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Forums For Adjudicating Employment Disputes

Employment disputes are generally adjudicated in state and federal courts, or through administrative agencies such as the Worker’s Compensation Board and the Department of Workforce Development which hear employees’ petition for unemployment compensation, the Equal Employment Opportunity Commission and the Indiana Civil Rights Commission, both of which adjudicate employment discrimination claims. Contractual disputes are litigated in civil courts. Labor disputes involving a collective bargaining agreement are typically handled through arbitration proceedings.


The Main Sources Of Employment Law

The main sources of labor employment law are federal and state legislation and regulations, and court decisions. Federal legislation includes Section 1981 of the Civil Rights Act of 1866, 42 U.S.C. § 1981, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq., the Fair Labor Standards Act, including the Equal Pay Act, 29 U.S.C. § 201, et seq., the Americans with Disabilities Act, 42 U.S.C. § 12101, et seq., the Family and Medical Leave Act of 1993, 29 U.S.C. §§ 2601, et seq., the Indiana Civil Rights Law, I.C. § 22-9-1, et seq., Indiana’s wage-related statutes, including I.C. §§ 22-2-2 through 22-2-19, Indiana’s Worker’s Compensation Statute, under I.C. §§ 22-3-1 through 22-3-12, the Employee Retirement Income Security Act of 1974 (“ERISA”), 29 U.S.C. § 1001, et seq., the Rehabilitation Act of 1973, 29 U.S.C. § 706, et seq., COBRA, 29 U.S.C. § 1161, et seq., and the National Labor Relations Act, 29 U.S.C. § 151, et seq. Collective bargaining agreements and individual contracts are also enforceable.


National Law And Employees Working For Foreign Companies

U.S. employment discrimination laws, such as Title VII, apply to jobs located inside the U.S. when the employer is a foreign entity who is not exempted by a treaty or a binding international agreement and the employee is authorized to work in the U.S. See e.g., EEOC Commission Decision No. 84-2, CCH Employment Practices Guide 6840 (foreign company recruiting in United States was “employer” subject to Title VII for charge relating to recruitment).


National Law And Employees Of National Companies Working In Another Jurisdiction

All federal employment laws apply to U.S. citizens working in every state. The Indiana Civil Rights Act applies only to Indiana employers that employ six or more employees working within the state of Indiana I.C. § 22-9-1-3 (2010). It does not apply to employers that are religious institutions or organizations, non-profit organizations, or an organization organized exclusively for fraternal purposes. Id. Counties and municipalities also have non-discrimination in employment laws.


Data privacy

Employers must implement and maintain reasonable procedures to protect personal information on state residents, including applicants and employees, against unlawful use or disclosure. Personal information means a Social Security Number that is not encrypted or redacted; or an individual’s first and last names, or first initial and last name, and one or more of the following data elements that are not encrypted or redacted: a driver’s license number; a state identification card number; a credit card number; or a financial account or debit card number in combination with a security code, password, or access code that would permit access to a person’s account.

Employers must notify state residents, including employees and applicants, about security breaches of personal information that is or could be acquired by unauthorized people if employers know or should know that the residents are or could be affected by these breaches. I.C. § 24-4.9-1 et. seq.

Legal Requirements As To The Form Of Agreement

There is no legal requirement for a contract to be in writing. Unless the parties agree otherwise, Indiana employees are employed at will, meaning that either the employee or employer may terminate the relationship at any time and for any reason or no reason, and are not subject to a contract of employment. However, there are federal and state laws governing certain terms and conditions of employment. Further, the Indiana Supreme Court has recognized a public policy exception to the employment at will doctrine if a clear statutory expression of a right or duty is contravened, e.g. the worker’s compensation retaliation exception and the whistleblower exception. See, Frampton v. Cent. Ind. Co., 297 N.E.2d 425 (Ind. 1973) (holding that employers may not retaliate against employees who make workers’ compensation claims); Tony v. Elkhart County, 851 N.E.2d 1032 (Ind. Ct. App. 2006) (establishing a constructive retaliatory discharge claims).


