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Indiana is an employment-at-will state, which means that an individual’s employment may be terminated by either party for good cause, bad cause, or no cause at all. Unless an individual has a collective bargaining agreement or a written employment agreement for a specified length of time, the individual is employed “at-will.” However, federal law and Indiana law recognize certain exceptions to employment at will.

Discrimination, Harassment, and Retaliation: It is unlawful for an employer to discriminate, harass, or retaliate against an individual on the basis of a protected characteristic. For instance, Title VII of the Civil Rights Act of 1964 (Title VII) prohibits discrimination against an individual because of that individual’s race, color, religion, sex (including pregnancy), or national origin. The Age Discrimination in Employment Act (ADEA) prohibits discrimination against an individual because of his or her age (40 years or older). The Americans with Disabilities Act (ADA) prohibits discrimination against an individual on the basis of a disability. The Genetic Nondiscrimination Act of 2008 (GINA) prohibits discrimination against an individual because of an individual’s genetic information.

These laws forbid discrimination with respect to any aspect of employment, including, hiring, firing, pay, job assignments, promotions, layoffs, training, fringe benefits, and any other term or condition of employment. These laws also make it illegal to harass an individual on the basis of race, color, religion, sex (including pregnancy), national origin, age, disability or genetic information and make it illegal to retaliate against an individual because he or she filed a charge of discrimination, complained to the employer about discrimination or harassment, or participated in an employment discrimination proceeding.

The Family and Medical Leave Act: The Family and Medical Leave Act (FMLA) entitles eligible employees to take up to 12 weeks of unpaid, job-protected leave in a 12-month period for specified family and medical reasons. Recent amendments to the FMLA expanded the FMLA to allow eligible employees to take up to 12 weeks of job-protected leave in the applicable 12-month period for any “qualifying exigency” arising out of the fact that a covered military member is on active duty, or has been notified of an impending call or order to active duty, in support of a contingency operation. The amendments to the FMLA also allow eligible employees to take up to 26 weeks of job-protected leave in a single 12-month period to care for a covered service member with a serious injury or illness.

It is unlawful for an employer to interfere with, restrain, or deny the exercise of any right provided by the FMLA. It is also unlawful for an employer to discharge or discriminate against an individual for opposing any practice made unlawful by the FMLA, or because of involvement in any proceeding related to the FMLA.

The Fair Labor Standards Act (FLSA) and Indiana Wage Law: The FLSA is a federal law that sets basic minimum wage and overtime pay standards. Individuals who are covered by the FLSA are entitled to a minimum wage of not less than $7.25 per hour effective July 24, 2009. Overtime pay at a rate of not less than 1½ times an individual’s rate of pay is required after 40 hours of work in a workweek. Certain exemptions apply to specific types of businesses or specific types of work. The FLSA does not require severance pay, sick pay, vacation or holiday pay.

Most Indiana employers and employees are covered by the minimum wage and overtime provision of the FLSA. However, those not covered under federal law may still be covered by the Indiana Minimum Wage Law. Both the FLSA and the Indiana Minimum Wage Law generally require employers to pay employees 1½ times their regular rate of pay when employees work more than 40 hours during a workweek. However, there are many exceptions to overtime pay requirements under both federal and Indiana law.

Whistleblower Protection: There are numerous federal statutes that protect individuals who blow the whistle on employers or who engage in protected activity. Some of the statutes include the False Claims Act, Occupational Safety and Health Act, the Surface Transportation Assistance Act, the Asbestos Hazard Emergency Response Act, the International Safe Container Act, the Energy Reorganization Act, the Clean Air Act, Safe Drinking Water Act, Federal Water Pollution Control Act, Toxic Substances Control Act, Solid Waste Disposal Act, Comprehensive Environmental Response, Compensation, and Liability Act, the Wendell H. Ford Aviation Investment and Reform Act for the 21st Century, the Corporate and Criminal Fraud Accountability Act, Title VIII of the Sarbanes-Oxley Act, the Pipeline Safety Improvement Act (PSIA), the Federal Rail Safety Act, the National Transit Systems Security Act, and the Consumer Product Safety Improvement Act.

Other Exceptions to At-Will Employment: Indiana law has also created certain exceptions to at-will employment. For example, under the public policy exception, an individual is wrongfully discharged when the termination is against a public policy of the state. For instance, it is unlawful in Indiana for an employer to terminate an individual for filing a worker’s compensation claim or for refusing to break a law at the employer’s request.


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