Case Title: Tabatha J. Naugle and Sandra M. Cain v. Beech Grove City Schools

Citation: 

Docket Number: 49S02-0606-CV-242

State: indiana

Court: Indiana Supreme Court

Date: 2007-04-27T00:00:00Z

Document:
ATTORNEY FOR APPELLANTS 
 
 
 
 
ATTORNEYS FOR APPELLEE 
Ronald E. Weldy  
 
 
 
 
 
David L. Swider 
Indianapolis, Indiana 
 
 
 
 
 
Susan Oliver 
 
 
 
 
 
 
 
 
Indianapolis, Indiana 
ATTORNEYS FOR AMICUS CURIAE ISTA 
 
 
 
 
Eric M. Hylton 
 
 
 
 
 
 
Robert W. Rund 
James B. Chapman II 
 
 
 
 
 
D. Michael Wallman 
Indianapolis, Indiana 
 
 
 
 
 
Indianapolis, Indiana 
 
ATTORNEY FOR AMICUS CURIAE  
 
 
 
 
ATTORNEY FOR AMICUS CURIAE 
AFSCME COUNCIL 62 
 
 
 
 
 
INDIANA SCHOOL BOARDS ASSOCIATION 
William R. Groth  
 
 
 
 
 
Julie M. Slavens  
 
 
 
Indianapolis, Indiana 
 
 
 
 
 
Indianapolis, Indiana 
______________________________________________________________________________ 
 
In the 
Indiana Supreme Court  
_________________________________ 
 
No. 49S02-0606-CV-242 
 
TABATHA J. NAUGLE AND SANDRA M. 
CAIN, ON BEHALF OF THEMSELVES AND 
OTHERS SIMILARLY SITUATED,  
 
 
 
 
 
 
 
 
Appellants (Plaintiffs below), 
 
v. 
 
BEECH GROVE CITY SCHOOLS, 
 
 
 
 
 
 
 
 
Appellee (Defendant below). 
_________________________________ 
 
Appeal from the Marion Circuit Court, No. 49C01-0402-PL-490  
The Honorable Theodore M. Sosin, Judge 
_________________________________ 
 
On Petition To Transfer from the Indiana Court of Appeals, No. 49A02-0505-CV-472  
_________________________________ 
 
April 27. 2007 
 
Boehm, Justice. 
 
We hold that the term “days” as used in the Wage Payment Statute refers to business days 
and not calendar days.  We also hold that (1) our reasoning in Brownsburg Community School 
 
Corp. v. Natare Corp., 824 N.E.2d 336 (Ind. 2005) does not prevent the application of the Wage 
Payment Statute to school corporations; (2) there is no school powers statute that precludes ap-
plication of the Wage Payment Statute to school corporations; (3) there is no generic good faith 
defense to the Wage Payment Statute; and (4) there is no requirement within the Ten-Day Rule 
of the Wage Payment Statute that the employee request or demand wages. 
Facts and Procedural History 
Beech Grove City Schools (“Beech Grove”) is a public school corporation located in 
Beech Grove, Indiana.  Tabatha J. Naugle and Sandra M. Cain were employed by Beech Grove 
as custodians during 2003.     
Prior to 2003, Beech Grove paid its employees twenty-six times in each calendar year 
based on pay periods of two weeks.  Payments were made seven calendar days (five business 
days) after the end of each pay period.  Beech Grove adjusted its payroll schedule to resolve two 
issues in 2003.  First, in that year there were twenty-seven pay dates instead of the usual twenty-
six.  This anomaly occurs every seven years.  Second, several employees requested that they re-
ceive their paychecks on the Wednesdays before the four-day Thanksgiving and Fall Recess 
breaks, rather than on the Mondays following the breaks.  Under the previous payroll schedule, 
Beech Grove could not satisfy these requests because it would have had insufficient time—only 
three workdays after the pay period—to prepare and issue the payroll before the breaks.      
To correct the extra pay period and meet these employee requests, Beech Grove imple-
mented a new payroll schedule beginning on July 11, 2003.  The first pay date in July 2003 was 
moved from July 4 to July 11.  The new payroll schedule provided for the employees to receive 
their wages fourteen calendar days (ten business days) after the end of each pay period instead of 
the previous seven calendar days (five business days).  Under this new payroll schedule, Beech 
Grove had twenty-six pay dates in 2003 instead of twenty-seven and was able to pay employees 
on the Wednesdays before the two breaks.  The only complaint Beech Grove received about the 
new schedule was from a single employee who mistakenly thought that he would lose one week 
of pay.  Beech Grove discontinued the new system on July 9, 2004 and reverted to the previous 
procedure of paying employees seven calendar days (five business days) after the end of each 
pay period.    
 
