Indiana has two statutes which function to provide a serious incentive to employers to ensure that an employee’s final paycheck is paid by the next regularly scheduled pay date. One statute applies to an employee whose position is terminated (I.C. §22-2-9-2) while the other statute applies if the employee leaves voluntarily (I.C. §22-2-5-1). The penalty provisions have been interpreted to be the same. An employee is entitled to 10% of the amount owed accruing on a daily basis up to the point where an additional 200% of the owed wages has accrued. This is effectively a treble damages award. Additionally, the employee is entitled to the costs, including attorney’s fees, that the employee incurs in seeking collection of the unpaid wages. This is a very valuable provision which gives attorneys the incentive to take on cases for relatively small amounts of wages which would otherwise be unprofitable to pursue. All corporate clients should be advised that they need to pay the employee’s last paycheck, in full, with no deductions for any claimed expenses or other amounts allegedly owed to the employer, at the time of that last pay date. Failure to do so not only results in the rapid accrual of additional monies, but often, the amount of attorney’s fees exceeds the amount of unpaid wages.
