Employment Law in Indiana

Pre-employment/Promotion/Hiring

Under federal law, an employer doesn't have to hire, or promote the most qualified applicant. But the employer cannot base decisions on personal characteristics that are not job-related. These characteristics often include:

• Age
• Race
• Sex
• Religion
• National origin
• Disability

An interviewer isn't allowed to ask questions relating to these characteristics. Interview questions that aren't allowed include:

• Are you married? Are you planning to get married?
• Do you have children? Are you planning to have children?
• Where were you born?
• What's your sexual orientation?
• Have you ever been arrested?

An interviewer can, however, ask about a personal characteristic if it could hinder your ability to fulfill the job's requirements.

Some examples might be:

• Have you ever been convicted of a crime?
• Can you prove that you are eligible to work in the US?
• Can you do this job with or without reasonable accommodations?

References

A previous employer is free to provide any non-confidential information about a previous employee, so long as it's true and isn't provided to maliciously harm the employee. An employer who provides false information that disparages the employee may be liable for defamation. In order to avoid potential liability, many employers often refuse to comment on a past employee's job performance and confirm only dates of hire and separation, plus wage or salary information.

Employment At Will

Indiana is considered an "employment at-will" state. At-will employees may be terminated for any reason, so long as it's not illegal. Generally, employees who work under an employment contract can only be terminated for reasons specified in the contract. However, in Indiana, the mere fact that an employment contract is in writing is not sufficient to overcome the presumption that the employment is at-will. To overcome this presumption, an employment contract must directly limit, in a meaningful and special way, the employer's right to terminate the employee without cause. In other words, the employer has to unequivocally indicate that it will not terminate the employee except under specific circumstances.

Employee Handbooks

While an employer is not required by law to have an employee handbook, in most cases, it is recommended. An employee handbook provides a centralized, complete and certain record of the employer's policies and procedures. An employee handbook also provides more convenient access by employees and managers.

At a minimum, an employee handbook should include:

• A statement regarding the at-will employment relationship
• An equal employment opportunity statement
• A policy regarding sexual and other types of harassment in the workplace
• Internet access, e-mail, and voice mail policies
• The Family Medical Leave Act

The laws regarding an employer's duties and responsibilities arising under an employee handbook are complex, and a licensed attorney should be contacted to review individual circumstances.

Workplace Safety

Federal and state laws require that most employers furnish a place of employment that is free from recognized hazards that are causing or are likely to cause death or serious physical harm to employees. In most instances, an employee may anonymously complain to a state or federal agency about an unsafe work environment and be protected against employer reprisals. The Indiana Occupational Safety and Health Division (IOSHA) provides assistance with workplace safety and health issues to employers, employees and workers' compensation insurance carriers and policyholders.

Workplace Injury

Indiana workers' compensation laws are designed to compensate employees, who have been injured or killed in work related accidents, according to a fixed monetary scheme, without having to resort to litigation. Dependents of a fatally injured employee may also be entitled to benefits. Employers may be protected by limits placed on the amount of an employee's recovery.

The amount of compensation paid to an employee depends upon the classification of his or her disability:

Temporary Total Disability (TTD) is paid for the time period an employee is completely unable to perform his or her regular work because of an injury. TTD is paid at the rate of two-thirds of the employee's pre-injury average weekly wage, subject to a maximum period of 500 weeks.

Temporary Partial Disability (TPD) is paid when the employee is partially unable to work. For example, an employee's injuries might limit the number of hours and employee is able to work or might mean that the employee is temporarily assigned to a job that pays less than the employee's pre-injury job. TPD is paid at the rate of two-thirds of the difference between the employee's pre- and post-injury average weekly wages, subject to a maximum period of 300 weeks.

Permanent Total Disability (PTD) awards are paid when it is established that the employee will never again be able to work in reasonable employment. A PTD award is paid for 500 weeks at the rate of two-thirds of the employee's pre-injury average weekly wage. For injuries occurring on or after January 1, 1998, the minimum total benefit is $75,000.
Indiana's workers' compensation system is premised on a trade-off between employees and employers. Employees promptly receive workers' compensation benefits for on-the-job injuries, and the limited workers' compensation benefits are the exclusive remedy against the employer, even when the employer was negligent.