2
Naugle voluntarily resigned from her employment at Beech Grove on October 24, 2003, 
and Cain was terminated on February 6, 2004.  On February 18, 2004, Naugle and Cain filed suit 
against Beech Grove, alleging that Beech Grove had violated the Wage Payment Statute by fail-
ing to pay their wages within the time the statute required.1  Naugle and Cain initiated this claim 
as a class action and requested actual wages, liquidated damages, and attorney fees as provided 
under the damages provision of the Wage Payment Statute.  The parties, with the approval of the 
trial court, agreed to defer the issue of class certification until the issue of liability was resolved.      
 
The Wage Payment Statute provides that “[p]ayment shall be made for all wages earned 
to a date not more than ten (10) days prior to the date of payment.”  Ind. Code § 22-2-5-1(b).  
Naugle and Cain moved for partial summary judgment on the issue of Beech Grove’s liability for 
violating this “Ten-Day Rule.”  Beech Grove filed a cross-motion for summary judgment, argu-
ing that (1) the Ten-Day Rule requires a demand for payment before penal damages and attorney 
fees may be assessed but no demand was made; (2) the term “days” in the Ten-Day Rule means 
business days rather than calendar days; (3) Beech Grove is a political subdivision and, as such, 
is not subject to the Wage Payment Statute; (4) Beech Grove is not subject to punitive damages 
and attorney fees under the doctrine announced in Brownsburg Community School Corp. v. Na-
tare Corp., 824 N.E.2d 336 (Ind. 2005), reh’g denied; and (5) the Wage Payment Statute does not 
apply because Beech Grove acted in good faith.  The trial court denied the plaintiffs’ motion for 
partial summary judgment and granted Beech Grove’s cross-motion for partial summary judg-
ment on each of the grounds advanced by Beech Grove.   
 
Naugle and Cain appealed.  The Court of Appeals held that the trial court wrongly inter-
preted “days” to mean business days instead of calendar days.  Nevertheless, it affirmed, con-
cluding that under Brownsburg public school corporations were not employers subject to the 
Wage Payment Statute.  Naugle v. Beech Grove City Schs., 840 N.E.2d 854 (Ind. Ct. App. 
                                                 
1 The plaintiffs also initiated a claim under the Wage Claims Statute.  That statute states in pertinent part: 
“[w]henever any employer separates any employee from the pay-roll, the unpaid wages or compensation 
of such employee shall become due and payable at regular pay day for pay period in which separation 
occurred . . . .”  Ind. Code § 22-2-9-2(a).  We have noted the differences between the Wage Payment 
Statute and Wage Claims Statute.  St. Vincent Hosp. and Health Care Ctr., Inc. v. Steele, 766 N.E.2d 699, 
704-05 (Ind. 2002).  Claimants may proceed under the Wage Payment Statute by filing a complaint.  In 
contrast, the Wage Claims Statute requires that a wage claim be submitted to the Department of Labor for 
administrative enforcement.  Id. at 705; I.C. § 22-2-9-4(a).  Because no administrative proceedings have 
been pursued, the plantiffs’ contentions under the Wage Claim Act are not before us.     
 
