Rates; discrimination
Sec. 4. (a) Every employer employing four (4) or more employees
during a work week shall:
(1) in any work week beginning on or after July 1, 1968, in
which he is subject to the provisions of this chapter, pay each
of his employees wages of not less than one dollar and
twenty-five cents ($1.25) per hour;
(2) in any work week beginning on or after July 1, 1977, in
which he is subject to this chapter, pay each of his employees
wages of not less than one dollar and fifty cents ($1.50) per
hour;
(3) in any work week beginning on or after January 1, 1978, in
which he is subject to this chapter, pay each of his employees
wages of not less than one dollar and seventy-five cents ($1.75)
per hour; and
(4) in any work week beginning on or after January 1, 1979, in
which he is subject to this chapter, pay each of his employees
wages of not less than two dollars ($2) per hour.
(b) Except as provided in subsection (c), every employer
employing at least two (2) employees during a work week shall, in
any work week in which the employer is subject to this chapter, pay
each of the employees in any work week beginning on and after July
1, 1990, and before October 1, 1998, wages of not less than three
dollars and thirty-five cents ($3.35) per hour.
(c) An employer subject to subsection (b) is permitted to apply a
"tip credit" in determining the amount of cash wage paid to tipped
employees. In determining the wage an employer is required to pay
a tipped employee, the amount paid the employee by the employee's
employer shall be an amount equal to:
(1) the cash wage paid the employee which for purposes of the
determination shall be not less than the cash wage required to
be paid to employees covered under the federal Fair Labor
Standards Act of 1938, as amended (29 U.S.C. 203(m)(1)) on
August 20, 1996, which amount is two dollars and thirteen cents
($2.13) an hour; and
(2) an additional amount on account of the tips received by the
employee, which amount is equal to the difference between the
wage specified in subdivision (1) and the wage in effect under
subsections (b), (f), and (g).
An employer is responsible for supporting the amount of tip credit
taken through reported tips by the employees.
(d) No employer having employees subject to any provisions of
this section shall discriminate, within any establishment in which
employees are employed, between employees on the basis of sex by
paying to employees in such establishment a rate less than the rate at
which he pays wages to employees of the opposite sex in such
establishment for equal work on jobs the performance of which
requires equal skill, effort, and responsibility, and which are
performed under similar working conditions, except where such
payment is made pursuant to:
(1) a seniority system;
(2) a merit system;
(3) a system which measures earnings by quantity or quality of
production; or
(4) a differential based on any other factor other than sex.
(e) An employer who is paying a wage rate differential in
violation of subsection (d) shall not, in order to comply with
subsection (d), reduce the wage rate of any employee, and no labor
organization, or its agents, representing employees of an employer
having employees subject to subsection (d) shall cause or attempt to
cause such an employer to discriminate against an employee in
violation of subsection (d).
(f) Except as provided in subsection (c), every employer
employing at least two (2) employees during a work week shall, in
any work week in which the employer is subject to this chapter, pay
each of the employees in any work week beginning on or after
October 1, 1998, and before March 1, 1999, wages of not less than
four dollars and twenty-five cents ($4.25) per hour.
(g) Except as provided in subsections (c) and (i), every employer
employing at least two (2) employees during a work week shall, in
any work week in which the employer is subject to this chapter, pay
each of the employees in any work week beginning on or after March
1, 1999, wages of not less than five dollars and fifteen cents ($5.15)
an hour.
(h) This section does not apply if an employee:
(1) provides companionship services to the aged and infirm (as
defined in 29 CFR 552.6); and
(2) is employed by an employer or agency other than the family
or household using the companionship services, as provided in
29 CFR 552.109 (a).
(i) This subsection applies only to an employee who has not
attained the age of twenty (20) years. Instead of the rates prescribed
by subsections (c), (f), and (g), an employer may pay an employee of
the employer, during the first ninety (90) consecutive calendar days
after the employee is initially employed by the employer, a wage
which is not less than four dollars and twenty-five cents ($4.25) per
hour, effective March 1, 1999. However, no employer may take any
action to displace employees (including partial displacements such
as reduction in hours, wages, or employment benefits) for purposes
of hiring individuals at the wage authorized in this subsection.
(j) Except as otherwise provided in this section, no employer shall
employ any employee for a workweek longer than forty (40) hours
unless the employee receives compensation for employment in
excess of the hours above specified at a rate not less than one and
one-half (1.5) times the regular rate at which he is employed.
(k) For purposes of this section the following apply:
(1) "Overtime compensation" means the compensation required
by subsection (j).
(2) "Compensatory time" and "compensatory time off" mean
hours during which an employee is not working, which are not
counted as hours worked during the applicable workweek or
other work period for purposes of overtime compensation, and
for which the employee is compensated at the employee's
regular rate.
