Indiana Minimum Wage 2026: Current Rate and Future Changes

Indiana ties its state minimum wage directly to the federal Fair Labor Standards Act. When the federal number moves, so does Indiana’s. When the federal number stays flat, so does ours. That has now happened for more than 16 years, the longest stretch without a federal raise in the law’s history.

If you are working at or near minimum wage in Indianapolis, Fort Wayne, Evansville, Gary, or anywhere else in the state, the rules below are the ones that govern your hourly pay, your tipped pay, and your right to file a wage claim. For deeper questions, our Indiana employment lawyers handle unpaid wage cases statewide.

What Is the Indiana Minimum Wage in 2026?

Indiana’s minimum wage in 2026 is $7.25 per hour. That figure has not changed in 16 years. Indiana Code Section 22-2-2-4 sets the state minimum at the federal level under the Fair Labor Standards Act, so it moves only when Congress changes the federal rate.

The last federal increase took effect on July 24, 2009, when the rate rose from $6.55 to $7.25 per hour. Since then, lawmakers in Washington have introduced multiple bills to raise the minimum wage to $15 or higher. None have become law. Indiana legislators have introduced state-level proposals as well, but those have not advanced either.

That makes Indiana one of the 20 or so states still anchored to the federal floor. By comparison, states like Illinois, Michigan, Ohio, and Kentucky now have higher minimum wages. Workers who cross state lines for a job can sometimes earn dollars more per hour by working in a neighboring state.

How Does Indiana’s Rate Compare to Neighbors?

Rates and tipped-wage rules across other states adjust each year. Confirm current numbers with each state’s labor agency before relying on them for any decision. For Indiana, the controlling source is the Indiana DOL Wage and Hour division.

Who Is Covered by the Indiana Minimum Wage?

Most hourly workers in Indiana are covered. Both the federal FLSA and Indiana Code apply to private employers with at least two employees and gross sales of at least $500,000 a year. Many smaller employers are still covered through the FLSA’s individual-coverage rule if they engage in interstate commerce.

Some categories of workers are exempt from minimum wage entirely. Others are subject to special wage rules. Reading the list of exemptions correctly is one of the most common areas where employers get tripped up, and where workers end up underpaid.

Which Workers Are Exempt?

FLSA exemptions usually fall into a few well-known buckets. Executive, administrative, professional, computer, and outside sales employees can be classified as exempt from both minimum wage and overtime if they meet salary and duties tests. Independent contractors are not employees under the FLSA at all.

Misclassification is a major problem in Indiana, especially in construction, delivery, and gig work. A worker labeled as a contractor or “exempt manager” may still be entitled to minimum wage if the actual job does not match the legal definition. Our review of unpaid wages in Indiana covers the misclassification problem in detail.

How Does Tipped Minimum Wage Work in Indiana?

Indiana follows the federal tipped wage rules. A tipped employee, defined as someone who regularly receives more than $30 a month in tips, can be paid a cash wage as low as $2.13 per hour. The employer then takes a “tip credit” for the difference up to $7.25 per hour. If tips do not make up the difference in a given workweek, the employer must pay the shortfall.

That math is where a lot of unpaid wage cases begin. Restaurants and bars often skip the math entirely, leaving servers and bartenders below the legal floor across multiple shifts. A careful look at pay stubs over a few weeks usually shows whether the math has been done correctly.

What Happens If Tips Are Pooled?

Tip pools are legal in Indiana as long as they include only employees who customarily and regularly receive tips, and as long as no managers or supervisors share in the pool. Federal rules updated in recent years bar managers from taking any share of tips, even when they perform service work themselves.

If your manager is taking a cut, or if back-of-house workers are pulled into the pool without notice, you may have a valid wage claim. The US DOL Wage and Hour Division investigates these complaints.

What Is the Youth Minimum Wage in Indiana?

Workers under 20 can be paid a youth minimum wage of $4.25 per hour during their first 90 consecutive calendar days of employment. After 90 days, or once the worker turns 20, the regular $7.25 floor applies. This provision is federal and applies in Indiana automatically.

The 90-day count uses calendar days, not workdays. An employer that keeps a worker on the youth wage past day 90, or that fires them on day 89 to hire another teenager at the lower rate, may violate federal law. The Wage and Hour Division takes those cases seriously.

Are Tipped, Salaried, and Commission Workers Treated Differently?

Yes. Each category has its own rules under the FLSA, and Indiana follows the federal framework.

Salaried workers can be exempt from minimum wage only if they meet the FLSA salary basis and duties tests. As of 2026, federal courts are still sorting out the 2024 Department of Labor rule that raised the salary threshold for exempt employees. Workers whose employers reduced their salary or reclassified them in response to that rule may have claims worth reviewing.

Commission-only workers are still entitled to at least $7.25 per hour averaged over a workweek if they are non-exempt. Outside sales employees who genuinely spend their time selling away from the employer’s place of business are typically exempt. The dividing line between inside and outside sales is often litigated.

Our broader look at Indiana employment laws covers these category-specific rules in more depth.

What Indiana Minimum Wage Increases Have Been Proposed?

Several state lawmakers have filed bills in recent sessions to raise Indiana’s minimum wage. Proposals have ranged from gradual increases to $10 or $12 per hour over several years, up to single-step jumps to $15. None have advanced out of committee. Tracking the live status of these bills is possible through the Indiana General Assembly website.

At the federal level, the Raise the Wage Act has been reintroduced in successive Congresses. It would phase the federal minimum to $17 by 2028 and gradually eliminate the tipped sub-minimum. Whether it becomes law depends on the makeup of Congress and the White House over the next few sessions.

Workers should not wait for a raise that may not come. If you are being paid below the current legal floor, you can act now.

