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Employment and labor laws in Arkansas 2024 guide

An employer's guide to labor laws, payroll, benefits, and taxes in Arkansas.

Arkansas at a Glance

State capital

Little Rock

Population

3 million

State motto

"The People Rule"

Key industries

Agriculture, Manufacturing, Health Care, Retail Trade

Major economic hubs

Little Rock, Fayetteville, Jonesboro, Hot Springs

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Introduction to employment laws in Arkansas

Overview

Arkansas has several labor laws that set it apart from other states. For instance, it offers more extensive healthcare continuation coverage obligations for smaller employers and a higher minimum wage than the standard set by federal law.

For organizations operating in the state, compliance with the state’s laws, in addition to federal requirements, is non-negotiable. In this guide, we’ll help keep you compliant as you onboard and manage workers in Arkansas.

Employing in Arkansas: Key employment laws and practices

Standard work hours

Arkansas’ standard working hours are consistent with most other states: Between 30 and 40 hours a week is considered full-time employment. Under the Fair Labor Standards Act (FLSA), non-exempt employees working beyond 40 hours a week are entitled to overtime pay at one-and-a-half times their regular pay rate.

Contractual labor is subjected to the same overtime rules, but the contracted hours may vary based on the agreement between the employer and the contracted worker.

Self-employed professionals, on the other hand, have no specific restrictions on work hours under Arkansas employment laws but should ensure they comply with any industry-specific regulations and codes of practice.

Minimum wage and overtime

Arkansas law mandates a minimum wage of $11 per hour for private-sector employees, which has remained the same since 2021. Employers must also comply with overtime regulations, paying non-exempt employees one-and-a-half times their regular pay for any time worked beyond 40 hours in a week.

Insurance and benefits

Arkansas requires employers to provide certain statutory benefits to employees. These include healthcare continuation coverage for smaller employers, a unique feature of Arkansas employment law. Coverage includes health, dental, and vision insurance but excludes prescription drugs, dental care, or vision services. Also, unlike federal law, Arkansas does not mandate continuation coverage in the event of an employee’s death.

The state does not have a specific provision for retirement benefits or 401k plans. However, employers often provide such benefits as part of a competitive compensation package.

Meal and rest periods

Arkansas employment laws do not specifically require employers to provide rest or meal breaks to employees.

Under Federal law, short breaks of five to 20 minutes are considered compensable working time that would be included in the sum of hours worked during the workweek and considered in determining if overtime was worked.

On the other hand, meal periods lasting at least 30 minutes are not considered compensable provided that the employee is completely relieved of all work duties during that period of time

Anti-discrimination laws

The Arkansas Civil Rights Act (ACRA) is a key piece of legislation that governs anti-discrimination laws in the state. It applies generally to employers with nine or more employees and protects employees from employer discrimination, including race, religion, gender (including pregnancy, childbirth, and related medical conditions), national origin (including ancestry), and disability. Beyond these federally recognized classes, Arkansas employment law also prohibits discrimination based on genetic information and military service (for employers with five or more employees).

Multiplier makes it easy to manage benefits for Arkansas employees.

Leave policies

Arkansas has several laws relating to required time off and leaves of absence for employees covering all employers. These include jury duty leave, crime victim leave, military leave, voting leave, and organ and bone marrow donation leave. Each of these leaves has its own specificities and restrictions under state law.

Leave type

Details

Jury duty leave

Job protection during jury service

Crime victim leave

Allowed to attend court proceedings

Military leave

Available for state military forces members

Voting leave

Work hours scheduled to allow voting

Termination laws

Arkansas is an at-will employment state, meaning that barring any contractual agreements or discriminatory reasons, an employer can terminate an employee at any time without notice. Employees can also terminate their relationship with the employer without prior notice, although it’s customary to provide two weeks’ notice.

Certain regulations apply when an employee is terminated. For instance, an employer must pay final wages by the next regular payday following the termination date. If an employer fails to pay these final wages within seven days of the next regular payday, they could be liable to the employee for double the wages due.

Safety and health

OSHA regulations apply to Arkansas as they do in all other U.S. states. Apart from federal regulations, Arkansas has instituted some legislation to ensure safe, secure workspaces in the state.

The Arkansas Clean Indoor Air Act prohibits smoking in enclosed areas in all places of employment. This includes common work areas, conference rooms, private offices, elevators, hallways, cafeterias, employee lounges, stairs, and restrooms.

Arkansas law also prohibits all drivers from using a handheld wireless communication device to call, text, email, or access the internet while operating a motor vehicle.

Easily onboard employees in Arkansas?

Taxes in Arkansas

In Arkansas, both employers and employees have certain tax obligations under state and federal law. These include Federal and State Taxes, Employment Training Tax, Social Security, and Medicare.

Tax

Who Pays

Rate

Federal income tax

Employee

Varies

Social Security

Employee and employer (6.2% each)

12.4% total on first $160,200 of wages (2023)

Medicare

Employee and employer (1.45% each)

2.9% total, no wage limit

Federal Unemployment Tax (FUTA)

Employer

0.6% on first $7,000 of wages

Arkansas State Income Tax Withholding

Employee

0% – 4.4% based on AR4EC form

Arkansas Unemployment Insurance Tax (SUTA)

Employer

0.225% – 10.125% on first $7,000 of wages (2024)

Arkansas Employment Security Training Tax

Employer

0.10% on first $10,000 of wages

Managing Arkansas employees with an Employer of Record (EOR)

Considering expanding your workforce by hiring employees in Arkansas? You must have a thorough understanding of Arkansas employment laws and HR compliance requirements. To ensure that you remain in compliance with these regulations, consider partnering with Multiplier.

Multiplier is an Employer of Record (EOR) solution that empowers businesses to hire full-time employees in Arkansas without setting up a U.S. entity. The platform takes care of payroll, taxes, contributions, benefits, and ESOP administration, all from a single interface.

And our Global Payroll platform means you can process payroll not only for all your employees, local and international, on time while managing local taxes, contributions, and withholdings.

With Multiplier, you can effortlessly manage legal risks and maintain HR compliance in Arkansas. Book a demo today.

FAQs

Arkansas mandates that employers with four or more employees pay at least $11.00 per hour to each employee. Employers must also pay employees one and one-half times their regular rate for any time worked over 40 hours in a week. Moreover, the state has child labor laws restricting the occupations where minors can work and the number of hours they can work.

In Arkansas, employees must be paid in cash, check, direct deposit, or payroll debit card. Furthermore, the state mandates corporations to pay their workers at least twice a month. The Arkansas health care continuation law also requires employers to offer employees and their dependents continued health care coverage if it ends due to changes in marital status, termination of employment, or group health plan membership.

 

Arkansas has several laws mandating employers to provide time off and leaves of absence. These include jury duty leave, crime victim leave, military leave, voting leave, and organ or bone marrow donation leave.

The Arkansas Clean Indoor Air Act bans smoking in enclosed employer premises. The state also prohibits all drivers from using a handheld wireless communication device while driving. However, employees with concealed handgun licenses can transport or store a legally owned handgun in their vehicle in company parking lots under certain conditions.

Yes, under COBRA, Arkansas requires employers to provide healthcare continuation coverage for employees and their dependents if coverage ends due to changes in marital status, termination of employment, or group health plan membership.

Managing employees in Arkansas?

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