3
2006).  The Court of Appeals did not address the other grounds advanced by Beech Grove in 
support of the trial court’s ruling.  We granted transfer.2  2006 Ind. LEXIS 570 (Ind. June 30, 
2006). 
Standard of Review 
 
Upon reviewing the grant or denial of summary judgment, we use the same standard of 
review as the trial court.  Summary judgment is appropriate only where the evidence shows that 
there is no genuine issue of material fact and the moving party is entitled to judgment as a matter 
of law.  Poznanski ex rel. Poznanski v. Horvath, 788 N.E.2d 1255, 1258 (Ind. 2003) (citing Ind. 
Trial Rule 56(C); Tom–Wat, Inc. v. Fink, 741 N.E.2d 343, 346 (Ind. 2001)).  All facts and rea-
sonable inferences drawn from those facts are construed in favor of the non-moving party.  
Troxel v. Troxel, 737 N.E.2d 745, 748 (Ind. 2000) (citing Shell Oil Co. v. Lovold Co., 705 
N.E.2d 981, 983-84 (Ind. 1998)).  The review of a summary judgment motion is limited to those 
materials designated in the trial court under Trial Rule 56(C).  Id.
Application of the Wage Payment Statute 
 
In St. Vincent Hospital and Health Care Center, Inc. v. Steele, 766 N.E.2d 699, 703 (Ind. 
2002), we held that the Wage Payment Statute governs both the frequency and amount an em-
ployer must pay its employee.  See I.C. §§ 22-2-5-1 to 22-2-5-3.  Subsection 1(a) provides that 
“[e]very person, firm, corporation, limited liability company, or association, their trustees, les-
sees, or receivers appointed by any court, doing business in Indiana, shall pay each employee at 
least semimonthly or biweekly, if requested, the amount due the employee.”  (emphasis added).  
The Ten-Day Rule appears in subsection 1(b) and also imposes a requirement as to the timing of 
wage payment.  An employer who fails to make payment of wages to any employee as provided 
in Indiana Code section 22-2-5-1 is subject to liquidated damages and attorney fees.  I.C. § 22-2-
5-2.  As explained below, we do not agree with all of the five independent reasons why Beech 
                                                 
2 On March 27, 2006, Naugle and Cain filed a motion to strike portions of Beech Grove’s Brief in Re-
sponse to Petition To Transfer and the Indiana School Boards Association’s Brief as Amicus Curiae in 
Response to Petition To Transfer.  The Motion to Strike is granted as to Beech Grove’s Brief in Response 
to Petition To Transfer and denied as to the Indiana School Boards Association’s Brief as Amicus Curiae 
in Response to Petition To Transfer.  Because our decision on the merits of this cause does not turn on the 
challenged portions of these briefs, there is no need for further discussion of this motion. 
 
 
4
Grove contends it was not liable under the Wage Payment Statute, but we agree that Beech 
Grove did not violate the statute. 
A.  Brownsburg v. Community School Corp. v. Natare Corp.
 
Beech Grove contends that this case is controlled by the reasoning of this Court in 
Brownsburg Community School Corp. v. Natare Corp., 824 N.E.2d 336 (Ind. 2005), reh’g de-
nied.  Beech Grove contends that it is a public school and therefore it is not subject to the Wage 
Payment Statute because the General Assembly did not intend for public school corporations to 
be subject to statutory liquidated damages.  The trial court agreed with that argument, and the 
Court of Appeals affirmed.  Naugle, 840 N.E.2d at 858-59.  We do not agree that Brownsburg 
applies to this case. 
 
In Brownsburg, a supplier of prefabricated pools sued a school corporation, an architect, 
and a swimming pool consultant, alleging the three conspired in violation of the Indiana Anti-
trust Act to exclude the supplier from consideration as a supplier for a swimming pool construc-
tion project.  The supplier sought treble damages, costs, and attorney fees under the Antitrust 
Act.  The school corporation moved for judgment on the pleadings, alleging it was not a “per-
son” as that term was used in the Antitrust Act and therefore it was not an entity subject to the 
civil treble damages under that statute.  Brownsburg, 824 N.E.2d at 338.  The Court of Appeals 
held the school corporation was a “person,” as that term was defined in the Antitrust Act, and 
therefore could sue and be sued under that statute.  Id.  We held that the Brownsburg school cor-
poration was a “person” that could sue under the Antitrust Act, but it was not liable for treble 
damages under the statute.  Id. at 344.  
 