Mandatory Requirements
  • Trial Period
  • There is no legal obligation to provide trial periods, also called “probationary periods,” when engaging new employees, but it is common practice to do so. However, Indiana has new-hire reporting requirements, which require employers to report to the Indiana Department of Workforce Development within 20 business days of the employee’s date of hire the name, address, and social security number of each new hire and the name, address, and state and federal identification number of the employer. Employers filing electronically must report twice a month not less than 12 or more than 16 days apart. I.C.§ 22-4-10-08. An employer who consistently discharges persons within four (4) weeks of their employment and replaces the discharged person without work stoppage commits a Class A infraction. I.C. § 22-2-2-12.

  • Hours Of Work
  • State and federal law provide that non-exempt employees must be paid 1.5 times their regular rate of pay for all hours worked in excess of 40 hours in a work week.

  • Special Rules For Part-time Work
  • There are no special rules for part-time work.

  • Earnings
  • As of January 1, 2014, Indiana state and federal minimum wage is $7.25 per hour I.C. § 22-2-2-4. However, this provision does not apply to persons under the age of sixteen. This provision is only applicable to employers of 2 or more employees.

  • Holidays/Rest Periods
  • There are no mandatory holidays for private employers in Indiana. No general provision requires meal or rest periods in Indiana, except that employees under the age of 18 must be provided 1 or 2 rest breaks totalling at least 30 minutes if the employee is scheduled to work at least 6 consecutive hours. Also, the state and its political subdivisions must provide reasonable paid break time each day to an employee who needs to express breast milk unless it would unduly disrupt operations of the state.

  • Minimum/Maximum Age
  • In Indiana, a minor must be at least 14 years of age before beginning work. The only jobs available to someone under the age of 14 are actor, performer, model, golf caddy, newspaper carrier, domestic service worker (babysitter) and farm laborer. I.C. § 22-2-18-14.

    Indiana law has special provisions for minors who are at least 14 years of age but younger than 18. These minors must obtain an employment certificate from their school in order to secure employment. During employment, there are additional restrictions for the time and number of hours they may work, which are based on the age of the minor. An employer who employs a minor must post a conspicuous notice stating both the maximum hours a child may be employed for or permitted to work each day of the week and also the hours of beginning and ending for each day. Indiana law authorizes a child between the ages of 16 to 17 to work until 11 p.m. on a night followed by a school day if the employer has obtained written permission from the child’s parent. I.C. § 20-33-3-28.Indiana’s Age Discrimination Act declares it an unfair labor practice to refuse to hire or rehire anyone solely because of age if that person is between the ages of 40 and 75. I.C. § 22-9-2-1.

  • Illness/Disability
  • Indiana’s Civil Rights Act prohibits employment discrimination based solely upon an individual’s disability I.C. § 22-9-5-1 - 22-9-5-27. The federal Americans with Disabilities Act and the 2008 Amendments Act prohibit discrimination based on an individual’s disability. The federal Family and Medical Leave Act requires covered employers to provide eligible employees with up to 12 weeks of unpaid job-protected leave to care for their own serious health condition or to care for a spouse, child, or parent with a serious health condition.

  • Location Of Work/Mobility
  • There are no mandatory requirements relating to an employee’s location of work / mobility.

  • Pension Plans
  • Pension plans are not mandatory, but certain plans are regulated by the Employee Retirement Income Security Act (ERISA).

  • Parental Rights (Pregnancy/ Maternity/ Paternity/ Adoption)
  • The federal Pregnancy Discrimination Act of 1978 prohibits discrimination or harassment of a woman because of pregnancy, childbirth, or a medical condition related to pregnancy or childbirth. In 2014, the Equal Employment Opportunity Commission released guidance clarifying the Pregnancy Discrimination Act and emphasizing that employers must treat women affected by pregnancy or related medical conditions the same way they treat non-pregnant applicants or employees who are similar in their ability or inability to work. The federal Family and Medical Leave Act requires covered employers to provide eligible employees with up to 12 weeks of unpaid job-protected leave because of the birth of a child and to care for the new-born child or because of the placement of a child with the employee for adoption or foster care. Indiana law provides that a teacher is entitled to a pregnancy leave of no more than one year. I.C. § 20-28-10-5.

  • Compulsory Terms
  • There are no compulsory terms.

