Arkansas Overtime Laws

September 14th 2024

Arkansas Labor Law includes regulations governing overtime pay to ensure fair compensation for employees. Non-exempt workers are entitled to receive one and one-half times their regular hourly wage for each hour worked beyond 40 hours in a workweek. 

This article will provide information to successfully navigate Arkansas’ overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.

This article covers:

Arkansas Overtime Rates

Overtime law in Arkansas is designed to prevent employees from being exploited by their employers. Employees who work over 40 hours per week are entitled to overtime pay at time-and-a-half (1.5) for every additional hour worked. 

Since the regular minimum wage in Arkansas is $11 per hour, this means Arkansas’ overtime minimum rate is $16.50 per hour. 

Overtime Entitlement in Arkansas

According to Arkansas overtime laws, overtime pay is required for non-exempt employees.

Employees who earn below $844 a week ($43,888 annually) and work in a non-exempt industry are entitled to overtime pay.

However, your overall eligibility for overtime pay will be based on what your job duties are as well as what type of business you are in.

Read more about Overtime Exceptions and Exemptions in Arkansas.

Compensatory Time in Arkansas

In Arkansas, only public employers are allowed to offer compensatory time (“comp time”) to their non-exempt employees for their overtime hours worked. Employees who perform overtime work will accumulate comp time at a rate of one and a half times the number of hours worked. 

There are two categories of non-exempt employees: 

  • Those with a regular 40-hour workweek
  • Those who follow pre-established work periods ranging from 7 to 28 days (Seasonal, fire protection, and law enforcement roles)

When a public agency chooses to provide comp time instead of cash payment for overtime, the following guidelines apply:

  • Seasonal employees are limited to a maximum accrual of 240 hours of compensatory time off.
  • Fire protection and law enforcement employees are limited to a maximum accrual of 480 hours of compensatory time off.

If an employee in either category exceeds the maximum accrual limit, they must be compensated in cash payment for any overtime hours.

Overtime for Tipped Employees in Arkansas

The overtime rate for tipped employees is 1.5 times their regular wage for every overtime hour worked. It is important to note that tipped employees in Arkansas are subject to a lower minimum wage of $2.63 per hour instead of the regular state minimum wage. 

In Arkansas, a “tip credit” is a system that allows employers to pay tipped employees a reduced minimum wage of $2.63. However, a tipped worker must accumulate enough tips to total up to the regular tipped minimum wage of $11.00. If their wage, including tips earned, falls below the minimum wage, their employer must make up the difference.

That being said, an employer cannot include tip credit in the calculation of overtime pay. This means that the entire minimum wage must be taken into account when calculating overtime pay.

Overtime for Salaried Employees in Arkansas 

In Arkansas, only certain salaried employees have the right to receive overtime pay. A salaried employee is an individual who receives a predetermined salary, regardless of the actual hours worked. This means that even if they work more than the hours their salary compensates for, they are still entitled to additional compensation for their extra hours.

To determine a salaried employee’s overtime rate, an employer must first determine their employee’s hourly rate by dividing the salary by the number of hours that salary compensates for.

Then, take the hourly pay rate to calculate the overtime rate for salaried employees using the following formula:

Hourly pay rate x Overtime Hours x Overtime Rate (1.5)

It is important to note that if an employee’s salary covers less than 40 (hours) in a workweek, their regular rate will be added for every subsequent hour working up to 40. Only after 40 hours will time-and-a-half be counted.

If an employee’s salary covers 40 (hours) in a workweek, then time-and-a-half will be paid for any hours over 40.

Calculating Overtime with Commission in Arkansas

In Arkansas, employees who may receive commissions are still entitled to overtime pay, although the rate may differ.

If an employee receives weekly commissions, the commission will be combined with the employee’s weekly wage to get the total earnings for the week. The amount is then divided by the total number of hours worked in the week to determine the regular hourly rate for that week. For any hours worked beyond 40 per week, the employee must be paid additional compensation at a rate of half of the regular hourly rate.

For example, let’s say an employee works 45 hours a week at a rate of $11/hour (Arkansas minimum wage) and receives $50 in commissions for that week. 

(Total hours x Hourly Rate) + Commission

= (45 x 11) + 50

= $545 (total earnings for the week)

Then, divide that by the total hours worked in the week.

= 545 / 45

=$12.11 (new regular hourly rate)

To determine the overtime rate for the commissioned employees, we need to take that new regular hourly rate and halve it.

$12.11 / 2

= $6.06

Since the employee worked an extra 4 hours in the week, that makes his overtime compensation $30.30 ($6.06 x 5 hours).

The amount will vary according to the hours worked, hourly rate, and commission earned.

