Navigating payroll in Arkansas requires understanding its specific regulations and requirements. This guide provides essential information on state income tax withholding, unemployment insurance, wage and hour laws, and child support withholding.
**State Income Tax Withholding**
The Arkansas Department of Finance and Administration, Revenue Division oversees state income tax collection and reporting. They can be reached at P.O. Box 9941, Little Rock, AR 72203-9941, (501) 682-2212, or through their website: www.state.ar.us/dfa/taxes/wh_tax/index.html.
Arkansas mandates the use of form AR4EC, “Employee’s Withholding Exemption Certificate,” instead of the federal W-4 form for state income tax withholding.
Certain salary reductions, such as those under Section 125 cafeteria plans and 401(k) plans, receive favorable tax treatment in Arkansas. Cafeteria plans are not taxable for income tax or unemployment insurance purposes, and 401(k) deferrals are also exempt from both income tax and unemployment insurance.
Supplemental wages in Arkansas are taxed at a flat rate of 7%.
Employers can file Arkansas State W-2s via magnetic media.
**Unemployment Insurance**
The Arkansas Employment Security Department administers the state’s unemployment insurance program. Contact them at P.O. Box 2981, Little Rock, AR 72203-2981, (501) 682-3274, or visit their website: www.state.ar.us/esd/.
The taxable wage base for unemployment insurance is $10,000 per employee.
Employers with 250 or more employees must report quarterly wages via magnetic media.
Arkansas requires employers to retain unemployment records for at least five years. These records should include employee names, social security numbers, hire/rehire/termination dates, wages by period, pay periods and dates, and termination circumstances.
**Wage and Hour Laws**
The Arkansas Department of Labor enforces state wage and hour laws. They can be reached at 10421 West Markham, Little Rock, AR 72205, (501) 682-4500, or at www.ark.org/labor.
The minimum wage for non-FLSA-covered employers in Arkansas is $5.15 per hour.
Non-FLSA-covered employers must pay overtime at one and a half times the regular rate for hours worked over 40 in a workweek.
Arkansas mandates new hire reporting for all new and rehired employees. Employers must report the following information within 20 days of hire/rehire:
* Employee’s name
* Employee’s address
* Employee’s social security number
* Employer’s name
* Employer’s address
* Employer’s Federal Employer Identification Number (EIN)
This information can be submitted via W-4 or equivalent by mail, fax, or electronically. There is no penalty for late reporting.
The Arkansas New Hire Reporting Center can be reached at (800) 259-2095 or www.ar-newhire.com.
Arkansas prohibits compulsory direct deposit; employees can opt out in writing and request a check.
There are no state laws regarding pay stub information.
Employees must be paid at least semi-monthly, except for FLSA-exempt employees at larger companies earning at least $25,000 annually, who can be paid monthly.
Involuntarily terminated employees must receive their final pay within seven working days. There are no provisions for voluntarily terminated employees.
Unclaimed wages escheat to the state after one year. Employers must maintain records of abandoned wages turned over to the state for five years.
Arkansas law does not address tip credits against the state minimum wage, nor does it mandate rest or meal periods.
Employers must retain wage and hour records for at least three years.
**Child Support Withholding**
The Office of Child Support Enforcement enforces child support orders. Contact them at 400 E. Capitol, P.O. Box 8133, Little Rock, AR 72203, (501) 682-8398, or www.accessarkansas.org/dfa/childsupport/employer.html.
Key provisions for child support deductions include:
* Start withholding 14 days after the order is mailed.
* Send payment on payday.
* Send termination notice immediately.
* Maximum administrative fee: $2.50 per pay period.
* Withholding limits: Federal rules under the CCPA apply.
**Disclaimer:** This information is for general guidance only and may not reflect the most current changes in Arkansas payroll law. Always consult official sources for the most up-to-date regulations.