Indiana Employment Law: An Overview of the Wage Payment Statute and Wage Claims Statute

One topic in Indiana labor law that has generated some interesting debates recently involves the Codified Wage Payment Statute under Ind. 22-2-5 and the Statute of Wage Claims under codified Ind. 22-2-9. Both statutes govern the options available to an employee who believes his employer has not paid wages owed. However, it is important to know the differences between the two statutes.

First, the Wage Payment Statute regulates the time within which employers must pay wages to their employees. If an employee assigns a wage payment claim to the Department of Labor (“DOL”) and DOL accepts that assignment, the employee may not bring a claim under the Wage Payment Statute unless DOL upholds, supersedes or join the employee’s lawsuit. .

Second, the Wage Claims Statute deals with disputes over the amount of compensation. Claims under the Wage Claims Statute must be filed with the DOL. After filing an application with DOL, a waiver or referral must be requested from DOL or the Attorney General’s Office (“AGO”) so that the employee’s attorney can proceed with the claim.

Submitting a request to the DOL is relatively easy. Typically, the employee’s attorney will handle the process and file the application using the forms provided by the DOL. Otherwise, an online wage claim application can be filed through the DOL website.

It is important to discuss with an attorney or with the DOL, if the employee does not have an attorney, the various requirements associated with filing an application. For example, DOL will refuse to process the application if the employee’s basis is minimum wage, overtime, vacation pay, or sick pay. Also, the DOL will not process the application if the employer who filed for bankruptcy is not located in the state of Indiana. Also, if you performed the work as an independent contractor, DOL will not process the application. The DOL will only process applications if the claim is between $30.00 and $6,000. In all other situations, the employee should hire an attorney.

The Indiana Supreme Court recently addressed the Wage Claim Statute and the Wage Payment Statute in the case Walczak v. Labor Works-Fort Wayne LLC, 983 NE2d 1146 (Ind. 2013). This decision clarified which claims must be filed under the Wage Payment Statute, as opposed to the Wage Claims Statute.

Tea Walczak The case revolved around the meaning of “separated from payroll” as that term is used in the Wage Claims Act. The supreme court found that the matter was truly jurisdictional; if the worker was involuntarily separated from the payroll, the trial court did not have jurisdiction over her claim, but if she voluntarily left her employment, the trial court did have jurisdiction.

The supreme court concluded that when an employee who did not leave his job on his own terms filed a wage claim, it made sense to submit his claim to administrative review before he could proceed directly to court. A day laborer employee was not separated from the payroll for purposes of the Wage Claims Act unless that employee had no immediate expectation of possible future employment with the same employer. The worker had such an immediate expectation. He continued to work for the agency sporadically for the next four weeks. The worker was not separated from the payroll and does not need to meet the requirements of the Wage Claims Act.

Tea Walczak case expanded on the law and held that “[w]When an employee who did not leave their job on their own terms files a wage claim, it makes sense to submit their claim for administrative review before they can proceed directly to court.” An employee is not separated from the payroll for the purpose of Wage Claims Act unless the employee has no immediate expectation of possible future employment with the same employer.