Key Takeaways
• Indiana’s 2025 minimum wage is $7.25 per hour, unchanged since 2009.
• Indianapolis sets a higher minimum wage of $13.00, rising to $13.75 in July 2024.
• Tipped employees may earn $2.13 plus tips, with employers ensuring total pay meets $7.25.
Indiana’s Minimum Wage in 2025: What Immigrants, Workers, and Employers Need to Know
The minimum wage is a key topic for anyone working or planning to work in Indiana, especially for immigrants and newcomers who may not be familiar with local labor laws. As of 2025, the minimum wage in Indiana remains at $7.25 per hour, matching the federal minimum wage. This rate has not changed since 2009, making Indiana one of many states that have not updated their wage laws in over a decade. However, there are important exceptions, especially for tipped employees, young workers, and those working in Indianapolis. Understanding these details is essential for workers, employers, and families who rely on minimum wage jobs.
Let’s break down what this means, who it affects, and what the future may hold for Indiana’s wage laws.
Who Is Affected by Indiana’s Minimum Wage in 2025?
Most employees in Indiana who work for businesses with two or more workers are covered by the state’s minimum wage law. This includes many immigrants, students, part-time workers, and people starting their first jobs. The law sets the lowest amount an employer can pay per hour, but there are special rules for certain groups:
- Tipped employees (like restaurant servers)
- Young workers under 20 years old
- Students working part-time or in work-study programs
- Workers with disabilities
- Employees in Indianapolis, where a higher local minimum wage applies
The General Minimum Wage: $7.25 Per Hour
For most workers in Indiana, the minimum wage is $7.25 per hour. This is the same as the federal minimum wage, which has not increased since 2009. Employers with two or more employees must pay at least this amount, unless a special rule applies.
Why Hasn’t Indiana Raised Its Minimum Wage?
Indiana’s minimum wage has not changed since it was last raised by $0.70 in 2009. Since then, the cost of living has gone up, but the wage has stayed the same. Some states have chosen to increase their minimum wage above the federal level, but Indiana has not. There are no county or city-level minimum wage differences in Indiana, except for Indianapolis.
Special Rules for Tipped Employees
Tipped employees are workers who regularly receive tips from customers, such as waiters, bartenders, and hotel staff. In Indiana, the rules for tipped employees are different:
- Cash wage: Employers can pay tipped employees as little as $2.13 per hour.
- Tip credit: The expectation is that tips will bring the worker’s total hourly pay up to at least $7.25 per hour.
- Employer responsibility: If tips plus the cash wage do not reach $7.25 per hour, the employer must pay the difference.
This system is meant to ensure that tipped employees do not earn less than the minimum wage, but it can lead to unpredictable earnings, especially in slow seasons or less busy workplaces.
Example: How Tipped Wages Work
If a server works 10 hours in a week and earns $21.30 in cash wages (10 hours x $2.13) and $50 in tips, their total pay is $71.30. This equals $7.13 per hour, which is below the minimum wage. The employer must then pay an extra $1.20 to bring the total up to $72.50 (10 hours x $7.25).
Minimum Wage for Young Workers and Students
Indiana has special rules for young workers and students, which can affect many immigrant families with teenagers or college students.
Youth Minimum Wage
- Workers under 20 years old can be paid a special training wage of $4.25 per hour for their first 90 days on the job.
- After 90 days, they must be paid the regular minimum wage of $7.25 per hour.
Student Minimum Wage
- Full-time high school and college students who work part-time (20 hours or less per week) or are in work-study programs can be paid 85% of the minimum wage.
- This comes out to about $6.16 per hour.
These lower wages are meant to help young people and students get work experience, but they also mean that some workers earn less than the standard minimum wage.
Exemptions: Sub-Minimum Wages for Workers with Disabilities
Some employers may pay less than the minimum wage to workers with physical or mental disabilities if these disabilities affect their ability to do the job. This is allowed under both state and federal law, but employers must get special permission and follow strict rules.
Indianapolis: A Higher Minimum Wage
While most of Indiana follows the state minimum wage, Indianapolis has set its own higher minimum wage for workers within the city limits:
- As of July 1, 2023: The minimum wage in Indianapolis is $13.00 per hour.
- Annual adjustment: The wage is adjusted every year based on the Consumer Price Index, which measures inflation.
- Next increase: The minimum wage in Indianapolis will rise to $13.75 per hour in July 2024.
This local law was created to help workers in Indianapolis keep up with the higher cost of living in the city. It only applies to jobs within the city limits, so workers in other parts of Indiana still earn the lower state minimum wage.
How Indiana’s Minimum Wage Compares to the Living Wage
The living wage is the amount of money a person needs to cover basic expenses like food, housing, and transportation. In Indiana, the living wage is estimated to be $11.14 per hour statewide and $15.24 per hour in Indianapolis. This means that many workers earning the minimum wage are making less than what is needed for basic living costs.
What Does This Mean for Immigrants and Low-Income Workers?
- Many workers struggle to cover basic expenses on the minimum wage, especially outside Indianapolis.
- Immigrant families may find it hard to save money or send money home if they are earning only the minimum wage.
- Tipped employees and young workers may earn even less, depending on their job and hours.
Practical Implications for Employers
Employers in Indiana must follow the minimum wage laws or risk penalties. Here’s what employers need to know:
- Statewide: Pay at least $7.25 per hour to most employees.
- Tipped employees: Make sure total pay (cash wage plus tips) is at least $7.25 per hour.
- Youth and students: Follow special wage rules for workers under 20 and students.