The Court of Appeals, citing Brownsburg, concluded that “[i]t is illogical to suggest that 
public schools should be subject to treble damages for paying wages four days late, but immune 
from such penalties when they engage in more serious—quasi-criminal—wrongdoing as in B-
rownsburg.”  Beech Grove, 840 N.E.2d at 859.  The Court of Appeals held that in the absence of 
definitions of “person” and “corporation” in the Wage Payment Statute that specifically include 
school corporations or governmental entities, our reasoning in Brownsburg controlled and ex-
cluded governmental units from the Wage Payment Statute.  Id. 
 
5
 
The Wage Payment Statute applies to “[e]very person, firm, corporation, limited liability 
company, or association, their trustees, lessees, or receivers appointed by any court, doing busi-
ness in Indiana . . . .”  I.C. § 22-2-5-1(a) (emphasis added).  Indiana Code section 1-1-4-5(17) 
extends the definition of a “person” to include “bodies politic and corporate.”  Moreover, Indiana 
Code section 20-26-2-4 defines a school corporation as  “a local public school corporation estab-
lished under Indiana law . . . .”  Thus, Beech Grove is a “person” and a “corporation” as these 
terms are used in the Wage Payment Statute, just as the school corporation in Brownsburg was a 
“person” under the Antitrust Act. 
 
Brownsburg did not turn on the definition of “person” under the relevant statute.  In B-
rownsburg, we concluded that “municipal corporations are ‘persons’ as that term is used in the 
Indiana Antitrust Act” but nevertheless are not subject to treble damages claims.  824 N.E.2d at 
344.  The reasons for that conclusion do not apply to the Wage Payment Statute.  Municipal cor-
porations are not subject to treble damages under the Antitrust Act because that statute was 
criminal in nature.  At the time of the adoption of the Antitrust Act, the legislature did not con-
template the possibility that a governmental entity might commit a crime.  To the contrary, gov-
ernmental entities were seen as the “victims, not perpetrators” of the acts prohibited by the provi-
sions of the Antitrust Act in issue in Brownsburg.  Id.  The Wage Payment Statute is not criminal 
in nature.  Nor is there any reason to believe that it was the intent of the legislature to exclude 
schools from liability under this statute.  Schools have always had employees.  Unlike the Anti-
trust Act, which viewed governmental entities as victims, the Wage Payment Statute clearly sees 
employees, public or private, as the persons to be protected.  School employees rely on their 
wages to the same extent as private employees, and nothing in the Wage Payment Statute sup-
ports excluding them from its protection.   
We conclude that the Wage Payment Statute applies to school corporations.  This holding 
is consistent with a number of pre-Brownsburg opinions from the Court of Appeals that assumed 
without specific discussion that the Wage Payment Statute applied to governmental employers.  
See Abner v. Dep’t. of Health of State of Ind. ex rel. Ind. Solders’ and Sailors’ Children’s Home, 
777 N.E.2d 778, 784 (Ind. Ct. App. 2002), trans. denied; Cox v. Town of Rome City, 764 N.E.2d 
242, 249-50 (Ind. Ct. App. 2002); Schwartz v. Gary Cmty. Sch. Corp., 762 N.E.2d 192, 198 (Ind. 
Ct. App. 2002), trans. denied; Hendershot v. Carey, 616 N.E.2d 412 (Ind. Ct. App. 1993), over-
 