  • Non-Compulsory Terms
  • The parties are free to agree on other non-compulsory provisions, provided that these terms are no less favorable than certain statutory rights.


Types Of Agreement

There are not different rules for different types of agreements. Indiana courts will enforce both oral and written employment agreements.


Secrecy/Confidentiality

In Indiana, an employee who is entrusted with or who obtains trade secrets may make a valid covenant that prohibits him from competitive use or disclosure of those trade secrets. Non-compete covenants are in restraint of trade, are not favored by the law, and are strictly construed against the employer. Non-compete covenants are enforceable if the employer has a protectable interest. The covenant must be reasonable in the length of the restraint, the geographic scope of the restraint, the activity restrained, and must be reasonable regarding the protectable interest. See Clark’s Sales and Service, Inc. v. Smith and Ferguson Enterprises, Inc., 4 N.E.3d 772 (Ind. Ct. App. 2014) (declining to blue-pencil the overbroad provisions of the agreement and instead finding the entire agreement was unenforceable).


Ownership of Inventions/Other Intellectual Property (IP) Rights

Generally, employers own intellectual property created by their employees as part of their employment or created using the employer’s information, equipment, or materials.


Pre-Employment Considerations

In Indiana it is unlawful to discriminate against a person whose record has been sealed or expunged. Further, in any application for employment, a license, or other right or privilege, a person may be questioned about a previous criminal record only in terms that exclude expunged convictions or arrests, such as: “Have you ever been arrested for or convicted of a crime that has not been expunged by a court?” I.C. § 35-38-9-10. Employers can request state criminal background checks through the Indiana State Police Department.

It is unlawful to discriminate against applicants for employment on the basis of race, religion, color, sex, disability, national origin, ancestry, age (over 40), or status as a veteran. Employers must not ask questions on job applications that might reveal protected characteristics. Employers should also train hiring managers and supervisors to avoid asking questions in interviews that might reveal an individual’s protected class. Such as “When did you graduate high school?” or “Tell me about your community involvement – Are you involved with any charitable organizations or churches?”


Hiring Non-Nationals

Employers should be aware that foreign nationals must be authorized to work in the U.S. and whether such employment is restricted in any way. U.S. laws, rules, and regulations governing the work authorization of foreign nationals are complex. The U.S. Citizenship and Immigration Services (USCIS) regulations provide guidelines for employers and employees to adhere to in order for a foreign national to work in the U.S. The USCIS establishes various categories of permanent employment visas for aliens who seek to immigrate based on their job skills. There are approximately 140,000 permanent employment visas for aliens who seek to be permanent workers. The USCIS further provides that in order for an alien to come to the United States lawfully as a non-immigrant to work temporarily in the United States, his or her prospective employer must generally file a non-immigrant petition on his or her behalf with USCIS.

See www.uscis.gov.


Hiring Specified Categories Of Individuals

Federal contractors have certain affirmative action obligations under Executive Order 11246. One requirement for federal contractors who have 50 or more employees and $50,000 or more in government contracts is to develop a written affirmative action program which helps the contractor identify and analyze potential problems in the participation and utilization of women and minorities in the contractors’ workforce. Federal and state law prohibit employers from discriminating in terms and conditions of employment based on: race, religion, sex, national origin, color, age (40 and over), disability, or ancestry. Indiana law sets limits on hiring employees under age eighteen, including requiring nearly all minors ages 14-17 to obtain a work permit.

It is an unlawful employment practice in Indiana for an employer to discriminate against a prospective employee on the basis of status as a veteran of either the armed forces of the United States or the Indiana national guard or a member of a reserve component. I.C. § 22-9-10.


Outsourcing And/Or Sub-Contracting/Temporary Agency Work

There are no employment rules relating to outsourcing and / or sub-contracting.

Changes To The Contract

An employer may establish business hours, working schedules and other employment terms. An employee may place conditions on these terms. Common law contract principles apply to contract changes made by either party. Thus, an employer may not change any terms of the employee’s contract without the employee’s consent. Such consent may be express (by the employee agreeing to the change) or implied (by the employee continuing to work for the employer without protest for an appropriate period after being made aware of the change). Any change of terms to which the employee does not consent will amount to a breach of contract.


