South Bend / Mishawaka, IN – As we near the end of 2015, Indiana employers should be mindful of certain changes to Indiana law which could affect their workplaces and how they manage their employees. These changes went into law on July 1, 2015, and could have implications on employer policies and handbook provisions.
To begin, Indiana’s wage deduction law received an overhaul with the addition of other deductions employers may now lawfully take out of employees’ pay. This amendment now allows employers to make deductions for the purchasing of uniforms and equipment necessary for the job (up to certain monetary caps); and also for reimbursement of employee education or employee skills training costs, unless furnished by a governmental economic development incentive program (whether in whole or in part). In addition, while employers previously were allowed to deduct for the costs of merchandise sold to employees, now the law allows deductions specifically for the cost of food, provided the merchandise of food is for the employee’s benefit or use. Lastly, the wage deduction law now limits the interest an employer may charge for amounts loaned or advanced to an employee which are repaid by wage assignments at four (4) percent above the prime rate.
The wage deduction law remains the same in other respects, so employers should still look to this law to determine whether or not their wage deductions are allowed under Indiana law.
Indiana’s wage payment and wage claim statutes were also amended. Before the amendment, these statutes provided for strict financial penalties against employers if earned wages were not timely and fully paid to employees. The penalties are still there for noncompliance, but now in order for an employee to recover liquidated damages associated with the nonpayment of earned wages, the employee must show that the employer’s failure to appropriately and timely pay wages was not in good faith. Employers should continue to take precautionary measures to ensure the timely payment of all accrued and earned wages to employees, but with this amendment an honest mistake by the employer might no longer automatically mean harsh penalties under the law.
Lastly, Indiana enacted a new law that allows private employers the right to maintain voluntary veterans preference policies. In short, the new law permits companies to give preferential treatment to veterans in hiring, promoting, or retention decisions over other qualified employees or applicants.
A “covered” veteran under the new law is a person who has served and was released under conditions other than dishonorable from active duty in the U.S. Armed Forces or Reserves, the Indiana Air National Guard, or the Indiana Army National Guard. In giving such preferential treatment, an employer may require the covered veteran to submit a United States Department of Defense Report of Separation to prove the required veteran status.
Employers should understand that if such a preferential policy is adopted, the policy must be in writing and applied uniformly with respect to all employment decisions. Employers should also be mindful of pre-existing obligations which might exist under collective bargaining agreements, the Uniformed Services Employment and Reemployment Rights Act, the National Labor Relations Act, or other applicable law which might impact such a preferential policy toward veterans.
These changes are here to stay, so – if not already – Indiana employers should be aware of these new laws as the calendar flips to 2016. Employers with questions regarding these amendments and new laws should always consult with experienced legal counsel.
The content of this article is for information purposes only, and neither contains nor should be considered legal advice.
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