Hiring out of state employees in Indiana presents employers with some challenges when it comes to matters of employment law, taxation, insurance and more. If your company is looking to hire a new employee in Indiana, you’ll need to be familiar with the relevant laws and standards to ensure you’re in full compliance.
The combination of advancing technology and the conditions presented by the COVID-19 pandemic has led to a rise in remote work. Many employees like it, employers see many of the advantages it presents and it’s hard to envision a future in which the option of remote work gets taken off the table. Additionally, many companies have discovered the benefits of hiring out-of-state employees.
SixFifty offers solutions for employers who are looking to hire in states in which they don’t already have an economic nexus. Below we’ll take a look at some of the issues employers need to take into account.
Scenario 1: Employee works from home in another state
Suppose your company is located in Colorado, and one of your longtime employees is planning a move to Indiana to be closer to family or because their partner’s job is being transferred. Remote work makes it possible for you to retain this employee—but you’ll need to register your business in Indiana and ensure your policies are in line with Indiana law, for your own protection as well as for your employee’s peace of mind.
Scenario 2: Hiring out-of-state employees in Indiana
It’s not just your current employees you need to be thinking about, either—the contemporary employment landscape also makes it possible for your business to expand its hiring pool to new states without requiring candidates to move for a new job. If you find a strong applicant who’s based in Indiana, your Colorado company needs to register as an employer in Indiana. Then you’ll have to determine how Indiana employment law differs from what you’re used to, and adjust your policies accordingly for your new employee.
Multistate Employer Registration Factors to Consider
In both of the above scenarios, employers need to pursue multistate compliance or risk being held accountable by the Department of Labor for failing to comply with state-specific employment standards. Compliance differs across all 50 states. To simplify the process, SixFifty has narrowed down multistate employer registration considerations to five core areas of focus.
Here’s what it looks like for companies hiring out-of-state-employees in Indiana—or accommodating employees moving to Indiana if there’s no established business nexus.
1. Indiana Employment Registration
To get started, your business will first need to establish an economic nexus in Indiana. You’ll do this by registering your business and reporting your new hire to Indiana’s New Hire Reporting Center within 20 days. Additionally, you’ll have to establish or update your unemployment insurance and workers’ compensation policies.
- Obtain a registered agent
- Register to do business in Indiana
- Report new hire to the Department of Labor
- Register for unemployment insurance
- Report unemployment insurance account to payroll provider
- Obtain workers’ compensation coverage or update the policy
2. Indiana Tax Registration
Next, you’ll need to get your Indiana tax situation in order by registering for income tax withholding, obtaining a W-4 from your employee and registering your business for a sales tax license or permit. Having an employee in Indiana will establish an economic nexus, and your business may be required to collect and pay sales tax, depending on sales figures and what exactly you’re selling.
- Register for income tax withholding account
- Obtain the completed state income tax withholding form from the employee
- Register for a sales tax license or permit
3. Indiana Employment Policies
Indiana has a handful of policies that will need to be included in your employee handbook, including policies related to leave for jury duty, military service and more. SixFifty’s solutions make it easy to create a state-specific employee handbook that will include all relevant policies that apply to your Indiana employee.
- Review employee handbook for compliance
- Update policies or add new leave policies as needed
4. Indiana Required Employment Policies (May 2023)
- Jury Duty Leave
- Meal and Rest Breaks (minors only)
- Military Service Leave
- Volunteer Emergency Responder Leave
- Witness Duty Leave
5. Indiana Employment Implications
There are a number of employment practices you’ll need to confirm are in compliance with Indiana state law. For starters, your employee needs to be paid at least the state minimum wage, and your overtime payment policy has to conform to Indiana’s rules. You’ll also need to determine whether your company’s insurance coverage can be extended to your new Indiana employee.
- Ensure non-compete provisions comply with Indiana law
- Confirm the employee is paid at least the minimum wage
- Review the applicable overtime laws
- Confirm the payroll practices meet the payment frequency standards in Indiana
- Consider whether insurance extends coverage to employees in Indiana
- Consider COVID-19 laws that affect the employee
6. Indiana Signage
While signage regarding workers’ compensation, unemployment insurance, OSHA, EEOC and other rules and regulations must be posted in physical business locations in Indiana, there is no clearly indicated policy regarding the posting of similar signage for remote employees. Employers should refer to the federal standards for electronic posting as laid out by the United States Department of Labor.
- Post or distribute required signage
Simplify Multistate Compliance with SixFifty
The process of maintaining compliance can be complex and extremely nuanced for companies unfamiliar with Indiana employment laws and standards. It’s why SixFifty has compiled an extremely useful tool for businesses hiring out-of-state employees in Indiana. To simplify the process of hiring out-of-state employees in Indiana or supporting remote employees on-the-move, check out our 50 State Hiring Kit.