Hiring Employees in Arkansas

Classifying Your Workers Correctly

Your company must distinguish properly between employees and independent contractors under IRS common law tests and Arkansas wage laws. You should review behavioral control, financial control, and the overall relationship to decide if a worker is truly independent or should be on payroll.

Arkansas follows federal rules for exempt vs nonexempt status, so you must check salary level, salary basis, and duties tests before treating someone as overtime exempt. Misclassification can trigger back wages, unpaid overtime, tax assessments, interest, and penalties, so you should document your analysis and revisit it when roles change.

• Use written contracts that reflect actual working conditions, not just labels.

• Review the Playroll misclassification guide – https://www.playroll.com/blog/employee-misclassification-guide – before engaging contractors.

• Coordinate with your tax advisor to align Arkansas and federal reporting for each worker type.

Verify Employee Work Eligibility

For every new Arkansas hire, you must complete federal Form I‑9 within 3 business days of the employee’s start date. You must physically or remotely inspect acceptable identity and work authorization documents from the employee’s List A, or a combination of Lists B and C.

Arkansas does not mandate E‑Verify statewide, but certain federal contractors and some public entities may be required to use it, so you should confirm whether your contracts trigger this obligation. You must retain I‑9s for at least 3 years after the hire date or 1 year after termination, whichever is later, and store them separately from general personnel files for easier audits.

Create an Employee Onboarding Process

When you hire in Arkansas, you should issue a clear written offer letter outlining pay rate, pay schedule, classification, and at‑will status. At or before the first day, you’ll need to collect Form W‑4, any Arkansas state withholding form if used, direct deposit authorization if applicable, and signed acknowledgments for your handbook and key policies.

Your company must also provide required notices, such as workers’ compensation information and unemployment insurance rights, and report new hires to the Arkansas New Hire Reporting Center within 20 days. Building a standardized onboarding checklist helps you stay compliant and gives you better visibility into total hiring costs per Arkansas employee.

Pay Frequency & Methods

Arkansas law requires you to pay employees at least semi‑monthly, with no more than 16 days between regular paydays, unless you have a written agreement for a different schedule that still complies. If an employee is terminated, you must pay all wages due by the next regular payday, and late or unpaid wages can lead to wage claims, civil penalties, and potential attorney’s fees.

Payment Methods (How You Can Pay)

In Arkansas, you can choose among several payment methods, but you must always ensure employees receive full, timely wages and a clear wage statement showing hours, rates, and deductions.

• Payroll Check: You may pay employees by paper check – it must be payable at full face value and reasonably accessible without fees.
• Cash: You can pay wages in cash, but you must keep accurate records and provide a written wage statement each pay period.
• Direct Deposit (EFT): You may use direct deposit if you obtain the employee’s voluntary written consent and offer an alternative for those who opt out.
• Paycards: You can pay by payroll card if employees can access their full wages at least once per pay period fee‑free and you disclose terms clearly.
• Outsourced Payroll: You may outsource payroll to a third‑party provider, but your company remains responsible for compliance with Arkansas wage and tax laws.

When choosing a payment method, you should consider employees’ access to banking, potential fees, and how easily you can correct errors or provide final pay after separation.

When you hire employees in Arkansas, you must withhold and remit federal and state payroll taxes and pay several employer‑only contributions. You’ll need to register with both the Arkansas Department of Finance and Administration and the Division of Workforce Services before running payroll.

Employer Tax Contributions

Your company is responsible for employer‑side FICA, federal unemployment tax, Arkansas unemployment insurance, and any local obligations that may apply. You must file returns and pay on the schedules assigned by each agency, which are often quarterly for state unemployment and monthly or semi‑weekly for withholding.

Employee Payroll Tax Contributions

You must withhold federal income tax, employee FICA, and Arkansas state income tax from employee wages, then remit them on time. Employees complete Form W‑4 and any state withholding form you use so you can calculate the correct amounts.

Minimum Wage in Arkansas

Most Arkansas employers must pay at least $11.00 per hour, which is higher than the federal minimum wage. Certain small employers with fewer than 4 employees and some exempt occupations may not be covered, so you should confirm coverage before paying less than the state rate.

Working Hours in Arkansas

Arkansas generally follows federal rules for hours worked, requiring you to pay for all hours an employee is suffered or permitted to work, including certain training and on‑call time. The state does not mandate daily rest or meal breaks for most adults, but if you provide breaks, very short breaks of 20 minutes or less must be paid.