6
ruled on other grounds by St. Vincent Hosp. and Health Care Ctr. v. Steele, 766 N.E.2d 699, 703 
(Ind. 2002).  But see City of Hammond v. Conley, 498 N.E.2d 48, 53 (Ind. Ct. App.), overruled 
on other grounds by Osler Inst., Inc. v. Inglert, 569 N.E.2d 636 (Ind. 1991).  The failure of the 
legislature to change the statute to exclude governmental employers in light of these decisions 
also supports this interpretation of the statute.  See In re Adoption of Infant Child Baxter, 799 
N.E.2d 1057, 1062 (Ind. 2003). 
B.  School Powers Statute 
Beech Grove points to the statutory authority of the governing bodies of school corpora-
tions as support for its claim that the Wage Payment Statute does not apply to it.  Specifically, it 
identifies the authority to “[f]ix and pay the salaries and compensation” of school employees and 
to “adopt schedules of salaries or compensation.”  I.C. § 20-26-5-4(8)(B), (C) (West Supp. 
2006).  Beech Grove argues that these school powers preclude application of the Wage Payment 
Statute to school corporations.  Beech Grove cites no authority for the claim that this general 
power of a school corporation authorizes it to exercise the power in a manner that contravenes 
other specific statutes.  As a general proposition, the law does not support Beech Grove’s conten-
tion.  The usual rule is that the board of school commissioners possesses the powers necessary to 
carry out its purpose, but the “powers must be exercised subject to the paramount laws of the 
state.”  Bd. of Sch. Comm’rs of Indianapolis v. State, 129 Ind. 14, 26, 28 N.E. 61, 65 (Ind. 1891).  
We see nothing in the Wage Payment Statute to cause a different result here.   
C.  Good Faith Exception 
 
Beech Grove asserts that it has no liability under the Wage Payment Statute because 
Beech Grove’s actions in this case fit within a good faith exception to the Wage Payment Statute.    
Beech Grove relies on David A. Ryker Painting Co. v. Nunamaker, 818 N.E.2d 989 (Ind. Ct. 
App. 2004), opinion vacated by 849 N.E.2d 1116 (Ind. 2006).  In Ryker, the Court of Appeals 
recognized a good faith exception to the application of the Wage Payment Statute.  The Court of 
Appeals stated that “the purpose of the Wage Payment Statute is to punish employers for con-
verting their employees’ services by stealing their wages” and found “no need to punish an em-
ployer that genuinely believes that it has done the right thing in the frequency and amount of 
compensation it gives its employees.”  Id. at 992.  We granted transfer and decided the case on 
 
7
other grounds.  We also noted that we have never addressed whether “a good faith defense” to 
the Wage Payment Statute exists.  Ryker, 849 N.E.2d at 1119 (citing St. Vincent Hosp., 766 
N.E.2d at 701-02 n.2).  
 
Until Ryker, the Court of Appeals had described the language of Indiana Code section 
22-2-5-2 as “mandatory.”  See, e.g., Valadez v. R.T. Enters., Inc., 647 N.E.2d 331, 333 (Ind. Ct. 
App. 1995) (referring to Indiana Code section 22-2-5-2 and stating that “the liquidated damages 
are mandatory” and “the plain language of the statute makes no exception for late payments”); 
Osler Inst., Inc. v. Inglert, 558 N.E.2d 901, 905 (Ind. Ct. App. 1990) (“Ind. Code 22-2-5-2 does 
not contain a good faith provision; its terms are mandatory.”).  We agree with these opinions of 
the Court of Appeals that conclude there is no generic “good faith” defense to the Wage Payment 
Statute.  Indiana Code section 22-2-5-2 states  
[e]very such person, firm, corporation, limited liability company, or asso-
ciation who shall fail to make payment of wages to any such employee as pro-
vided in section 1 of this chapter shall, as liquidated damages for such failure, pay 
to such employee for each day that the amount due to him remains unpaid ten 
percent (10%) of the amount due to him in addition thereto, not exceeding double 
the amount of wages due, and said damages may be recovered in any court having 
jurisdiction of a suit to recover the amount due to such employee, and in any suit 
so brought to recover said wages or the liquidated damages for nonpayment 
thereof, or both, the court shall tax and assess as costs in said case a reasonable 
fee for the plaintiff’s attorney or attorneys. 
(emphasis added).  First, and most importantly, there is no good faith exception in the language 
of the Wage Payment Statute; rather the statute by its terms mandates compliance.  Second, per-
mitting a good faith exception to the Wage Payment Statute would contravene the public policy 
of the statute to ensure that employers pay their employees’ wages in a timely fashion and in the 
correct amount.  Many employees find it essential that they be paid on time to meet current obli-
gations of daily life.  Employees often do not have the will or economic staying power to engage 
in a court battle over relatively small amounts.  Without the incentive of liquidated damages and 
attorney fees, employees may be hesitant to assert claims for violations of the law.  If so, a good 
faith defense would lessen the deterrent effect of the penalty provision of the Wage Payment 
Statute.  In short, the plain language of the statute and the public policy behind it compel us to 
conclude that there is no good faith exception to the Wage Payment Statute.    
D.  The Ten-Day Rule 
 