- Indianapolis: Pay the higher local minimum wage if the job is within city limits.
Employers should keep accurate records of hours worked and wages paid. The Indiana Department of Labor can audit businesses and issue fines for violations.
What Happens If Employers Don’t Follow the Law?
If an employer pays less than the required minimum wage, workers can file a complaint with the Indiana Department of Labor or the U.S. Department of Labor’s Wage and Hour Division. Employers may have to pay back wages and could face fines.
For more information on how to file a complaint or check wage laws, visit the Indiana Department of Labor website.
Stakeholder Perspectives: Workers, Employers, and Lawmakers
Workers and Labor Advocates
Many workers and labor groups believe Indiana’s minimum wage is too low and does not reflect the real cost of living. They argue that raising the minimum wage would help reduce poverty and allow more families to meet their basic needs. This is especially important for immigrants, who may have fewer resources or support networks.
Employers and Business Groups
Some business owners worry that raising the minimum wage would increase their costs and could lead to fewer jobs or higher prices. Small businesses, in particular, say they may struggle to pay higher wages without cutting hours or staff.
Lawmakers and City Officials
Indiana’s state lawmakers have not passed any increases to the minimum wage since 2009, despite several proposals. However, city officials in Indianapolis have taken action by setting a higher local minimum wage to help workers in the city.
The Future of Minimum Wage in Indiana
As of mid-2025, there are no plans to raise Indiana’s statewide minimum wage. However, there are ongoing discussions and proposals in the state legislature. Indianapolis will continue to adjust its minimum wage each year based on inflation, and other cities may consider similar local laws in the future.
What Should Workers and Employers Watch For?
- Legislative changes: Any new laws or proposals to raise the minimum wage statewide.
- Local ordinances: Other cities or counties may pass their own minimum wage laws.
- Annual adjustments: Indianapolis will update its minimum wage every July.
Staying informed about these changes is important for both workers and employers.
Frequently Asked Questions
1. What is the minimum wage for tipped employees in Indiana?
Tipped employees must be paid at least $2.13 per hour in cash wages. Tips should bring their total pay up to at least $7.25 per hour. If not, the employer must pay the difference.
2. Does the minimum wage in Indiana apply to all workers?
Most workers are covered, but there are exceptions for tipped employees, young workers, students, and workers with disabilities. Some jobs, like certain farm work or family businesses, may also be exempt.
3. How does the minimum wage in Indianapolis differ from the rest of Indiana?
Indianapolis has a higher minimum wage of $13.00 per hour (rising to $13.75 in July 2024), while the rest of Indiana follows the state minimum wage of $7.25 per hour.
4. Can employers pay less than the minimum wage?
Only in specific cases, such as tipped employees, youth under 20 (for the first 90 days), students in work-study, or workers with disabilities (with special permission).
5. Where can I find official information about Indiana’s minimum wage?
The Indiana Department of Labor website provides up-to-date information on wage laws, exemptions, and how to file complaints.
Summary Table: Indiana Minimum Wage 2025
| Category | Wage Rate (2025) | Notes |
|---|---|---|
| State Minimum Wage | $7.25 per hour | Same as federal minimum wage |
| Tipped Employees | $2.13 per hour + tips | Employer must ensure total ≥ $7.25 |
| Youth/Learners (<20 yrs) | $4.25 per hour (first 90 days) | Special training wage |
| Students (work-study) | $6.16 per hour (85% of min) | For part-time students |
| Indianapolis Minimum Wage | $13.00 per hour (since 7/1/2023) | Adjusted annually; next increase July 2024 |
Action Steps for Workers and Employers
- Workers: Check your pay stubs to make sure you are being paid at least the minimum wage for your job type and location. If you think you are being underpaid, contact the Indiana Department of Labor.
- Employers: Review your payroll practices to ensure compliance with state and local wage laws. Pay special attention if you have tipped employees, young workers, or operate in Indianapolis.
- Immigrants and newcomers: Learn about your rights and responsibilities under Indiana’s wage laws. Ask questions if you are unsure about your pay or job classification.
Final Thoughts
The minimum wage in Indiana has not changed in over 15 years, leaving many workers—especially immigrants and low-income families—earning less than what is needed for basic living expenses. While Indianapolis has taken steps to raise wages locally, most of the state continues to follow the federal minimum wage of $7.25 per hour. Tipped employees, young workers, and students face even lower pay in some cases.
As reported by VisaVerge.com, the gap between the minimum wage and the living wage in Indiana remains a major concern for many families and advocates. Ongoing debates in the state legislature and local governments may lead to changes in the future, but for now, it’s important for everyone to know the current rules and how they apply.
For more details on wage laws, exemptions, and how to file a complaint, visit the Indiana Department of Labor website. Staying informed and understanding your rights is the best way to protect yourself and your family in Indiana’s changing job market.
Learn Today
Minimum Wage → The lowest hourly pay rate employers must legally pay workers under labor laws.
Tipped Employees → Workers who receive tips regularly, affecting their wage calculation with lower base pay allowed.
Tip Credit → Amount employers deduct from wages assuming tips will bring pay to minimum wage level.
Living Wage → Estimated hourly pay needed to cover basic expenses such as food, housing, and transportation.
Work-Study Programs → Student employment initiatives allowing part-time work combined with academic studies, often with special wage rules.
This Article in a Nutshell
Indiana’s minimum wage remains $7.25 in 2025, unchanged since 2009. Indianapolis offers a higher $13 wage. Special rules apply for tipped, young, and student workers, impacting immigrant families and employers statewide.
— By VisaVerge.com
