The Timing of Wage Payments (3rd of 3 parts)

Posted in Employment and Labor at 10:57 am by Michael Dalrymple

The Timing of Wage Payments (3rd of 3 parts)

Indiana employers can get themselves into trouble by not paying their employees in a timely manner.  The penalties for not paying wages on time can include lost wages, punitive damages, costs and attorney’s fees.  This article briefly describes the requirements concerning when wages must be paid. 

Employers must pay wages to employees on their regular payday for each workweek. When a pay period covers more than a single week, employers must pay all wages on the regular payday for the workweek in which the pay period ends. In almost all cases, Indiana employers must pay their employees at least semimonthly or bi-weekly, but only if the employee requests the arrangement. Employers may not schedule paydays more than 10 days after the end of the regularly scheduled pay period. Payments must be made in lawful money of the United States, by negotiable check, draft, or money order, or by electronic transfer to the financial institution designated by the employee. 

If an employee is discharged or voluntarily leaves employment, the employer does not need to pay the employee the amount due the employee until the next usual and regular day for payment of wages, as established by the employer. This is also the case if work is suspended as a result of an industrial dispute.

Failure to pay employees their wages in a timely manner, whether during employment or thereafter, can expose the employer to a lawsuit for lost wages, punitive damages, costs and attorney’s fees.  Employers must pay a penalty of 10 percent of the amount due per day until the penalty reaches double the amount of damages. Combining the damages for actual lost wages with the mandatory punitive damages, the statutory requirement can result in an award of triple damages to the former employee. In addition, the former employee may recover costs and reasonable attorney’s fees.

If an employee voluntarily leaves their employment, they must provide their address or location to the employer.  If they fail to do so, the employer is not subject to penalties until:  ten days have elapsed after the employee has made a demand for the wages due; or the employee has furnished the employer with the employee’s address where the wages may be forwarded. 

For more information about this or other legal topics, please e-mail Michael Dalrymple.


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