State Labor Law Guide

Arkansas
Labor Laws

What workers in Arkansas need to know about minimum wage, overtime, tipped employee rights, and what to do when an employer has not paid them fairly.

AR ARKANSAS
$11.00
Minimum Wage
$16.50
Overtime Rate
$2.63
Tipped Min. Wage
2-3 YRS
Claim Deadline
STATE
Governing Law

Minimum Wage $11.00 / HR

Arkansas voters passed a minimum wage increase in 2018, raising the state rate in steps to $11.00 per hour, effective January 1, 2021. This is higher than the federal minimum of $7.25 and is the rate your employer must use. The Arkansas Minimum Wage Act applies to employers with four or more employees. If your employer has four or more workers, they are covered by state law and must pay at least $11.00 per hour for every hour you work.

Tipped employees must receive a minimum cash wage of $2.63 per hour from the employer. The employer may claim a tip credit of up to $3.62 per hour, but your total of cash wages and tips must reach at least $11.00 per hour. If it does not, the employer must make up the shortfall. It is the employer's responsibility to keep accurate tip records. If your employer is claiming a tip credit but failing to pay the difference when tips fall short, that is a wage violation.

Smaller Employers: If your employer has fewer than four employees in any given workweek, the state Act may not cover you, but the federal FLSA may still apply. If you are unsure which law covers your situation, reach out for a review.

Overtime & Wage Deductions 1.5X RATE

Arkansas follows the federal overtime standard: 1.5 times your regular rate for all hours worked past 40 in a workweek. At $11.00 per hour, overtime is $16.50. There is no daily overtime trigger in Arkansas. Overtime is calculated on the full workweek total. Private employers cannot substitute comp time for overtime pay. Only public agencies are permitted to use compensatory time off in lieu of overtime wages.

Arkansas law also limits what an employer can deduct from your wages. Your employer cannot make deductions that bring your pay below the applicable minimum wage for items such as spoilage or breakage, cash or inventory shortages, or fines and penalties for lateness, misconduct, or quitting without notice. Deductions beyond required taxes and court-ordered withholdings require written employee authorization. If your employer has been charging you for these items or making unauthorized deductions, those amounts may be recoverable.

A salary does not automatically exempt you from overtime. Title and pay structure alone do not determine exempt status. The actual duties you perform must genuinely qualify for an executive, administrative, or professional exemption. Many workers in Arkansas are misclassified as exempt when their real day-to-day work does not meet that standard.

Off the Clock Time: Time your employer knew you were working is compensable regardless of whether it was recorded. Work performed before clocking in, after clocking out, or during an interrupted break counts toward your 40-hour weekly total.

Employee Misclassification 20-FACTOR TEST

The Arkansas Minimum Wage Rules set out a detailed 20-factor test for determining whether a worker is an employee or an independent contractor. The factors examine who controls the work, who sets the schedule, whether the worker performs services exclusively for one employer, who supplies tools and equipment, whether a continuing relationship exists, and whether the worker can profit or suffer a loss from the relationship independently. No single factor is controlling, but the more of these factors point toward employer control, the more likely the worker is an employee under Arkansas law.

A 1099 form or a contract calling you a contractor does not settle the question. If the real working relationship shows that your employer directs and controls your work, the law may treat you as an employee entitled to minimum wage and overtime regardless of how you were classified on paper. Misclassified workers in Arkansas may be owed back overtime for every week they worked past 40 hours without receiving time and a half.

Construction, Transportation, and Agriculture: These industries in Arkansas have high rates of misclassification. If you work primarily for one company, use their equipment, and follow their instructions, the 20-factor analysis may support employee status even if you signed a contractor agreement.

Filing a Claim ACT NOW

The Arkansas Division of Labor can assess civil money penalties within two years of a violation, and employers must maintain payroll records for at least three years. FLSA claims in federal court carry a two-year window, extended to three years for willful violations. Every week of underpayment has its own deadline running from the date it occurred. Waiting longer reduces the total you can recover.

For willful violations of the Arkansas Minimum Wage Act, the Division can assess liquidated damages up to the full amount of unpaid back wages. That means a willful underpayment of $5,000 can result in up to $10,000 in total recovery. Retaliation against an employee for filing a complaint or cooperating with an investigation is itself a civil violation under the Act, subject to separate penalties.

Gather What You Have: Pay stubs, timesheets, contracts, and any communications about your hours or pay all strengthen your claim. Even partial records help. Reach out today for a no-cost review of your situation.

The information on this page is provided for general informational purposes only and does not constitute legal advice. Labor laws change, and the specific facts of your situation may affect how the law applies to you. Rates, thresholds, and deadlines referenced here reflect the law as sourced and may have been updated since publication. Always verify current requirements with a qualified employment attorney before taking action.

Think You May Be Owed Back Wages?

Josephson Dunlap reviews wage claims for Arkansas workers at no cost. There is no fee unless wages are recovered. A case manager will go through your situation and tell you where you stand.