Citations Affected: IC 6-4.1; IC 22-2; noncode.
Synopsis: Economic matters. Increases the inheritance tax exemption
for Class A transferees from $100,000 to $200,000. Increases Indiana's
minimum hourly wage to $6 on September 1, 2007, $6.75 on March 1,
2008, and $7.50 on September 1, 2008. Increases from $800 to $6,000
the amount of the maximum wage claim for which the commissioner
of the department of labor may take an assignment. Removes the
exemption from Indiana's minimum wage law for employers that are
subject to the minimum wage provisions of the federal Fair Labor
Standards Act.
Effective: July 1, 2007.
January 8, 2007, read first time and referred to Committee on Labor and Employment.
January 23, 2007, amended, reported _ Do Pass. Recommitted to Committee on Ways &
Means.
January 25, 2007, minority report failed. Yeas 48, nays 51.
January 25, 2007, amended, reported _ Do Pass.
January 29, 2007, read second time, amended, ordered engrossed.
A BILL FOR AN ACT to amend the Indiana Code concerning
economic matters.
of the federal Fair Labor Standards Act of 1938, as amended (29 U.S.C.
201-209).
"Employee" means any person employed or permitted to work or
perform any service for remuneration or under any contract of hire,
written or oral, express or implied by an employer in any occupation,
but shall not include any of the following:
(a) Persons less than sixteen (16) years of age.
(b) Persons engaged in an independently established trade,
occupation, profession, or business who, in performing the
services in question, are free from control or direction both under
a contract of service and in fact.
(c) Persons performing services not in the course of the
employing unit's trade or business.
(d) Persons employed on a commission basis.
(e) Persons employed by their own parent, spouse, or child.
(f) Members of any religious order performing any service for that
order, any ordained, commissioned, or licensed minister, priest,
rabbi, sexton, or Christian Science reader, and volunteers
performing services for any religious or charitable organization.
(g) Persons performing services as student nurses in the employ
of a hospital or nurses training school while enrolled and
regularly attending classes in a nurses training school chartered
or approved under law, or students performing services in the
employ of persons licensed as both funeral directors and
embalmers as a part of their requirements for apprenticeship to
secure an embalmer's license or a funeral director's license from
the state, or during their attendance at any schools required by law
for securing an embalmer's or funeral director's license.
(h) Persons who have completed a four (4) year course in a
medical school approved by law when employed as interns or
resident physicians by any accredited hospital.
(i) Students performing services for any school, college, or
university in which they are enrolled and are regularly attending
classes.
(j) Persons with physical or mental disabilities performing
services for nonprofit organizations organized primarily for the
purpose of providing employment for persons with disabilities or
for assisting in their therapy and rehabilitation.
(k) Persons employed as insurance producers, insurance
solicitors, and outside salesmen, if all their services are performed
for remuneration solely by commission.
(l) Persons performing services for any camping, recreational, or
guidance facilities operated by a charitable, religious, or
educational nonprofit organization.
(m) Persons engaged in agricultural labor. The term shall include
only services performed:
(1) on a farm, in connection with cultivating the soil, or in
connection with raising or harvesting any agricultural or
horticultural commodity, including the raising, shearing,
feeding, caring for, training, and management of livestock,
bees, poultry, and furbearing animals and wildlife;
(2) in the employ of the owner or tenant or other operator of a
farm, in connection with the operation, management,
conservation, improvement, or maintenance of the farm and its
tools and equipment if the major part of the service is
performed on a farm;
(3) in connection with:
(A) the production or harvesting of maple sugar or maple
syrup or any commodity defined as an agricultural
commodity in the Agricultural Marketing Act, as amended
(12 U.S.C. 1141j);
(B) the raising or harvesting of mushrooms;
(C) the hatching of poultry; or
(D) the operation or maintenance of ditches, canals,
reservoirs, or waterways used exclusively for supplying and
storing water for farming purposes; and
(4) in handling, planting, drying, packing, packaging,
processing, freezing, grading, storing, or delivering to storage,
to market, or to a carrier for transportation to market, any
agricultural or horticultural commodity, but only if service is
performed as an incident to ordinary farming operation or, in
the case of fruits and vegetables, as an incident to the
preparation of fruits and vegetables for market. However, this
exception shall not apply to services performed in connection
with any agricultural or horticultural commodity after its
delivery to a terminal market or processor for preparation or
distribution for consumption.
