors are not employees and therefore not covered by minimum wage requirements. However, Indiana applies tests to determine independent contractor status, and misclassification may result in penalties and back wages. Under Indiana Code § 22-2-2-3(b), independent contractors must be engaged in an independently established trade, occupation, profession, or business and be free from control or direction both under contract and in fact.

Additional Exemptions
Other exemptions under Indiana law include:

  • Certain newspaper delivery workers
  • Motor carrier employees regulated under specific federal transportation laws
  • Certain agricultural processing employees
  • Volunteers for educational, charitable, or religious organizations

Employer Obligations and Enforcement

Employer Compliance Requirements

Employers subject to Indiana minimum wage law must:

  1. Pay the applicable minimum wage of $7.25 per hour for all hours worked
  2. Maintain accurate payroll records documenting hours worked and wages paid for at least three years
  3. Display required posters informing employees of minimum wage rates and employee rights
  4. Issue compliant wage statements each pay period showing hours worked, wages paid, and deductions
  5. Provide written notice to employees regarding their rate of pay and regular payday
  6. Pay overtime compensation at one and one-half times the regular rate for hours over 40 in a workweek (unless exempt)

Recordkeeping Requirements: Under Indiana Code § 22-2-2-8, employers must furnish each employee a statement each pay period that includes:

  • The hours worked by the employee
  • The wages paid to the employee
  • A listing of deductions made from wages

These records must be maintained for three years and made available to the Indiana Department of Labor upon request. Employers must also maintain records showing the basis for any tip credits claimed.

Enforcement of Minimum Wage Law

The Indiana Department of Labor enforces minimum wage requirements in Indiana through its Wage and Hour Division. The agency:

  • Investigates wage complaints filed by employees
  • Conducts compliance reviews and inspections
  • Issues determinations on wage disputes
  • Facilitates voluntary compliance with wage laws
  • Refers cases for legal action when appropriate

Filing a Complaint: Employees who believe they have not been paid proper minimum wage may file a complaint with the Indiana Department of Labor through:

The Indiana Department of Labor accepts wage claims between $30 and $6,000. Employees claiming more than $6,000 in unpaid wages should consult a private attorney. Employees who have been involuntarily separated from employment (laid off or fired) must file a wage claim with the Indiana Department of Labor before proceeding to civil court.

Indiana law prohibits retaliation against employees who file wage complaints or cooperate with investigations under Indiana Code § 22-2-2-11.

Penalties for Minimum Wage Violations

Employers who violate Indiana minimum wage law may be subject to:

Back Wages: Employers must pay employees the difference between wages paid and the required minimum wage for all hours worked. Under Indiana Code § 22-2-2-9, employees may recover unpaid minimum wages for up to three years before the date the complaint was filed.

Liquidated Damages: Indiana law authorizes liquidated damages equal to the amount of unpaid wages. If a court finds that the employer’s failure to pay was not in good faith, the court shall order the employer to pay an amount equal to two times the amount of unpaid wages as liquidated damages, plus the wages owed.

Attorney Fees and Court Costs: Employees who prevail in minimum wage actions may recover reasonable attorney fees and court costs. Effective July 1, 2015, Indiana law requires employers who fail to make timely payment of wages to pay the wages due, reasonable attorney fees, and court costs.

Civil Penalties: Violations of minimum wage requirements constitute an infraction under Indiana law. Employers with prior unrelated judgments for minimum wage violations commit a Class B misdemeanor.

Criminal Penalties: Under Indiana Code § 22-2-2-11, willful violations of minimum wage law may result in criminal prosecution. Employers who discharge or discriminate against employees for filing wage complaints or cooperating with investigations commit an infraction.

Interest: Unpaid wages may accrue interest from the date wages were due until payment is made, as determined by applicable court judgments.