What Are Indiana’s Wage Payment and Final Paycheck Rules?

Indiana law requires employers to pay non-exempt workers at least twice a month. Final paychecks must generally be paid no later than the next regular payday after separation. Improperly delayed wages can trigger statutory damages, which can include attorney fees and additional penalties under Indiana wage statutes.

Our guide to Indiana final paycheck rules walks through deadlines, penalty math, and what counts as wages. The Indiana DOL wage claim portal is the primary route for under-$6,000 wage disputes.

“The clients we see in unpaid wage cases are not always tipped workers. We see warehouse workers stripped of overtime, salaried “managers” who do hourly work, and people who never received a final check. The legal floor is $7.25, but the actual problem is usually much bigger.”

What Should You Do If You Are Paid Below Minimum Wage?

Workers who suspect they are being underpaid should take quick, focused steps. Acting fast preserves evidence and protects against retaliation.

1. Pull every pay stub from the past two to three years and add up your gross hours and wages.
2. Track your schedule with a separate log, including unpaid breaks, off-the-clock work, and tip totals.
3. Request a copy of your offer letter, handbook, and any tip pool agreement in writing.
4. Identify whether the FLSA, Indiana wage law, or both apply to your situation.
5. Talk to an Indiana employment lawyer before filing internally if you fear retaliation.

If retaliation occurs after you raise a wage issue, that is its own claim. Our guide on workplace retaliation and on retaliation after complaints explain how those cases work alongside the wage claim.

How Do You File a Wage Claim in Indiana?

Indiana workers have several paths to recover unpaid wages. The right one depends on the size of the claim, the type of employer, and the underlying violation.

State Wage Claim Through the Indiana DOL

For claims of $6,000 or less, the Indiana DOL Wage Claims office can investigate and pursue your unpaid wages. The state walks workers through filling out a claim form and contacts the employer for a response.

For larger amounts, workers usually sue in state court. Indiana law allows liquidated damages and attorney fees on certain wage claims, which can make these cases practical to litigate even when the base wage is modest.

Federal FLSA Claim

For violations of federal minimum wage or overtime rules, workers can file with the US DOL Wage and Hour Division or sue directly in federal court. The FLSA allows recovery of double the unpaid wages plus attorney fees in many cases. The statute of limitations is two years, three for willful violations.

What Damages Can You Recover in a Minimum Wage Case?

Federal FLSA cases often allow recovery of unpaid wages, an equal amount in liquidated damages, plus attorney fees and costs. Indiana wage statutes can layer on additional penalties depending on the type of claim. Our overview of Indiana payout examples covers what realistic recoveries look like, with the same approach applying to wage cases.

If a wrongful termination accompanied the wage violation, separate damages can apply. Read our guide to wrongful termination exceptions for the overlap.

How Do Minimum Wage Cases Connect to Other Workplace Claims?

Wage cases often surface alongside other employment issues. Workers who were short-paid may also have discrimination claims if the underpayment tracks race, sex, age, or another protected class. Workers fired after raising a wage issue may have wrongful termination claims layered on top.

If you reported a wage violation and your employer turned hostile, see our guides on hostile work environment and how to document harassment in Indiana.

How Do Bonuses and Year-End Pay Interact With Minimum Wage?

Nondiscretionary bonuses, commissions, and shift differentials often count toward the regular rate for overtime purposes. They do not, however, lower the minimum-wage floor. A worker still must average at least $7.25 per hour for every hour worked in a workweek, regardless of bonus timing.

Our review of end-of-year bonuses in Indiana walks through how bonus terms can become enforceable promises if your employer puts them in writing.

What If You Work in a Specialized Field?

Some industries have wage rules that overlay the standard minimum wage. Indiana teachers work under contract terms that typically pay well above the floor but still create wage disputes when districts delay or alter pay. Healthcare workers often run into unpaid overtime tied to shift differentials and on-call time, which is a closer cousin to a minimum wage issue than many realize.

Workers in unionized settings should review their collective bargaining agreement first, then check it against the FLSA floor. CBA wages are almost always higher, but the floor still applies for unpaid time at the margins.

How Does Minimum Wage Apply to Tipped Workers Who Pump Breast Milk or Take Other Protected Leave?

Federal law gives nursing employees protected break time under the PUMP Act. That time may be unpaid in some circumstances. Whether tipped workers can be required to use unpaid break time is a layered question that our PUMP Act guide walks through.

Workers using FMLA leave are entitled to job protection but not to pay for the leave itself. The minimum wage floor applies to working time, not to leave.

Statutes of Limitations on Indiana Wage Claims

Federal FLSA claims must be filed within two years, three for willful violations. Indiana wage payment statute claims have their own state limit, generally two years. Contract-based wage claims may run longer.

Our deadlines guide maps these out. If your underpayment goes back several years, only part of the period may be recoverable, so it is worth filing soon rather than waiting.

Ready to Pursue Unpaid Wages in Indiana?

Even though the Indiana minimum wage 2026 rate has not moved since 2009, the law is still on your side when an employer pays below the floor or skips required wages. Filing the right claim, in the right forum, within the right deadline, makes a meaningful difference in what you can recover.

At Amber Boyd Law, we handle wage, retaliation, discrimination, and wrongful termination cases for Indiana employees. Our office is at 8506 Evergreen Ave, Indianapolis, IN 46240, with clients across Fort Wayne, Evansville, Gary, and the surrounding metro areas.

Call (317) 960-5070 or use our contact page to schedule a confidential evaluation. Learn more about us on our about page or meet our team. Before your first meeting, look over what happens at your first consultation and key questions to ask.

Disclaimer – This article is intended for general educational purposes only and does not constitute legal advice. For guidance specific to your situation, please consult a qualified Indiana employment attorney.