(3) "Regular rate" means the rate at which an employee is
employed is considered to include all remuneration for
employment paid to, or on behalf of, the employee, but is not
considered to include the following:
(A) Sums paid as gifts, payments in the nature of gifts made
at Christmas time or on other special occasions, as a reward
for service, the amounts of which are not measured by or
dependent on hours worked, production, or efficiency.
(B) Payments made for occasional periods when no work is
performed due to vacation, holiday, illness, failure of the
employer to provide sufficient work, or other similar cause,
reasonable payments for traveling expenses, or other
expenses, incurred by an employee in the furtherance of his
employer's interests and properly reimbursable by the
employer, and other similar payments to an employee which
are not made as compensation for his hours of employment.
(C) Sums paid in recognition of services performed during
a given period if:
(i) both the fact that payment is to be made and the amount
of the payment are determined at the sole discretion of the
employer at or near the end of the period and not pursuant
to any prior contract, agreement, or promise causing the
employee to expect the payments regularly;
(ii) the payments are made pursuant to a bona fide profit
sharing plan or trust or bona fide thrift or savings plan,
meeting the requirements of the administrator set forth in
appropriately issued regulations, having due regard among
other relevant factors, to the extent to which the amounts
paid to the employee are determined without regard to
hours of work, production, or efficiency; or
(iii) the payments are talent fees paid to performers,
including announcers, on radio and television programs.
(D) Contributions irrevocably made by an employer to a
trustee or third person pursuant to a bona fide plan for
providing old age, retirement, life, accident, or health
insurance or similar benefits for employees.
(E) Extra compensation provided by a premium rate paid for
certain hours worked by the employee in any day or
workweek because those hours are hours worked in excess
of eight (8) in a day or in excess of the maximum workweek
applicable to the employee under subsection (j) or in excess
of the employee's normal working hours or regular working
hours, as the case may be.
(F) Extra compensation provided by a premium rate paid for
work by the employee on Saturdays, Sundays, holidays, or
regular days of rest, or on the sixth or seventh day of the
workweek, where the premium rate is not less than one and
one-half (1.5) times the rate established in good faith for like
work performed in nonovertime hours on other days.
(G) Extra compensation provided by a premium rate paid to
the employee, in pursuance of an applicable employment
contract or collective bargaining agreement, for work outside
of the hours established in good faith by the contract or
agreement as the basic, normal, or regular workday (not
exceeding eight hours) or workweek (not exceeding the
maximum workweek applicable to the employee under
subsection (j)) where the premium rate is not less than one
and one-half (1.5) times the rate established in good faith by
the contract or agreement for like work performed during the
workday or workweek.
(l) No employer shall be considered to have violated subsection
(j) by employing any employee for a workweek in excess of that
specified in subsection (j) without paying the compensation for
overtime employment prescribed therein if the employee is so
employed:
(1) in pursuance of an agreement, made as a result of collective
bargaining by representatives of employees certified as bona
fide by the National Labor Relations Board, which provides that
no employee shall be employed more than one thousand forty
(1,040) hours during any period of twenty-six (26) consecutive
weeks; or
(2) in pursuance of an agreement, made as a result of collective
bargaining by representatives of employees certified as bona
fide by the National Labor Relations Board, which provides that
during a specified period of fifty-two (52) consecutive weeks
the employee shall be employed not more than two thousand
two hundred forty (2,240) hours and shall be guaranteed not
less than one thousand eight hundred forty (1,840) hours (or not
less than forty-six (46) weeks at the normal number of hours
worked per week, but not less than thirty (30) hours per week)
and not more than two thousand eighty (2,080) hours of
employment for which the employee shall receive compensation
for all hours guaranteed or worked at rates not less than those
applicable under the agreement to the work performed and for
all hours in excess of the guaranty which are also in excess of
the maximum workweek applicable to the employee under
subsection (j) or two thousand eighty (2,080) in that period at
rates not less than one and one-half (1.5) times the regular rate
at which the employee is employed.
(m) No employer shall be considered to have violated subsection
(j) by employing any employee for a workweek in excess of the
maximum workweek applicable to the employee under subsection (j)
if the employee is employed pursuant to a bona fide individual
contract, or pursuant to an agreement made as a result of collective
bargaining by representatives of employees, if the duties of the
employee necessitate irregular hours of work, and the contract or
agreement includes the following:
(1) Specifies a regular rate of pay of not less than the minimum
hourly rate provided in subsections (c), (f), (g), and (i)
(whichever is applicable) and compensation at not less than one
and one-half (1.5) times that rate for all hours worked in excess
of the maximum workweek.