Overtime in Arkansas

Arkansas relies on the Fair Labor Standards Act for overtime, so nonexempt employees must receive at least 1.5 times their regular rate for hours worked over 40 in a workweek. You should define your fixed workweek in writing and track all hours accurately to avoid underpayment claims and potential liquidated damages.

In Arkansas, you must comply with federal benefit laws such as the Affordable Care Act, COBRA, and ERISA when they apply to your company size. Beyond legal minimums, offering competitive health coverage, retirement plans, and paid leave can help you attract and retain talent in a relatively low‑cost labor market.

Mandatory Leave Policies in Arkansas

Paid Time Off in Arkansas

Arkansas does not require private employers to provide paid vacation or general PTO, so you can design your own policy. Once you offer PTO, you should put the rules in writing, including accrual rates, carryover limits, and whether unused time is paid out at termination.

State law does not mandate payout of unused vacation, but Arkansas courts may enforce your written policy, so you should follow it consistently. Clear PTO tracking in your payroll system helps you control costs and avoid disputes about balances when employees leave.

Maternity & Paternity Leave in Arkansas

Arkansas does not have a separate state parental leave program, so most maternity and paternity leave obligations come from the federal FMLA and pregnancy‑related protections. If you have 50 or more employees, eligible workers may take up to 12 weeks of unpaid, job‑protected leave for birth, adoption, or foster placement.

You should also consider how your short‑term disability, PTO, or parental leave policies can provide income replacement during this time. Make sure your policies apply equally to mothers and fathers to avoid discrimination issues and to support a consistent employee experience.

Sick Leave in Arkansas

There is no statewide requirement for private employers to provide paid sick leave in Arkansas. However, many employers choose to offer a sick bank or combined PTO to remain competitive and reduce presenteeism.

If you offer sick leave, you should define eligible uses, documentation requirements, and whether time can be used for family members’ illnesses. Be sure your policy coordinates with federal FMLA and any disability accommodations you may need to provide under the ADA.

Military Leave in Arkansas

Your company must comply with USERRA, which applies in Arkansas and protects employees who leave work for active duty, training, or National Guard service. You must restore returning service members to the same or an equivalent position with the same seniority, status, and benefits, subject to eligibility rules.

Arkansas law also supports leave for certain state military duties, so you should track orders and keep communication with affected employees documented. While pay during military leave is not generally required, many employers voluntarily offer differential pay to remain competitive.

Jury Duty in Arkansas

Arkansas employers must allow employees time off to serve on a jury and may not discharge or discipline them for complying with a summons. State law does not require you to pay employees for this time, but you must allow them to keep any juror fees they receive.

You should outline in your handbook whether jury duty time is paid or unpaid and whether employees may use PTO to cover lost wages. Always request a copy of the summons or proof of service for your records and to support scheduling adjustments.

Voting Leave in Arkansas

Arkansas law does not impose a specific paid voting leave requirement for private employers, but you should still allow reasonable time for employees to vote if their schedules make it difficult. Many companies in the state either provide flexible scheduling on election days or allow employees to use PTO for this purpose.

Including a short voting leave statement in your handbook helps set expectations and supports your broader culture and compliance posture. Be sure to apply any voting‑related flexibility consistently to avoid claims of unfair treatment.

Bereavement Leave in Arkansas

Arkansas does not require private employers to provide bereavement leave, paid or unpaid. However, many employers offer 1–5 days of leave for the death of an immediate family member as part of a competitive benefits package.

If you choose to offer bereavement leave, you should define who qualifies as “family,” how much time is available, and whether the leave is paid. Clear rules and manager training will help ensure the policy is applied consistently during emotionally difficult situations.

Termination Process

Arkansas is an at‑will employment state, so you can generally terminate employment at any time for any lawful reason, provided you do not violate discrimination, retaliation, or contract laws. You should document performance issues, follow your internal disciplinary steps, and collect company property at separation to reduce risk.

Notice Period

Arkansas law does not require employers or employees to give advance notice before ending employment, unless a contract or collective bargaining agreement says otherwise. Even without a legal requirement, you may want to encourage notice in your policies to support smoother transitions and knowledge transfer.

Severance

Severance pay is not required under Arkansas law, but you may choose to offer it in certain situations, often in exchange for a signed release of claims drafted by counsel. If you adopt a severance plan or standard formula, apply it consistently and ensure payments are processed through payroll with proper tax withholding.