Arkansas Wage and Hour Law
Dolley Law has extensive knowledge and experience in wage and hour law. We have represented clients across the country, including in Arkansas, in connection with these matters. Contact us if you are seeking legal representation in connection with a wage and hour matter.
Arkansas Overtime Law
Chapter 4 of Title 11 of Arkansas’s Code sets forth its wage and hour laws. These laws address rules and issues related to, among other things, minimum wage, overtime, wage discrimination, wage payments, and wage disputes. The state requirements for minimum wage and overtime apply to employers with more than four employees. Ark. Code Ann. § 11-4-203(4)(b).
In general, Arkansas law tracks the Fair Labor Standards Act (“FLSA”) regarding the rules and requirements for paying overtime compensation. Ark. Code Ann. § 11-4-218(f). Within any given workweek, if an employee works over 40 hours, an employer must pay the employee an overtime premium of one-and-one-half times the employee’s regular rate for each hour worked over 40 hours. Ark. Code Ann. § 11-4-211(a). Like the FLSA, it is acceptable under Arkansas law to provide certain emergency personnel and other public employees compensatory time off at an overtime rate in lieu of payment of overtime wages Ark. Code Ann. § 11-4-211(f).
Similarly, Arkansas law provides that employees are exempt from overtime if they are exempt from overtime under the FLSA. See Ark. Code Ann. § 11-4-211(d). However, through its particular definition of “employee,” Arkansas law effectively exempts certain persons from its overtime rules, such as “any individual employed by the United States” and “any student performing services for any school, college, or university in which he or she is enrolled and is regularly attending classes.” Ark. Code Ann. § 11-4-203.
Arkansas Minimum Wage Law
Arkansas has a higher minimum wage than the federal standard. As of January 2020, Arkansas’ minimum wage is $10 per hour, which is higher than the FLSA minimum wage rate of $7.25 per hour. Ark. Code Ann. § 11-4-2109(a)(3); 29 U.S.C. § 206. Because Arkansas has limited the definition of who is an “employer,” employers with four employees or less are only obligated to comply with the federal standard. Ark. Code Ann. §§ 11-4-210, 11-4-203(4). See 29 U.S.C. § 206.
In 2018, Arkansas amended the minimum wage statute to increase gradually over time. Ark. Code Ann. § 11- 4-210. The minimum wage increased in January 2019 to $9.25 per hour, then again in January 2020 to the current rate. Ark. Code Ann. § 11-4-210(a)(3). On January 1, 2021, it will increase to $11 per hour. Id.
Both Arkansas and federal law, however, allow employers to pay employees an hourly rate less than the applicable minimum wage rate where the employee earns sufficient money through tips to maintain an average hourly rate above the minimum wage for each workweek. Ark. Code Ann. § 11-4-212; 29 C.F.R. § 516.28. Nonetheless, this special rate for tipped employees is higher under Arkansas law than under federal law. Id. The FLSA sets the minimum hourly rate for tipped employees at $2.13 per hour, but Arkansas wage and hour law requires tipped employees to be paid $2.63 per hour. Id.
Classification of Employees
Classification of employees as either an employee or independent contractor is critical for determining if they are protected under the FLSA. The test for determining employment status in Arkansas varies slightly from the FLSA. Ark. Code Ann. § 11-1-204. The “economic realities” test applies to classification questions in FLSA cases, and this test looks at the totality of the circumstances, beyond the more technical distinctions of the employer/employee relationship. Goldberg v. Whitaker House Co-op., Inc., 81 U.S. 933, 936 (1961). This test considers “degrees of control, opportunities for profit or loss, investment in facilities, permanency of relation or skill required … no one is controlling nor is the list complete.” Karlson v. Action Process Service & Private Investigations, LLC, 860 F.3d 1089, 1092 (8th Cir. 2017).
Like the FLSA, determining independent contractor status in Arkansas is dependent upon the specific facts of each case. Kistner v. Cupples, 372 S.W.3d 339, 343 (Ark. 2010); Alexander v. Avera St. Luke’s Hosp., 768 F.3d 756, 761 (8th Cir. 2014). However, Arkansas recently codified a 20-part test, which outlines more concrete criteria for what should be considered when determining this classification. See Ark. Code Ann. §§ 11-4-103, 11-1-204. The two tests consider very similar factors, except the 20-factor test does not consider the “degree of skill” of the worker like the economic realities test of the FLSA. See Craig v. FedEx Ground Package System, Inc., 300 Kan. 788, 796 (Kan. 2017).
Potential Liabilities for Wage and Hour Violations
Like violation(s) of the FLSA, violation(s) of Arkansas wage and hour laws can subject an employer to potential liabilities in the form of unpaid wages, liquidated damages, civil penalties, and reasonable attorney fees. Ark. Code Ann. § 11-4-218(a).
However, some Arkansas rules applicable to liquidated damages awards are different than the FLSA. For example, under the FLSA, it is the norm for liquidated damages to be awarded to an employee who proves overtime or minimum wage violations, unless the employer can make a substantial showing that it took subjectively and objectively reasonable steps to understand and follow the FLSA in good faith. See 29 U.S.C. §216(b); Chao v. Barbecue Ventures, LCC, 547 F.3d 938, 941 (8th Cir. 2008). Under the FLSA, the employer bears a high burden of showing good faith as a defense to liquidated damages. Id. at 941-42.
However, under Arkansas wage and hour law, the employee bears the burden of proof on liquidated damages. See Ark. Code Ann. § 11-4-218(a)(2). In 2019, Arkansas state law pertaining to liquidated damages was amended to include the language “if the employee proves the violation was willful,” which has the effect of shifting the burden to the employee to demonstrate willfulness in order to hold the employer liable for liquidated damages. Prior to the recent amendment, the FLSA and Arkansas law were substantially the same regarding application of liquidated damages. Fochtman v. DARP, Inc. 418 F. Supp. 3d 329, 330 (W.D. Ark. 2019).
The statute of limitations on causes of action arising under Kansas wage and hour law is two years, which is consistent with the FLSA. Ark. Code Ann. § 11-4-218(g); 29 U.S.C. § 255(a). A finding of willfulness under the FLSA extends the statute of limitations to three years. See id. However, some courts have found willfulness has no relevance under the Arkansas statute and that state wage and hour claims under Arkansas law will always have a two-year statute of limitations. See Browne v. P.A.M. Transport, Inc., No. 5:16-CV-05366, 2020 WL 265296, at *8 n. 10 (W.D. Ark. 2020).
These liabilities can be avoided with proactive effort and careful compliance with state and federal wage and hour laws, which is why it is important for both employers and employees to fully understand their legal rights and obligations.
Our Firm has represented clients in FLSA and wage and hour cases throughout the United States, including in Arkansas. If you are in or around Springdale, Conway, Fayetteville, Fort Smith, Pine Bluff, Jonesboro, Little Rock, North Little Rock or Rogers, reach out to our firm to see if we can help answer any questions you may have regarding compliance with state and federal wage and hour laws and regulations, prevailing wage laws, recordkeeping requirements, and exemptions to wage and hour requirements. Our attorneys can be contacted at 314-645-4100 or by email at firstname.lastname@example.org.