8
1.  Requirement that Employee Request or Demand Wages 
 
Beech Grove contends that the Ten-Day Rule of the Wage Payment Statute contains an 
implicit requirement that an employee demand or request the receipt of wages within ten days of 
the date wages are earned before the penalty provision of Indiana Code section 22-2-5-2 is trig-
gered.  Beech Grove argues the plaintiffs have no claim under the Wage Payment Statute be-
cause they did not demand or request to be paid within ten days following a pay period.  Beech 
Grove claims that without an implicit requirement for an employee to demand or request a wage 
payment the Ten-Day Rule impinges upon the parties’ constitutional right to contract.  For the 
reasons explained below, we find no such requirement in the Ten-Day Rule of the Wage Pay-
ment Statute. 
 
An early version of the Wage Payment Statute imposing a penalty on employers who did 
not pay employees semi-monthly was held unconstitutional in Superior Laundry Co. v. Rose, 
193 Ind. 138, 137 N.E. 761 (1923).  Because the statute did not leave employees and employers 
free to bargain for payment at other times or at longer intervals, this Court found that employers 
and employees were deprived of their right to contract.  Id. at 141; 137 N.E. at 761.  This Court 
has stated that “[l]iberty to contract on one’s own terms, to decide for himself his own employ-
ment, to buy and sell, to exchange one belonging for another, are among his most valuable and 
cherished rights.”  Republic Iron & Steel Co. v. State, 160 Ind. 379, 387, 66 N.E. 1005, 1008 
(1903).  Thus, “[s]tatutes which have fixed the time for payment of wages have repeatedly been 
held unconstitutional as abridging the right of freedom of contract unless such statutes made pro-
vision for a ‘request’ or ‘demand’ of payment by the employee.”  Standard Liquors v. Nar-
cowich, 121 Ind. App. 600, 604, 99 N.E.2d 268, 269 (1951) (citing numerous cases from this 
Court). 
The current version of the Wage Payment Statute, however, does have a provision for a 
request or demand of payment by the employee.  Indiana Code section 22-2-5-1(a) clearly states 
that employers “shall pay each employee at least semimonthly or biweekly, if requested, the 
amount due the employee.”  (emphasis added).  There is no reference to a “request” in subsection 
(b).  It therefore seems the legislature intentionally did not incorporate the “if requested” lan-
guage in the Ten-Day Rule but did include it in the immediately preceding subsection that ad-
dresses the length of pay periods.  These two subsections do not impose two distinct timing re-
 
