Navigating payroll in Arkansas requires understanding its specific regulations and requirements. This guide provides essential information on tax withholding, unemployment insurance, wage and hour laws, and child support withholding in the state.
**Arkansas Income Tax Withholding**
The Arkansas Department of Finance and Administration, Revenue Division, oversees state income tax collection and reporting. They can be contacted at P.O. Box 9941, Little Rock, AR 72203-9941, (501) 682-2212, or online at 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.
Unlike some states, Arkansas provides tax advantages for certain employee benefit plans. Salary reductions under Section 125 cafeteria plans and 401(k) plans are exempt from both income tax and unemployment insurance calculations.
Supplemental wages in Arkansas are taxed at a flat rate of 7%.
Employers have the option to file Arkansas State W-2s via magnetic media.
**Arkansas Unemployment Insurance**
The Arkansas Employment Security Department administers unemployment insurance. They can be reached at P.O. Box 2981, Little Rock, AR 72203-2981, (501) 682-3274, or at www.state.ar.us/esd/.
The taxable wage base for unemployment insurance is $10,000.00.
Employers with 250 or more employees must report quarterly wages via magnetic media.
Arkansas requires employers to retain unemployment records for a minimum of five years. These records should include employee names, social security numbers, hire/rehire/termination dates, wages by period, payroll periods/dates, and termination details.
**Arkansas Wage and Hour Laws**
The Arkansas Department of Labor enforces state wage and hour laws. Contact them at 10421 West Markham, Little Rock, AR 72205, (501) 682-4500, or www.ark.org/labor.
The minimum wage for employers not covered by the Fair Labor Standards Act (FLSA) is $5.15 per hour.
For non-FLSA-covered employers, overtime is paid at one and a half times the regular rate for hours worked beyond 40 in a week.
**Arkansas New Hire Reporting**
Employers must report all new hires and rehires within 20 days. Required information includes:
* Employee’s name
* Employee’s address
* Employee’s social security number
* Employer’s name
* Employer’s address
* Employer’s Federal Employer Identification Number (EIN)
Reports can be submitted via mail, fax, or electronically using a W-4 or equivalent. There is no penalty for late reporting.
The Arkansas new hire reporting agency can be contacted at 800-259-2095 or www.ar-newhire.com.
**Other Arkansas Payroll Regulations**
Arkansas does not mandate direct deposit; employees can opt to receive a physical check.
State law does not specify required information on pay stubs.
Employees must be paid at least semi-monthly. FLSA-exempt employees at larger companies earning at least $25,000 annually can be paid monthly.
Involuntarily terminated employees must receive their final pay within 7 working days. There are no specific provisions for voluntarily terminated employees.
Unclaimed wages must be turned over to the state after one year, and employers must maintain records of these wages for five years.
Arkansas law does not address tip credits against the state minimum wage or required rest/meal periods.
Wage and hour records must be retained for at least three years.
**Arkansas Child Support Withholding**
The Office of Child Support Enforcement manages child support orders and laws. They can be contacted at 400 E. Capitol, P.O. Box 8133, Little Rock, AR 72203, (501) 682-8398, or at www.accessarkansas.org/dfa/childsupport/employer.html.
Key provisions for child support deductions:
* Start withholding: 14 days after order is mailed
* Send payment: Payday
* Send termination notice: Immediately
* Maximum administrative fee: $2.50 per pay period
* Withholding limits: Federal rules under the Consumer Credit Protection Act (CCPA)
**Disclaimer:** This information is for general guidance only and is not a substitute for professional legal or financial advice. Payroll laws are subject to change; always consult official sources for the most up-to-date information.