Change In Ownership Of The Business

There are no special rules which apply when there is a change in the ownership of the business regarding employees. Generally, when there is a change in ownership of a business, all employees are automatically transferred to the new employer on the same terms and conditions. As Indiana is an at-will employment state, an employee may refuse to transfer to the new employer by resigning his or her position. However, a non-compete agreement may not be transferable to a new employer unless transferability or assignability is provided for in the agreement.

However, businesses must notify the Indiana Department of Workforce Development whenever there is a complete or partial transfer of an organization, trade, or business for purposes of unemployment insurance premiums.


Social Security Contributions

Both employees and employers must make social security contributions. Employers are not required to contribute toward allowances payable to employees during their employment.


Accidents At Work

The federal Occupational Safety and Health Act (OSHA) governs when work accidents may be reported. The Indiana equivalent statute for workplace safety is the Indiana Occupational Safety and Health Act. I.C. § 22-8-1.1 et. seq. The handling of work-related injuries is governed by the Indiana Worker’s Compensation Act, which, in most cases, prevents employees from suing employers directly for work-related accidents. The Indiana Worker’s Compensation Board handles workers’ compensation issues. Indiana employers, with certain exceptions, are required to insure their workers’ compensation liability by either purchasing workers’ compensation insurance through a company authorized by the state or, for employers seeking to self-insure, by furnishing the Workers’ Compensation Board with an application and satisfactory proof of financial ability to pay compensation as provided in the workers’ compensation statute.


Discipline And Grievance

There are no laws mandating a discipline or grievance process for private sector employees who are not part of a collective bargaining unit. The discipline or grievance process for private sector employees who are a part of a collective bargaining unit is governed by the terms of the collective bargaining agreement.


Harassment/Discrimination/Equal pay

Along with federal laws, the Indiana Civil Rights Act prohibits employers from discriminating, directly or indirectly, in terms and conditions of employment based on: race, religion, national origin, color, sex, disability, or ancestry. The Indiana Age Discrimination statute also protects individuals ages 40-75 years old from employment discrimination based solely upon age. Indiana law also prohibits an employer from terminating an employee because he or she has provided evidence in connection with a complaint under the Indiana Civil Rights Act.

Protected classifications under the Indiana Civil Rights Law include: race, religion, color, sex, disability, national origin, and ancestry (See Ind. Code § 22-9-1-1, et seq). It is also an unlawful employment practice for an employer to discriminate against a prospective employee on the basis of status as a veteran. I.C. § 22-9-10-9. A separate statute provides that persons with disabilities are to be employed in public positions on the same terms and conditions as the able-bodied, unless it is shown that the particular disability prevents the performance of the work involved (See Ind. Code § 16-32-3-5). There is no specific cap on damages, however, damages are generally limited to back wages.

Employers cannot pay employees of one sex at wage rates that are lower than the wage rates paid to employees of the opposite sex for equal work that requires equal skill, effort, and responsibility under similar working conditions in the same workplace. Employers that violate the equal pay law cannot reduce any employee's wage rate to comply with the law. However, employers can pay different wage rates pursuant to seniority, merit, or piece-rate systems or any factor other than sex.


Compulsory Training Obligations

There are no compulsory training obligations, but some trades/professions will impose their own standards and expectations.


Offsetting Earnings

Employers may deduct wages (make “assignments”) for thirteen enumerated purposes provided the employee gives written authorization and the authorization is revocable. The limited purposes include: (1) payments for insurance premiums, (2) contributions or pledges to a charitable or non-profit organization, (3) purchase price of U.S. bonds and securities, (4) purchase price of shares of stock in the employing company, (5) dues to a labor organization, (6) purchase price of merchandise sold by the employer to the employee, (7) amount of a loan made to the employee by the employer, (8) contributions to a hospital service or a surgical or medical expense plan or to a plan existing for the purpose of paying a judgment owed by the employee, (9) payment to any credit union, non-profit organizations, or associations of employees of such employer organized under U.S. law, (10) payment to any person or organization for electronic deposit or credit of funds, (11) premiums or policies of insurance and annuities purchased by the employee on the employee’s life, (12) purchase price of shares or fractional interest in shares in at least one mutual fund, (13) a judgment owed by the employee (so long as pursuant to agreement between employee and creditor and not a garnishment), (14) purchase, rental, or use of uniforms or other job-related clothing at an amount not to exceed the direct cost paid by the employer to an external vendor for the items, (15) purchase of equipment or tools necessary to fulfil the duties of employment at an amount not to exceed the direct cost paid by an employer to an external vendor for those items, (16) reimbursement for education or employee skills training, (17) an advance for payroll or vacation pay, and (18) the employee's drug education and addiction treatment services under IC 12-23-23. I.C. § 22-2-6-2.

