Payroll and Benefits Guide - United States - Arkansas

United States - Arkansas
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Currency

United States Dollar (USD)

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Capital

Little Rock
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Employer Taxes

11.65% – 30.95%
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Date Format

mm/dd/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

The capital city of Arkansas is Little Rock, which is also the largest city in the state.

Arkansas is known as the “Natural State”.

The state bird of Arkansas is the mockingbird.

The town of Eureka Springs in Arkansas is known for its Victorian architecture.

Arkansas is home to the Ozark Mountains in the northwestern part of the state.

The state’s official tree is the pine tree.

United-States-Arkansas

Contributions

Employee Payroll Tax

Contribution TypeRate
FICA Social Security6.20%
FICA Medicare1.45%
Additional tax on earnings over 200,000 USD (High-income earners also pay an additional 0.9 percent in Medicare taxes)0.90%

Employer Payroll Tax

Contribution TypeRate
Unemployment Insurance0.30% – 14.20%
Unemployment- New Employer3.10%
FICA Social Security6.20%
FICA Medicare1.45%
FUTA (Federal Unemployment Tax Act)0.60% -6.00%

Payroll

Payroll Cycle

Employees are paid monthly or semi-monthly.

13th Salary

There are no legal provisions regarding 13th salaries.

Work Hours and Week

The workweek has a maximum of 40 hours per week, 8 hours per day.

Overtime

Arkansas adheres to the Fair Labour Standards Act (FLSA), and work in excess of 40 hours per week is considered overtime and paid at the rate of 150% of the regular pay. If employees are scheduled to work on weekends or rest days, no additional payment is required. However, should an employer request an employee to work in exceptional circumstances on these days, then overtime is paid at the rate of 150% of the regular pay.

United-States-Arkansas

Leave

Paid Time Off

Arkansas does not have any state laws that govern paid time off. However, it is common for employers to decide whether to offer paid or unpaid vacation leave. This must comply with employment law and must be stipulated in the collective bargaining agreements.

Public Holidays

There are 12 public holidays in Arkansas. Public holidays are not mandatory as paid days off, however, it is very common to allow workers to take federal holidays as paid days off.

Sick Days

It is common for an employer to follow the Family and Medical Leave Act (FMLA) which provides certain employees with up to 12 weeks of unpaid, job-protected leave per year for certain family and medical reasons (maternity leave, serious illnesses, or if the employee needs to care for a spouse or child).

Employees are eligible for FMLA if they have worked for their employer for at least one year, completed a minimum of 1,250 hours over the past year, and worked at a location where the company employs 50 or more employees within 75 miles.

FMLA eligible employees are entitled to:

  • 12 working weeks of leave in any one year for a child’s birth and to care for the newborn child within one year of birth.
  • Leave for the adoption or foster care of a child and care for the newly placed child within one year of placement.
  • Care for the employee’s spouse, child, or parent who has a severe health condition.
  • Leave in the event of a serious health condition that makes the employee unable to perform the essential functions of their job.
  • Any qualifying exigency arising out of the fact that the employee’s spouse, son, daughter, or parent is a covered military member on “covered active duty.”

Or

  • 26 working weeks of leave during a single one-year period to care for a covered service member with a serious injury or illness if the eligible employee is the service member’s spouse, son, daughter, parent, or next of kin (military caregiver leave).

In addition to FMLA, Arkansas also has The Arkansas Civil Rights Act, which prohibits employers from discriminating based on gender, including pregnancy, childbirth, and related medical conditions. Under this act, employers must ensure that their policies do not negatively impact one sex more than another. Employees who are affected by pregnancy are treated the same as employees with disabilities. The act covers employers with nine or more employees.

Arkansas also has The Adoptive Parent Leave, which means an employer that permits maternity leave or paternity leave to an employee who is a biological parent after the birth of a child must also permit maternity or paternity leave for an adoptive parent upon placement of an adoptive child in the adoptive parent’s home if requested by the adoptive parent. The employee may also be entitled to other benefits provided by an employer, such as job protection or pay guarantee.

The law only applies to the adoption of a person under 18 years of age.

Maternity Leave

Maternity leave falls under FMLA, The Arkansas Civil Rights Act, and The Adoptive Parent Leave (see Sick Leave).

Paternity Leave

Paternity leave falls under FMLA, The Arkansas Civil Rights Act, and The Adoptive Parent Leave (see Sick Leave).

Parental Leave

Parental leave falls under FMLA, The Arkansas Civil Rights Act, and The Adoptive Parent Leave (see Sick Leave).

Termination

Termination Process

Except in mass dismissals or as provided for in an employment contract or a collective bargaining agreement, U.S. law does not impose a formal notice period to terminate an individual employment relationship, and employment is stipulated “at will.”

This means that either the employer or the employee may end the employment relationship without giving either notice or reason, provided it is not illegal, notable discrimination on the grounds of a category protected by law, etc., and as per the Federal Worker Adjustment and Retraining Notification Act (WARN).

The employment contracts of executives and other highly skilled individuals often incorporate a “just cause termination” clause which mandates that the employer may only terminate the employee for “cause” and lists the permissible grounds. In such cases, the parties negotiate the foundations for a “just cause” termination.

Notice Period

In Arkansas, most employees are employed “at-will,” and either party can terminate the employment relationship without notice.

In Arkansas, payout of unused vacation time is not required by law, however, employers will generally pay an employee for unused vacation days provided the employee gives some advanced notice of resignation. While there is no notice period, general practice is 2 weeks.

In mass dismissal cases, the Worker Adjustment and Retraining Notification Act (WARN Act) must be followed, and employers must give 60 days’ notice to impacted employees.

Severance Pay

Except as otherwise provided in an employment contract or collective bargaining agreement, employers are not required to pay severance. However, many employers choose to offer severance pay based on the length of employment.

Probation Period

Probation Period

There are no provisions in the law regarding probation or trial periods. However, it is common practice for employers to set a performance evaluation after an initially stated period of employment of 90 days.

Immigration

Foreign nationals without permanent resident status or a work visa are not permitted to work in the United States. An employer seeking to hire a foreign national may file a petition with the United States Department of Homeland Security or the United States Citizenship and Immigration Services (USCIS) for an employment visa on behalf of the prospective employee.

If the petition is approved, the prospective employee must obtain a visa stamp from a United States embassy or consulate (Canadian citizens are exempt from this requirement). To get a temporary U.S. work visa, an employer must file a petition with U.S. Citizenship and Immigration Services (USCIS). An approved petition must be part of the visa request.

VAT

Arkansas has a minimum combined sales tax rate of 10.50% (state tax is 6.50% and local tax is 4.01%).