An employer may (in good faith) impose an unpaid suspension for an employee’s infractions of workplace conduct rules—such as rules prohibiting sexual harassment, workplace violence, safety violations, drug or alcohol use, or violations of state or federal laws. This provision refers to serious misconduct, not performance or attendance issues. The suspension must be imposed based on a written policy applicable to all employees.

Employers generally have a great deal of latitude in disciplining, suspending, or terminating an at-will employee—who may be fired or terminated at any time without cause—provided the employer’s decision to discipline, suspend, or terminate the employee is not motivated by discrimination or another illegal motive.

Deductions from the pay of an exempt employee—generally a salaried employee who is exempt under the Fair Labor Standards Act (FLSA)—may be made for suspensions of one or more full days imposed in good faith for disciplinary reasons for infractions of workplace conduct rules. Such disciplinary deductions may only be made in full day increments.

Federal government employees may be placed on indefinite suspension—with or without pay—for disciplinary or other reasons, pending an investigation, inquiry, or further agency action. Federal government agencies generally impose indefinite employee suspensions in three situations:

(1) when the agency has reasonable cause to believe an employee has committed a crime for which a sentence of imprisonment could be imposed, the agency may suspend the employee indefinitely pending the outcome of the criminal proceeding or of any subsequent agency action following the conclusion of the criminal process;

(2) when the agency has legitimate concerns that an employee’s medical condition makes the employee’s continued presence in the workplace dangerous or inappropriate, the agency may suspend the employee indefinitely pending a determination that the employee is fit for duty; and

(3) when an employee’s access to classified information has been suspended and the employee must have such access to perform their job, the agency may suspend the employee indefinitely pending a final determination on the employee’s access to classified information.

In Indiana, employers can impose unpaid suspensions for serious infractions of workplace conduct rules, such as sexual harassment, violence, safety violations, drug or alcohol use, or legal violations, provided they act in good faith and follow a written policy that applies to all employees. This does not cover performance or attendance issues. Indiana follows the at-will employment doctrine, allowing employers to discipline, suspend, or terminate employees at any time, as long as the action is not discriminatory or otherwise illegal. For exempt employees under the FLSA, employers may deduct pay only in full-day increments for suspensions imposed for disciplinary reasons. Federal employees in Indiana may be indefinitely suspended, with or without pay, under specific circumstances such as criminal investigations, medical concerns, or issues with access to classified information.