Employers may also deduct for reimbursement of an overpayment to an employee as long as the employer gives the employee two weeks’ notice before amounts are deducted from the employee’s paycheck. An employer may not deduct an amount in dispute and is restricted from deducting any amount greater than 25% of the employee’s disposable earnings or the amount by which the employee’s disposable earnings exceed 30 times the minimum wage (whichever is less). However, if a wage overpayment is equal to 10 times the employee’s gross wages because of a misplaced decimal point, the entire overpayment may be deducted immediately. Other restrictions apply to deducting employees’ wages. I.C. § 22-2-6-4.


Payments For Maternity And Disability Leave

Indiana generally does not have requirements for maternity leave, although teachers have a special provision, found at I.C. § 20-28-10-5. Further, outside the context of worker’s compensation and paid disability leave provided to workplace injuries, Indiana does not provide paid disability leave.


Compulsory Insurance

Health Insurance is not required by Indiana law; however, individuals may be subject to the Patient Protection and Affordable Care Act.


Absence For Military Or Public Service Duties

The federal Uniformed Services Employment and Reemployment Act governs military leave and reinstatement following such leave. Indiana’s Military Family Leave Act permits the spouse, parent, grandparent, child or sibling of a person who is ordered to active duty to take an unpaid leave of absence upon written notice for 10 days during a one-year period. Military family leave is also provided for under the federal Family and Medical Leave Act. I.C. § 22-2-13-1, et seq.

Members of U.S. armed forces reserves may take up to 15 days unpaid (or paid at employer’s discretion) leave per year for training. Leave does not affect vacation, sick leave, bonus, or promotion rights. Employee must be reinstated to former or a similar position with no loss of seniority or benefits. I.C. § 10-17-4-1 et. seq.


Works Councils or Trade Unions

The National Labor Relations Act governs employees’ right to organize. Indiana makes it a Class B criminal misdemeanor for a person to prevent another person from forming or belonging to a labor organization. Indiana law also provides that no Indiana worker or group of workers who are Indiana residents can be denied the right to select his or her bargaining representative or be denied the right to organize into a local union or association. See Zoeller v. Sweeney, 19 N.E.3d 749 (Ind. 2014); (holding that Indiana’s Right to Work law, on its face, does not violate Indiana’s Constitution.)


Employees’ Right To Strike

Employees have the right to strike, see discussion of Collective Bargaining Rights in U.S. Federal Law section.


Employees On Strike

For a discussion of whether an employer may fire employees who are on strike, see Collective Bargaining Rights in U.S. Federal Law section.


Employers’ Responsibility For Actions Of Their Employees

Employers are responsible for the actions of their employees unless the employee is acting outside the scope of his or her employment.

Note that the following questions assume the existence of an employment contract. In the U.S., most employees are not subject to a contract, but are instead employed at-will. However, to the extent that an employee has a contract with the employer, the agreement would be covered by contract law. The termination of employees who are part of a collective bargaining unit is typically covered by the collective bargaining agreement.


Procedures For Terminating the Agreement

A covered employer who engages in a “mass layoff” or “plant closing” must follow the procedures in the federal Worker Adjustment and Retraining Notification Act (WARN Act). 29 U.S.C. § 2101 et. seq. These procedures generally require advance notice of the layoff. Absent an employment agreement, Indiana is an at-will employment state and does not require an employer to have cause to terminate an employee. However, Indiana requires that when an employee makes a written request, an employer must provide the employee a signed, written letter setting forth whether the employee quit or was involuntarily discharged. I.C. § 22-6-3-1. Indiana does not have mandatory notice provisions for the termination of employment.


