Arkansas Handbook Requirements (2026)

The federal FLSA uses an enterprise coverage test ($500,000 in annual gross revenue) and an individual coverage test (interstate commerce) to determine which employers owe overtime. Arkansas takes a simpler approach: under Ark. Code 11-4-211, any employer with 4 or more employees must pay overtime at 1.5 times the regular rate for hours worked over 40 in a workweek.

That 4-employee threshold is one of the lowest in the country. A small retail shop, a local restaurant, or a family business with just four people on the payroll is covered. Many employers in this size range assume the FLSA is the only overtime framework and conclude they are exempt because their revenue is below $500,000 or their employees do not engage in interstate commerce. Under Arkansas law, that does not matter. Four employees is the trigger.

The exposure for getting this wrong is real. Employees can file a wage claim with the Arkansas Department of Labor and Licensing or bring a private lawsuit. Remedies include all unpaid overtime, plus the employer may be liable for additional damages. In a small business where one or two employees regularly work 45 to 50 hours per week, a two-year back pay claim can reach five figures quickly.

The fix: If you have 4 or more employees in Arkansas, treat overtime as mandatory. Track hours for all non-exempt employees. Do not assume the FLSA enterprise test is the only standard that applies. Review your exemption classifications against both federal and state criteria.

Sources: Ark. Code 11-4-211 (overtime), Arkansas Department of Labor and Licensing; Arkansas Minimum Wage Act (Ark. Code 11-4-201 et seq.).

The Arkansas Medical Marijuana Amendment and Act 593 (2017) created employment protections for qualifying medical marijuana patients that many employers still do not fully understand. Under this framework, employers with 9 or more employees cannot discriminate against applicants or employees based on their status as a medical marijuana patient or caregiver.

This means you cannot:

• Refuse to hire someone solely because they hold a medical marijuana card
• Terminate an employee solely for their status as a qualifying patient
• Penalize an employee for past medical marijuana use

But employers retain significant rights too. You can still:

• Enforce a drug-free workplace policy for on-site use and impairment
• Designate positions as "safety-sensitive" under Act 593. Employees in safety-sensitive roles who are current medical marijuana users can be reassigned, placed on leave, or terminated
• Discipline employees who possess or use medical marijuana during work hours or on employer premises
• Conduct drug testing (though a positive test alone, without evidence of impairment or on-site use, may not be sufficient grounds for termination of non-safety-sensitive employees)

The "safety-sensitive" designation is the key employer protection. Act 593 allows employers to identify positions where impairment could endanger the employee or others, including roles involving driving, operating heavy machinery, or caring for vulnerable populations. If you have not designated your safety-sensitive positions in writing, you lose this protection.

The fix: Review your job descriptions and formally designate safety-sensitive positions in writing. Update your drug and alcohol policy to distinguish between off-duty patient status (protected) and on-site use or impairment (not protected). Train managers that a medical marijuana card alone is not grounds for adverse action.

Sources: Act 593 of 2017; Arkansas Medical Marijuana Amendment (Amendment 98, 2016); Wright Lindsey Jennings employer guidance.

Under Ark. Code 11-4-405, employers must pay all wages due to a separated employee by the next regular payday following the date of separation. This applies to both terminations and resignations.

The penalty for missing this deadline is severe. If wages remain unpaid for more than 7 days after they become due, the employer may be liable for double the amount of wages owed as liquidated damages under Ark. Code 11-4-407. This is not discretionary. The statute provides for the doubled amount automatically when the employer's failure to pay is found to be willful.

Here is how the math works in practice: an employee earning $4,000 in their final paycheck whose wages are 10 days late faces a potential liability of $8,000 (the original $4,000 plus $4,000 in liquidated damages), plus the employee's reasonable attorney fees. For a small business, a single late final paycheck can cost more than a month of the employee's salary.

"Willful" in this context does not require malice. It means the employer knew wages were due and failed to pay them. "We forgot" or "payroll was backed up" satisfies the willfulness standard in most cases.

The Arkansas Department of Labor and Licensing processes wage claims and can order payment. Employees also have a private right of action in court.

The fix: Process final paychecks by the next regular payday, without exception. Build a termination checklist that flags the deadline. If an employee leaves mid-pay-period, calculate and prepare the final check before the next payday arrives. The 7-day grace period after the deadline is not a buffer. It is the trigger for doubled damages.

Sources: Ark. Code 11-4-405 (final pay timing), Ark. Code 11-4-407 (liquidated damages); Arkansas Department of Labor and Licensing; Arkansas Wage Payment Act (Ark. Code 11-4-401 et seq.).

Arkansas's minimum wage of $11.00 per hour under Ark. Code 11-4-210 is the result of a 2018 ballot initiative (Issue 5) that voters approved with 68% of the vote. The phased increase reached $11.00 on January 1, 2021, and has remained there since.

Because this rate was set by voter initiative rather than legislative action, it has a different political dynamic than most state minimum wages. Reducing it would require another ballot measure or a constitutional amendment. Employers should not expect the rate to decrease.

The $11.00 rate applies to employers with 4 or more employees. Smaller employers (fewer than 4 employees) are not covered by the state minimum wage law and default to the federal $7.25 floor. Tipped employees may be paid a cash wage of $2.63 per hour, provided that tips bring total compensation to at least $11.00 per hour.

Common mistakes:

• Failing to track tips accurately: If a tipped employee's total compensation (cash wage plus tips) falls below $11.00/hour in any workweek, the employer must make up the difference. This requires per-workweek tracking, not monthly averages.
• Misclassifying exempt employees: The state's higher minimum wage does not change the federal exempt salary threshold ($684/week), but it does raise the effective floor for non-exempt hourly workers. Make sure your pay structure accounts for the state rate.

The fix: Verify all non-exempt employees are paid at least $11.00/hour. Track tipped employee compensation weekly. If you have seasonal or part-time workers, confirm they are also paid at the state rate, not the federal floor.

Sources: Ark. Code 11-4-210 (minimum wage); Issue 5 (2018 ballot initiative); Arkansas Department of Labor and Licensing.