As used in this subdivision, "farm" includes stock, dairy, poultry,
fruit, furbearing animals, and truck farms, nurseries, orchards, or
greenhouses or other similar structures used primarily for the
raising of agricultural or horticultural commodities.
(n) Those persons employed in executive, administrative, or
professional occupations who have the authority to employ or
discharge and who earn one hundred fifty dollars ($150) or more
a week, and outside salesmen.
(o) Any person not employed for more than four (4) weeks in any
four (4) consecutive three (3) month periods.
(p) Any employee with respect to whom the Interstate Commerce
Commission has power to establish qualifications and maximum
hours of service under the federal Motor Carrier Act of 1935 (49
U.S.C. 304(3)) or any employee of a carrier subject to IC 8-2.1.
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), (h), (i), and (j).
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 the employer 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), (l), 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, and before September 1, 2007, wages of not less than five
dollars and fifteen cents ($5.15) an hour.
(h) Except as provided in subsections (c) and (l), 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
September 1, 2007, and before March 1, 2008, wages of not less
than six dollars ($6) an hour.
(i) Except as provided in subsections (c) and (l), 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, 2008, and before September 1, 2008, wages of not less
than six dollars and seventy-five cents ($6.75) an hour.
(j) Except as provided in subsections (c) and (l), 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
September 1, 2008, wages of not less than seven dollars and fifty
cents ($7.50) an hour.
(h) (k) 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) (l) 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), (h), (i), and (j), 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:
(1) four dollars and twenty-five cents ($4.25) per hour, effective
March 1, 1999;
(2) four dollars and ninety-five cents ($4.95) per hour,
effective September 1, 2007;
(3) five dollars and fifty-seven cents ($5.57) per hour, effective
March 1, 2008; and
(4) six dollars and twenty cents ($6.20) per hour, effective
September 1, 2008.
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) (m) Except as otherwise provided in this section, no employer
shall employ any employee for a work week 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 the employee is
employed.
(k) (n) For purposes of this section the following apply:
(1) "Overtime compensation" means the compensation required
by subsection (j). (m).
(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 work week 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 the
employer's interests and properly reimbursable by the
employer, and other similar payments to an employee which
are not made as compensation for his the employee's 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 work
week because those hours are hours worked in excess of eight
(8) in a day or in excess of the maximum work week
applicable to the employee under subsection (j) (m) 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 work
week, 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 (8) hours) or work week (not exceeding the
maximum work week applicable to the employee under
subsection (j)) (m)) 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 work week.
(l) (o) No employer shall be considered to have violated subsection
(j) (m) by employing any employee for a work week in excess of that
specified in subsection (j) (m) 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
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 work week
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) (r) Extra compensation paid as described in this section shall be
creditable toward overtime compensation payable pursuant to this
section.
(p) (s) No employer shall be considered to have violated subsection
(j) (m) by employing any employee of a retail or service establishment
for a work week in excess of the applicable work week 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) (t) 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) (m) 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 work
week of seven (7) consecutive days for purposes of overtime
computation and if, for his the employee's 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) (u) No employer shall employ any employee in domestic service
in one (1) or more households for a work week longer than forty (40)
hours unless the employee receives compensation for that employment
in accordance with subsection (j). (m).
(s) (v) In the case of an employee of an employer engaged in the
business of operating a street, a suburban or interurban electric railway,
or a 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) (m) 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) (w) Any employer may employ any employee for a period or
periods of not more than ten (10) hours in the aggregate in any work
week in excess of the maximum work week specified in subsection (j)
(m) without paying the compensation for overtime employment
prescribed in subsection (j), (m), 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) (x) Subsection (j) (m) does not apply to an employee of a motion
picture theater.
(v) (y) Subsection (j) (m) 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).