Instant Dismissal

Employers and employees may terminate their at-will employment relationship at any time and for any reason, but not a discriminatory reason or for a reason that breaches public policy. Public policy exceptions are limited to worker’s compensation retaliation, illegal conduct relating to public contracts, and where the employee is fired for refusing to commit an illegal act that the employee would be personally liable for the violation. If there is an employment contract, contract law applies.


Employee's Resignation

An employee may terminate an employment agreement by resigning. Normally, the contract will stipulate the notice period required and an employee may be liable for breaching the employment contract if proper notice is not given. Employees can also forfeit accrued vacation for not adhering to the employer’s notice requirements.


Termination On Notice

Parties may terminate an employment agreement with or without notice. However, under general contract law principles, a party may be liable for breach of the employment agreement if the party terminates the agreement without the requisite notice provided for in the employment contract.


Termination By Reason Of The Employee's Age

An employment agreement may not be terminated due to the employee’s age, except in very limited cases where mandatory retirement is required by law.


Automatic Termination In Cases Of Force Majeure

An employment agreement may be terminated due to force majeure. Generally, impossibility of performance is a defense in an action for damages. Legal impossibility of performing a contractual obligation is an affirmative defense that the invoking party has the burden to establish.


Collective Dismissals

A covered employer who engages in a “mass layoff” or “plant closing” must follow the procedures in the federal Worker Adjustment and Retraining Notification Act (WARN Act). 29 U.S.C. § 2101 et. seq. These procedures generally require advance notice of the layoff.


Termination By Parties’ Agreement

In a contract for a definite term, employment ends according to the terms of the employment agreement. Either party may be liable for breach of contract for violating the terms of the contract. However, under common law principles of contract, the parties may mutually agree to modify the term of the contract and terminate the agreement at an earlier date.


Directors Or Other Senior Officers

There are no special rules for firing directors or special officers.


Special Rules For Categories Of Employee

The Collective Bargaining Agreement controls termination of employees who are part of the collective bargaining unit. In Indiana, a minor must be at least 14 years of age before beginning work. The only jobs available to someone under the age of 14 are actor, performer, model, golf caddy, newspaper carrier, domestic service worker (babysitter) and farm laborer. Indiana law has special provisions for minors who are at least 14 years of age but younger than 18. These minors must obtain an employment certificate from their school in order to secure employment. During employment, there are additional restrictions for the time and number of hours they may work, which are based on the age of the minor. An employer who employs a minor must post a conspicuous notice stating both the maximum hours a child may be employed for or permitted to work each day of the week and also the hours of beginning and ending for each day.


Whistleblower Laws

Several Indiana statutes provide for a whistle blowing cause of action. See e.g., I.C. § 22-5-3-3 (employees of private companies under private contract may not be discharged or disciplined for reporting violations of law or misuse of public resources); Indiana Employees’ Bill of Rights, I.C. § 4-15-10-4 (prohibits state-government employers from discharging or disciplining employees for reporting violations of law or misuse of public resource);. I.C. § 22-8-1.1-38.1 (prohibits employers from discharging or otherwise discriminating against employees in violation of the Indiana Occupational Safety and Health Act); I.C. § 22-9-1-6 (employees may not be discharged for filing a complaint, assisting in an investigation, or testifying in a hearing before the Indiana Civil Rights Commission); I.C. § 22-9-2-8 (employees may not be discharged for furnishing evidence in connection with an age discrimination complaint); and I.C. § 22-2-2-11 (Employees may not be discharged or discriminated against in retaliation for instituting an action to recover wages or demanding payment of wages under Indiana laws concerning minimum wages and equal pay provisions).


Specific Rules For Companies in Financial Difficulties

Specific rules apply when a company gets into financial difficulties. See e.g., the provisions of the WARN Act, 29 U.S.C. § 2101 et. seq. The WARN Act protects workers by requiring advance notice of covered plant closings and covered mass layoffs.


Special Rules For Garden Leave

Indiana does not have any special rules for garden leave. Indiana courts have not yet considered garden leave provisions. However, it is likely Indiana courts would examine the enforceability of garden leave provisions based on whether the restrictions are reasonable and necessary to protect the legitimate business interests of the employer.