Indiana Minimum Wage vs Federal Law

The Federal Minimum Wage Floor

The Fair Labor Standards Act (FLSA) establishes a federal minimum wage of $7.25 per hour, which has remained unchanged since July 24, 2009. This federal rate sets a floor for minimum wage requirements nationwide and applies to employers engaged in interstate commerce or with annual gross sales exceeding $500,000. Most employers and employees in Indiana are covered by the federal FLSA.

When State Law Applies

Indiana adopts the federal minimum wage rate of $7.25 per hour under state law. For employers covered by both state and federal law, the requirements are identical. Indiana’s state minimum wage law under Indiana Code § 22-2-2-4 serves primarily to extend minimum wage protection to employers and employees who may fall outside federal coverage.

Most Indiana employers are covered by the federal FLSA rather than state law. Under Indiana Code § 22-2-2-3, employers who are subject to the minimum wage provisions of the federal Fair Labor Standards Act are not covered by Indiana’s minimum wage law. This means federal standards govern for most employees, with state law providing a backstop for workers not covered by federal law.

Higher Applicable Rate Rule

The fundamental principle governing minimum wage compliance is that employers must pay whichever rate—federal or state—provides employees the highest hourly wage. In Indiana, because the state rate adopts the federal rate, both require payment of $7.25 per hour.

Practical Application:

  1. Determine whether the employer is covered by the federal Fair Labor Standards Act
  2. If covered by federal law, apply federal minimum wage ($7.25/hour)
  3. If not covered by federal law but employing at least two employees, apply Indiana minimum wage (also $7.25/hour)
  4. For tipped employees, follow federal or state tip credit rules (both $2.13 cash wage with $5.12 maximum tip credit)

Minimum Wage Posting Requirements

Indiana law requires employers to display an official minimum wage notice in a conspicuous location accessible to all employees. The poster must include current wage rates, employee rights, and contact information for the Indiana Department of Labor.

Where to obtain posters:

Posting locations: The notice must be posted in each workplace location where employees can readily see it, typically near time clocks, in break rooms, or at other prominent locations accessible to all employees. Under Indiana Code § 22-2-2-8(c), the poster must include:

  • The current minimum wage rate
  • Employee’s basic rights under Indiana’s minimum wage law
  • Contact information for the Indiana Department of Labor

Compliance: Failure to display required posters may result in citations from the Indiana Department of Labor. Employers must ensure posters remain visible and legible at all times. If minimum wage rates change at the federal level, employers must update posters accordingly.

Frequently Asked Questions: Minimum Wage in Indiana 2026

What is the minimum wage in Indiana in 2026?

The minimum wage in Indiana is $7.25 per hour as of 2026. Indiana adopts the federal minimum wage established under the Fair Labor Standards Act, which has remained at $7.25 since July 24, 2009.

When is the next minimum wage increase in Indiana?

No minimum wage increases are currently scheduled in Indiana. The rate will remain $7.25 per hour unless Congress increases the federal minimum wage or the Indiana legislature enacts new minimum wage legislation. Indiana’s minimum wage adjusts automatically if the federal rate changes.

Does Indiana allow tip credit?

Yes, Indiana permits employers to pay tipped employees a cash wage of $2.13 per hour, with up to $5.12 in tip credit, provided total compensation (cash wage plus tips) reaches $7.25 per hour. Employers must make up the difference if tips do not bring compensation to the minimum wage.

Are there different minimum wages in different cities in Indiana?

No, Indiana maintains a uniform statewide minimum wage of $7.25. Local jurisdictions are prohibited from enacting different rates under Indiana Code § 22-2-2-10.5, which preempts municipal minimum wage ordinances.

Who is exempt from minimum wage in Indiana?

Common exemptions from Indiana minimum wage include executive, administrative, and professional employees meeting salary and duties tests, outside sales employees, agricultural workers, and properly classified independent contractors. Youth workers under age 20 may be paid $4.25 per hour during their first 90 days with an employer. Most hourly workers, including part-time employees, are covered.

What happens if an employer pays below minimum wage in Indiana?