(2) Provides a weekly guaranty of pay for not more than sixty
hours based on the rates so specified.
(n) No employer shall be considered to have violated subsection
(j) by employing any employee for a workweek in excess of the
maximum workweek applicable to the employee under that
subsection if, pursuant to an agreement or understanding arrived at
between the employer and the employee before performance of the
work, the amount paid to the employee for the number of hours
worked by him in the workweek in excess of the maximum
workweek applicable to the employee under that subsection:
(1) in the case of an employee employed at piece rates, is
computed at piece rates not less than one and one-half (1.5)
times the bona fide piece rates; applicable to the same work
when performed during nonovertime hours;
(2) in the case of an employee performing two (2) or more kinds
of work for which different hourly or piece rates have been
established, is computed at rates not less than one and one-half
(1.5) times those bona fide rates; applicable to the same work
when performed during nonovertime hours; or
(3) is computed at a rate not less than one and one-half (1.5)
times the rate established by the agreement or understanding as
the basic rate to be used in computing overtime compensation
thereunder, provided that the rate so established shall be
substantially equivalent to the average hourly earnings of the
employee, exclusive of overtime premiums, in the particular
work over a representative period of time;
and if the employee's average hourly earnings for the workweek
exclusive of payments described in this section are not less than the
minimum hourly rate required by applicable law, and extra overtime
compensation is properly computed and paid on other forms of
additional pay required to be included in computing the regular rate.
(o) Extra compensation paid as described in this section shall be
creditable toward overtime compensation payable pursuant to this
section.
(p) No employer shall be considered to have violated subsection
(j) by employing any employee of a retail or service establishment
for a workweek in excess of the applicable workweek specified
therein, if:
(1) the regular rate of pay of the employee is in excess of one
and one-half (1.5) times the minimum hourly rate applicable to
the employee under section 2 of this chapter; and
(2) more than half of the employee's compensation for a
representative period (not less than one (1) month) represents
commissions on goods or services.
In determining the proportion of compensation representing
commissions, all earnings resulting from the application of a bona
fide commission rate shall be considered commissions on goods or
services without regard to whether the computed commissions
exceed the draw or guarantee.
(q) No employer engaged in the operation of a hospital or an
establishment which is an institution primarily engaged in the care
of the sick, the aged, or the mentally ill or defective who reside on
the premises shall be considered to have violated subsection (j) if,
pursuant to an agreement or understanding arrived at between the
employer and the employee before performance of the work, a work
period of fourteen (14) consecutive days is accepted in lieu of the
workweek of seven (7) consecutive days for purposes of overtime
computation and if, for his employment in excess of eight (8) hours
in any workday and in excess of eighty (80) hours in that fourteen
(14) day period, the employee receives compensation at a rate not
less than one and one-half (1.5) times the regular rate at which the
employee is employed.
(r) No employer shall employ any employee in domestic service
in one (1) or more households for a workweek longer than forty (40)
hours unless the employee receives compensation for that
employment in accordance with subsection (j).
(s) In the case of an employee of an employer engaged in the
business of operating a street, suburban or interurban electric
railway, or local trolley or motorbus carrier (regardless of whether or
not the railway or carrier is public or private or operated for profit or
not for profit), in determining the hours of employment of such an
employee to which the rate prescribed by subsection (j) applies there
shall be excluded the hours the employee was employed in charter
activities by the employer if both of the following apply:
(1) The employee's employment in the charter activities was
pursuant to an agreement or understanding with the employer
arrived at before engaging in that employment.
(2) If employment in the charter activities is not part of the
employee's regular employment.
(t) Any employer may employ any employee for a period or
periods of not more than ten (10) hours in the aggregate in any
workweek in excess of the maximum workweek specified in
subsection (j) without paying the compensation for overtime
employment prescribed in subsection (j), if during that period or
periods the employee is receiving remedial education that:
(1) is provided to employees who lack a high school diploma or
educational attainment at the eighth grade level;
(2) is designed to provide reading and other basic skills at an
eighth grade level or below; and
(3) does not include job specific training.
(u) Subsection (j) does not apply to an employee of a motion
picture theater.
(v) Subsection (j) does not apply to an employee of a seasonal
amusement or recreational establishment, an organized camp, or a
religious or nonprofit educational conference center that is exempt
under the federal Fair Labor Standards Act of 1938, as amended (29
U.S.C. 213).
(Formerly: Acts 1965, c.134, s.4; Acts 1967, c.153, s.2.) As amended
by Acts 1977, P.L.259, SEC.2; P.L.19-1986, SEC.38; P.L.133-1990,
SEC.2; P.L.39-1998, SEC.1; P.L.1-1999, SEC.53; P.L.234-1999,
SEC.6.
Last modified: May 27, 2006