Restricting Future Activities

Non-compete covenants are a restraint of trade, are not favored by the law, and are strictly construed against the employer. Non-competes are enforceable if the employer has a protectable interest. The covenant must be reasonable in the length of the restraint, the geographic scope of the restraint, the activity restrained, and must be reasonable regarding the protectable interest. Under the “blue pencil” doctrine, Indiana courts will only strike unreasonable language. They will not modify the covenant to make it enforceable. Heraeus Med., LLC v. Zimmer, Inc., 135 N.E.3d 150 (Ind. 2019).

However, an Indiana Appellate Court has declined to blue-pencil overly broad language, and instead of striking the unreasonable language, the court found the entire agreement was unenforceable. Clark’s Sales and Service, Inc. v. Smith and Ferguson Enterprises, Inc., 4 N.E.3d 772 (Ind. Ct. App. 2014).


Severance Payments

There are no state or federal laws requiring severance payments. Indiana requires payment of all accrued wages by the next regularly scheduled pay date after termination of employment.

Indiana’s Wage Claims Act provides that whenever any employer separates any employee from the payroll, the unpaid wages or compensation of such employee must be paid at the regular pay day for the pay period in which the separation occurred. I.C. § 22-2-9-2 Indiana’s Wage Payments Act provides that payment of all wages earned must be made no more than 10 business days after the wages are earned. I.C. § 22-2-5-1. Damages available to employees for an employer’s failure to make timely wage payments include attorneys’ fees and treble damages. I.C. § 22-2-5-2.


Special Tax Provisions And Severance Payments

There are no special tax provisions which apply to severance payments.


Allowances Payable To Employees After Termination

Employers are not required to contribute towards any allowances payable to employees after termination.


Time Limits For Claims Following Termination

State: Employees must file a charge alleging discrimination with the Indiana Civil Rights Commission within 180 days from the date of the occurrence of the alleged unlawful discriminatory act. Federal: Employees must file a charge alleging discrimination with the Equal Employment Opportunity Commission (“EEOC”) within 180 days after the discrimination took place. The 180-calendar day filing deadline is extended to 300 days if a state or local agency enforces a state or local law that prohibits discrimination on the same basis.

However, a claim for age discrimination must be filed within 180 days, unless a state has a corresponding law prohibiting age discrimination, in which case the 180 days is expanded to 300 days. The employee’s right to sue in federal court is contingent upon filing a charge of discrimination with the EEOC. Suits in federal court alleging violation of Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act and/or the Age Discrimination in Employment Act must be filed within 90 days of receipt of the EEOC’s Dismissal and Notice of Rights. Suits for unpaid wages or alleging violation of the federal Equal Pay Act (“EPA”) must be filed in federal or state court within 2 years (3 years for willful violations) of the alleged EPA underpayment.

Specific Matters Which Are Important Or Unique To This Jurisdiction

While the Indiana Civil Rights Act does not recognize sexual orientation or gender identity as protected classes for employment discrimination purposes, some Indiana counties and municipalities recognize such claims. Most municipalities and counties, however, only recognize claims of employment discrimination based upon sexual orientation. Also, see the information on at-will employment in the U.S. Federal law section.

It is also unlawful for an employer in Indiana to require as a condition of employment that an employee or prospective employee refrain from using tobacco off-duty, or to discriminate with respect to compensation, benefits, or any terms or conditions of employment, based on the use of tobacco products outside the course of the employee or prospective employee’s employment, I.C. § 22-5-4-1.



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© 2021, Frost Brown Todd LLC. All rights reserved by Frost Brown Todd LLC as author and the owner of the copyright in this chapter. Frost Brown Todd LLC has granted to Multilaw non-exclusive worldwide license to use and include this chapter in this guide and to sublicense Lexis Nexis, a division of RELX Inc. and its affiliates certain rights to use and distribute this Guide.

The information in the How to Hire and Fire Guide provides a general overview at the time of publication and is not intended to be a comprehensive review of all legal developments nor should it be taken as opinion or legal advice on the matters covered. It is for general information purposes only and readers should take legal advice from a Multilaw member firm.

Publication Date: June 2021