Employers who pay below minimum wage face back wage liability for up to three years, liquidated damages equal to unpaid wages (or double if not paid in good faith), reasonable attorney fees, and court costs. Violations constitute an infraction, with repeat violations classified as Class B misdemeanors. Employees can file complaints with the Indiana Department of Labor to recover unpaid wages.

Do small businesses have to pay minimum wage in Indiana?

Yes, employers with at least two employees during a workweek must pay minimum wage under Indiana law. Even very small businesses must comply with the $7.25 hourly rate. Employers covered by the federal Fair Labor Standards Act (most businesses with sales exceeding $500,000 or engaged in interstate commerce) must comply with federal minimum wage requirements.

Is Indiana’s minimum wage higher than the federal minimum?

No, Indiana’s minimum wage is identical to the federal minimum wage of $7.25. Indiana law adopts the federal rate, so employers in Indiana must pay $7.25 per hour whether covered by state or federal law.

How often does Indiana increase its minimum wage?

Indiana’s minimum wage does not automatically adjust. Changes require either new federal legislation increasing the federal minimum wage (which Indiana adopts automatically) or new state legislation enacted by the Indiana General Assembly. The federal rate has remained at $7.25 since July 24, 2009.

Can employers pay less than minimum wage during training?

Indiana does not authorize a separate training wage below the minimum wage for adult employees. However, federal law permits employers to pay employees under 20 years of age a youth minimum wage of $4.25 per hour during the first 90 consecutive calendar days of employment. After 90 days or when the employee turns 20, employers must pay at least $7.25 per hour.

How to file a minimum wage complaint in Indiana

Employees who believe they have not received proper minimum wage compensation may file a wage complaint with the Indiana Department of Labor. Filing methods include:

The Indiana Department of Labor will investigate the complaint and may recover unpaid wages on behalf of the employee. Indiana law prohibits employer retaliation against workers who file wage complaints or participate in investigations. The Department accepts wage claims between $30 and $6,000.

Do remote workers in Indiana get the Indiana minimum wage?

Generally, the minimum wage of the jurisdiction where the employee physically performs work applies. Remote workers located in Indiana are typically entitled to Indiana’s minimum wage of $7.25, even if their employer is based in another state. However, if the employer is located in a state with a higher minimum wage and the employee performs work in that state, the higher rate may apply depending on the specific circumstances and applicable state laws.

Information Verification Log

All information on this page has been compiled from official government sources and verified for accuracy as of the dates below.

Information Verification Log
Source Last Verified Full URL
Indiana Code – Title 22 (General Assembly) February 4, 2026 https://iga.in.gov/laws/2024/ic/titles/22
Indiana Department of Labor February 4, 2026 https://www.in.gov/dol/
Indiana DOL – Wage and Hour Division February 4, 2026 https://www.in.gov/dol/wage-and-hour/wage-and-hour-home/
Indiana Minimum Wage Law (PDF) February 4, 2026 https://www.in.gov/dol/files/Minimum-Wage-Law.pdf
Indiana DOL – Minimum Wage Explanation (PDF) February 4, 2026 https://www.in.gov/dol/files/Explanation_of_Minimum_Wage.pdf
Indiana Minimum Wage Poster February 4, 2026 https://www.in.gov/dol/files/Minimum-Wage-Law.pdf
Indiana DOL – Online Wage Claim Form February 4, 2026 https://www.in.gov/dol/wage-and-hour/online-wage-claim-form/
Indiana DOL – Wage and Hour FAQs February 4, 2026 https://www.in.gov/dol/wage-and-hour/wage-and-hour-faqs/
Fair Labor Standards Act (FLSA) February 4, 2026 https://www.dol.gov/agencies/whd/flsa
U.S. Department of Labor – Minimum Wage by State February 4, 2026 https://www.dol.gov/agencies/whd/minimum-wage/state

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Legal Disclaimer: Nature of This Compilation This document is a compilation of publicly available information from official government sources. It is NOT: Legal advice An interpretation of laws or regulations A substitute for consultation with a licensed attorney A comprehensive treatment of all applicable laws Guaranteed to be complete or current