9
quirements.  Rather the two subsections operate in concert:  parties may freely agree to various 
pay periods under subsection 1(a).  Pope v. Wabash Valley Human Servs., Inc., 500 N.E.2d 209, 
213 (Ind. Ct. App. 1986).  Subsection 1(b) supplies the maximum time limit within which em-
ployees must be paid after the end of the pay period.  This interpretation of the rule is consistent 
with prior Indiana state and federal decisions addressing the Ten-Day Rule.  See, e.g., Manzon v. 
Stant Corp., 138 F.Supp.2d 1110, 1114 (S.D. Ind. 2001); Schwartz, 762 N.E.2d at 197-98.  The 
Ten-Day Rule is in place to ensure that employees receive their pay in a timely fashion and to 
provide employers adequate time after the agreed upon pay period to calculate wages.  Because 
employers and employees are free to contract for various pay periods under subsection (a), the 
lack of a demand or request provision in the Ten-Day Rule does not significantly impair the par-
ties’ right to contract, and constitutional concerns are satisfied.   
Beech Grove contends that this interpretation of the Ten-Day Rule will pose “harsh and 
illogical consequences,” arguing that employers would be deterred from offering a variety of tra-
ditional compensation plans and benefits.  We disagree.  Beech Grove first argues that if we 
adopt this interpretation “[v]acation pay could no[t] be accrued beyond 10 days after the payroll 
period in which the services supporting the benefit were provided.”  There is no legal require-
ment to compensate for unused vacation time.  Williams v. Riverside Cmty. Corr. Corp., 846 
N.E.2d 738, 747 (Ind. Ct. App. 2006), trans. denied.  But if vacation pay is to be compensated, it 
is deferred compensation in lieu of wages and is subject to the provisions of the Wage Payment 
Statute.  Id.  The time of payment of vacation pay is usually deferred because the accrual of va-
cation is unknown until termination of the employment.  Absent an agreement to the contrary, an 
employee is not entitled to accrued vacation pay until termination.  Mitchell v. Universal Solu-
tions of N.C., Inc., 853 N.E.2d 953, 958 (Ind. Ct. App. 2006) (citing Ind. Heart Assocs., P.C. v. 
Bahamonde, 714 N.E.2d 309, 311-12 (Ind. Ct. App. 1999)).  Vacation pay is therefore not sub-
ject to the Ten-Day Rule until termination.  See Jines v. Evans Motors, Inc., 292 F.Supp.2d 1130, 
1139 (N.D. Ind. 2003).  Beech Grove also argues that our interpretation would require that “[t]he 
many Indiana employers who pay their employees a performance-based bonus and/or commis-
sions on a quarterly or an annual basis [] cease the practice.”  Many bonuses are not subject to 
the Wage Payment Statute in the first place.  “[A] bonus is a wage if it is compensation for time 
worked and is not linked to a contingency such as the financial success of the company.”  High-
house v. Midwest Orthopedic Inst., P.C., 807 N.E.2d 737, 740 (Ind. 2004) (internal quotation 
 
10
marks omitted) (quoting Pyle v. Nat. Wine & Spirits Corp., 637 N.E.2d 1298, 1300 (Ind. Ct. 
App. 1994)).  If, however, a bonus is dependent on other factors than the employee’s efforts, it is 
not subject to the Wage Payment Statute.  Id. at 740.  Even if the compensation can be character-
ized as a wage, it can be paid by agreement over a longer period.  Pope, 500 N.E.2d at 213.    
2.  Business Days or Calendar Days 
Beech Grove contends that the word “day” in the Ten-Day Rule means business days 
rather than calendar days.  Beech Grove argues that because it paid its employees ten business 
days (or fourteen calendar days) after each pay period during the payroll schedule at issue it 
complied with the terms of the Wage Payment Statute.  The trial court agreed with Beech Grove, 
but the Court of Appeals reversed, concluding that our opinion in Moag v. State, 218 Ind. 135, 
31 N.E.2d 629 (1941) held that when the word “days” is not defined in a statute as business days 
the default understanding is calendar days.  Naugle, 840 N.E.2d at 857-58.   
The Court of Appeals found the following paragraph to establish that the term “days” as 
used in the Wage Payment Statute referred to calendar and not business days: 
A day is the unit of time.  It commences at 12 o’clock P.M. and ends at 12 
o’clock P.M., running from midnight to midnight.  In the division of time 
throughout the world, we believe this is regarded as the civil day.  When the word 
“day” is used in a statute or in a contract, it means the twenty-four hours, and not 
merely the day as popularly understood, from sunrise to sunset, or during the time 
the light of the sun is visible. 
Moag, 218 Ind. at 141, 31 N.E.2d at 632 (quoting Benson v. Adams, 69 Ind. 353, 354, 1879 WL 
5982, at *2).  In Moag, an employee of a loan and trust company appealed his conviction for the 
crime of making a false entry in the records of a bank.  The employee argued that the false en-
tries were made during the morning or afternoon hours of August 8, and the trust company had 
ceased its operations on August 7.  He argued that because the trust company was not “engaged 
in the business of banking” when the false entries were made he had not violated the statute.  Id. 
at 138, 31 N.E.2d at 630-31.  Quoting the above paragraph from Benson, Moag rejected the 
State’s argument that the morning or afternoon hours of August 8 were part of the legal day of 
August 7.  Id. at 141, 31 N.E.2d at 632.  Moag sheds no light on the issue before us.  The statute 
at issue in Moag did not use the term “day,” and the case certainly did not address the issue of 
business days versus calendar days.   
 