Sexual Harassment

An employer may be liable to an employee for instances of "sexual harassment" which can include unwelcome sexual advances, conduct or other physical or verbal acts of a sexual nature, which occur in the workplace. The following conduct is generally considered sexual harassment:

• Direct sexual conduct--an employer makes sexual advances or statements
• "Quid pro quo" - job-related benefits are offered in exchange for sexual conduct
• Hostile work environment--an employer maintains an overly sexual work environment

Because the laws determining what conduct, or pattern of conduct, constitutes actionable sexual harassment are complex, a licensed attorney should be contacted to review individual circumstances.

Discrimination and Wrongful Termination

Employers are not allowed to terminate or discriminate against employees for the following reasons:

• Age
• Race
• Sex
• Religion
• National origin
• Disability
• Pregnancy

It's illegal for an employer to consider these characteristics with regard to:

• Promotions
• Job assignments
• Termination
• Wages

And it's illegal for an employer to terminate an employee:

• For refusing to break a law
• In retaliation for filing a discrimination or safety claim
• For taking leave under the Family and Medical Leave Act
• Without following its own stated procedure or policy
• For reasons not contained in the employment contract, if one exists

Family and Medical Leave

Under federal law, eligible employees are allowed to take up to 12 weeks of unpaid medical leave, with continued medical benefits and restoration of their original position upon return. An employee is eligible under FMLA when they:

• Have worked for the same employer for the previous 12 months
• Have worked at least 1250 hours in the previous 12 months
• Are employed by a "covered" employer, which is:
All federal, state, and local governments and agencies
Private employers with 50 or more employees for 20 weeks in the calendar year and engaged in interstate
commerce


Post-employment

Unemployment Benefits

Unemployment benefits are based on combinations of federal and state statutes. Indiana's unemployment compensation program is administered by the state and provides monetary compensation to workers who have been terminated without cause, through no fault of their own. Employees who voluntarily terminate their employment for "good cause" may also be entitled to benefits.

In Indiana, the law governing unemployment benefits is the Indiana Security Act. The Indiana Department of Workforce Development administers Unemployment Compensation. Benefits are generally available for a maximum of 26 weeks out of any 52-week benefit period. Benefits are calculated as a percentage of the worker's income over a recent 52-week period.


COBRA

COBRA, which stands for the Consolidated Omnibus Budget Reconciliation Act, is the federal law that gives terminated employees and their families the right to continue group health benefits provided by group plans. This extended coverage is provided for limited periods of time under certain circumstances such as voluntary or involuntary job loss, reduction in hours worked, transition between jobs, death, divorce, and other life events. Many states have similar laws.

The new key provision: Individuals who were terminated on or after September 1, 2008, who qualified for COBRA but declined coverage, now have the right to choose to be covered -- with a government-paid subsidy of the insurance premium through 2009. The key date is March 1: Employers who terminated employees between September 1, 2008 and March 1, 2009 must notify qualifying employees who declined COBRA coverage that they (and their spouses, ex-spouses, and qualifying dependents) now have the right to choose to continue coverage. An employer's notice must tell eligible individuals they have 60 days to elect COBRA coverage. If they do so, under the new law, the premium subsidy ends when they:

> Become eligible for health insurance coverage from another employer.

> Enroll in and are covered by Medicare.

Organizations that terminate employees on or after March 1, 2009 must notify them (and their qualifying spouses, exspouses, and dependents) of the right to continue coverage if they've been in an employer's benefit plan. Employers must use a federal government issued model notice.

However, the applicable government agencies have 30 days following the law's February 17th enactment date to design and issue the notice. Employers should begin to track down the current address or contact information for eligible individuals to expedite the contact process when the model notice is available. Notices must be sent to eligible individuals within 60 days of the enactment date of the new law.

Here's a rundown of other COBRA changes:

March 1 is a Key COBRA Date
Involuntary Job Loss?

Who are involuntarily terminated employees? COBRA benefits are available to voluntarily and involuntarily terminated employees – except those terminated for gross misconduct – and their qualifying spouses, ex-spouses, and dependents covered in an employer's health insurance plan.

But which employees are involuntarily terminated for gross misconduct? The new law doesn't define these terms. Employers can expect disagreements on whether or not certain employees were involuntarily terminated. Individuals involved in these disputes can use a newly created appeal process with the Department of Labor (DOL).

The DOL has 15 days to determine the individual's eligibility for the COBRA subsidy.

Starting March 1, 2009 there is new COBRA subsidy to help pay the premiums for health benefits. The employee share of COBRA premiums may not exceed 35 percent of the total premium cost. The remaining premium cost must be paid by employers, who then can claim a tax credit against wage withholding and payroll taxes to cover their paid portion of the premiums.

When an employer's deductions from wage withholding and payroll taxes don't cover all of the COBRA subsidy, the employer will be able to file with IRS for the remaining amount.

The premium subsidy continues for up to nine months for eligible individuals and their qualifying family members.

Eligible individuals who declined to take COBRA benefits between September 1, 2008 and March 1, 2009 have a new 60-day election period during which they can choose to enroll and receive the subsidized COBRA coverage.

The COBRA premium subsidy continues through December 31, 2009.

The temporary subsidy is available to qualifying individuals under the federal COBRA law and similar state and governmental medical benefit continuation coverage laws.

Individuals are not eligible for COBRA subsidies in a year when their adjusted gross
incomes (AGIs) exceed certain limits. The government recaptures part or all of the
COBRA subsidy in the form of additional income tax when the qualifying
individual's AGI is between $125,000 and $145,000 for single filers or $250,000 and
$290,000 for joint filers. Individuals who anticipate that their incomes will exceed
those amounts in a taxable year can waive the COBRA premium subsidy.

The COBRA 18-month continuation coverage period remains the same and begins
with the individual's loss of health insurance benefits in an employer plan due to the
qualifying employee's involuntary termination of employment.

The employer can permit eligible individuals to switch their coverage option to a less
expensive choice when they elect to exercise their COBRA rights. This is a change from the previous COBRA provision that allowed qualifying individuals only to continue the coverage option they had as active employees.


Who Qualifies for COBRA?
Some Key Eligibility Factors

Qualifying events that trigger an individual's right to elect COBRA continuation of health insurance benefits are the following:

For employees:

> The involuntary termination of employment for reasons other than gross misconduct.

> A reduction in the number of hours of employment that disqualifies the individual from
employer-paid coverage in an employer-sponsored health plan.

For employees' spouses and ex-spouses, what's an Employer to Do?

First, when terminating an employee, obtain and retain written documentation that confirms the reason or reasons for the employee's job separation. For example, conduct exit interviews with departing employees and have them complete an "Exit Interview" Form on which they indicate the reason or reasons for leaving the job.

Second, assume that any termination that occurs because of the employer's actions is likely an involuntary termination.

Third, do NOT engage in constructive discharge. In other words, do not get involved in activities that encourage or force an employee to quit a job and then expect to evade responsibility for a termination.

> The voluntary or involuntary termination of employment of the covered employee for
reasons other than gross misconduct.

> A reduction in the number of hours of employment of the covered employee that
disqualifies an individual from employer-paid coverage in an employer-sponsored health
plan.

> The covered employee's becomes entitled to Medicare.

> The divorce or legal separation of the covered employee.

> The death of the covered employee.

For employees' dependent children:

> The same five events listed above for spouses and ex-spouses.

> The loss of dependent child status under the health plan rules.

To qualify for COBRA continuation benefits, the covered individual must have been enrolled in the employer's health benefits plan when the employee was working. And the employer's health plan must continue in effect.

[NOTE: Information and guidance in this story is intended to provide interesting and helpful information on the subjects covered. It is not intended to provide a legal service for readers' individual needs. For legal guidance in your specific situations, always consult with an attorney who is familiar with employment law and labor issues.]