11
Benson, on the other hand, did involve a statute that used the term “days”:  “On all bills 
of exchange, payable within this State, whether sight or time bills, three days grace shall be al-
lowed.”  Benson, 69 Ind. at 355, 1879 WL 5982, at *2.  The question in Benson was whether an 
action on a promissory note could be commenced on the third day of grace.  The Court con-
cluded that “day” meant the “entire twenty-four hours” and the obligor “has all of the last day 
within which to perform his obligation.”  Id. at 355, 1879 WL 5982, at *2.  The Court noted and 
distinguished cases from other states that allowed actions on promissory notes at the close of 
usual business hours on the last day of grace.  Thus, both Moag and Benson focused on whether 
a “day” referred to a twenty-four hour period as opposed to the period of daylight.  Neither ad-
dressed whether “days” in a statute referred to business days or calendar days.      
When the meaning of a term in a statute is at issue, we follow several rules of statutory 
construction.  “[W]hen a statute is unambiguous, a court must apply the plain and obvious mean-
ing and not resort to other rules of construction.”  Sholes v. Sholes, 760 N.E.2d 156, 159 (Ind. 
2001) (internal quotation marks omitted) (quoting Brownsburg Area Patrons Affecting Change v. 
Baldwin, 714 N.E.2d 135, 139 (Ind. 1999)).  If the legislature has not defined a word, it is af-
forded its plain and ordinary meaning.  Courts may properly consult English dictionaries to de-
termine the plain and ordinary meaning of words.  Ind. Office of Envtl. Adjudication v. Kunz, 
714 N.E.2d 1190, 1193 (Ind. Ct. App. 1999).  “‘Day’ may be defined as either ‘the mean solar 
day of 24 hours beginning at mean midnight’ or ‘the time established by usage or law for work, 
school, or business.’”  Koppin v. Strode, 761 N.E.2d 455, 461 (Ind. Ct. App. 2002) (quoting 
Merriam Webster’s Collegiate Dictionary 294 (10th ed. 1994)).  Because there is no single and 
uniform meaning of “day,” the statute requires interpretation.  Id.; see also State, Civil Rights 
Com’n v. County Line Park, Inc., 738 N.E.2d 1044, 1048 (Ind. 2000).  “The legislature is pre-
sumed to have intended the language used in the statute to be applied logically and not to bring 
about an unjust or absurd result.”  State, Civil Rights Com’n, 738 N.E.2d at 1048 (citing Riley v. 
State, 711 N.E.2d 489, 495 (Ind. 1999)).  The Wage Payment Statute deals with employment re-
lations that frequently arise in activities that are scheduled and not continuous.  If the term 
“days” in the Ten-Day Rule referred to calendar and not business days, the due dates for many 
wage payments would fall on Saturdays or Sundays, when most employees do not work.  Inter-
vention of holidays would even further shorten the time for payroll preparation, creating the 
problem that led Beech Grove to alter its pay dates in 2003.  Based on these practical considera-
 
12
tions, we conclude that the term “days” in the Ten-Day Rule means business days.  If the legisla-
ture chooses, it can, of course, alter that result. 
Finally, Naugle and Cain argue that this interpretation of “days” under the Ten-Day Rule 
will produce adverse consequences under other Indiana statutes that refer to “days.”  Our inter-
pretation of “days” in the Ten-Day Rule of the Wage Payment Statute is based on the language 
and purpose of this statute.  It has no particular force in other contexts.  
Conclusion 
For the foregoing reasons, we affirm the trial court’s grant of summary judgment in favor 
of Beech Grove. 
Shepard, C.J., and Dickson, Sullivan, and Rucker, J.J., concur. 
 
 
 
 
 
13