Overtime Exceptions and Exemptions in Arkansas

In Arkansas, as in many jurisdictions, employees are generally entitled to receive overtime pay for hours worked beyond a standard 40-hour workweek. However, there are exceptions and exemptions to overtime requirements that apply to certain categories of workers and industries. Among the exempted are:

  • Executive Personnel
  • Administrative Personnel
  • Learned Professionals, including artistic professionals
  • Information Technology Personnel
  • External Sales Representatives
  • Highly Renumerated Personnel

The federally regulated earnings threshold necessary for exempting these personnel stands at $844 per week.

However, it is important to note that certain employees are entitled to the overtime pay rates established by the Fair Labor Standards Act, regardless of their level of earnings. The following classifications are:

  • Repetitive manual laborers, known as blue-collar workers.
  • Emergency service personnel, including firefighters, police officers, paramedics, and their equivalents.

Statute of Limitations For Unpaid Overtime Claims in Arkansas

In Arkansas, the statute of limitations for an employee to recover unpaid overtime wages is two years from the date of the violation. For example, an employee who files a lawsuit today can seek the recovery of overtime back wages for only the previous two years. This statute of limitations can be extended to three years if an employer has wilfully or knowingly violated overtime regulations. 

Legal Cases Relating to Overtime Compensation in Arkansas

Below, we present law cases relating to fair overtime compensation for employees in Arkansas: 

1. Employee Accused of Breach of Contract by Filing for Overtime Pay Lawsuit

In the case of Lee v. Lighthouse Compliance Solutions, Inc., Debbie Lee filed a lawsuit against Lighthouse Compliance Solutions (Lighthouse) for violations of the Fair Labor Standards Act (FLSA) and the Arkansas Minimum Wage Act (AMWA). Lee worked as an applicant tracking system director for Lighthouse and claimed that they failed to provide overtime wages.

Lighthouse argued that Lee was not entitled to overtime pay under the administrative exemption of the FLSA. Lighthouse also counterclaimed a breach of contract on Lee’s part. Lighthouse alleged that a severance agreement existed and that Lee breached it by making disparaging remarks, soliciting clients, and bringing claims against them.

Both Lee and Lighthouse sought a summary judgment to dismiss the claims made by each other. Both motions were denied due to a material factual dispute regarding the applicability of the administrative exemption. Both parties disagreed on the primary duties, importance, and autonomy of Lee’s position, as well as whether she exercised discretion and independent judgment.

Lee’s motion to dismiss Lighthouse’s counterclaim was also denied as Lighthouse had provided a sufficient basis for establishing a breach of contract claim. 

Key lessons from this case:

  • Employees classified as “administrative” may be exempt from overtime pay under the FLSA.
  • Employers must have a valid and enforceable contract with employees to assert a breach of contract claim.
  • It is important to consider specific job duties and responsibilities when determining overtime eligibility under the FLSA and AMWA.
2. Employee Claims Bonus Received Must Be Included in Overtime Rate Calculation

In the case of Williams v. Simmons, Tommye Williams filed a complaint against her employer, Dean Simmons, for violating the overtime provisions of the Fair Labor Standards Act (FLSA) and the Arkansas Minimum Wage Act (AMWA). Williams claimed that she regularly worked more than 40 hours per week, including off-the-clock hours, which included lunch and work-related travel hours.

Williams alleged that when she was paid for work exceeding 40 hours per week, it was not at the required rate. She claimed that Simmons had calculated her overtime rate of pay incorrectly by not including her annual cash bonus in her regular rate. Williams claimed that the bonus had been mentioned by Mr. Simmons or his agent during her hiring process. She further asserted that the bonus was a guaranteed part of her annual income and she had considered it part of her total compensation package.

Simmons filed a motion to dismiss this complaint. He claimed that Williams failed to adequately plead an overtime violation and did not establish that the bonus was non-discretionary and should be included in her overtime rate calculation.

The court concluded that Williams had met the pleading standard required to state an overtime claim. The court stated that the employer is responsible for keeping proper records of hours and wages and that Williams had provided enough factual evidence to suggest that the bonus should have been included in the overtime rate. Ultimately, the court denied Simmon’s motion to dismiss and allowed the case to proceed.

Key lessons from this case:

  • Employees are not expected to keep records of their hours and wages, as it is primarily the responsibility of the employer.
  • A nondiscretionary bonus must be included when calculating an employee’s pay rate to correctly calculate overtime rates.
  • To effectively contend a motion to dismiss, an employee must provide sufficient and specific details regarding the circumstances surrounding overtime violations.
3. Employee Seeks Unpaid Overtime Wages Despite Providing Evidence That Supports Otherwise

In the case of Marlin v. Cross County, Clint Marlin filed a lawsuit against Cross County for not providing overtime compensation for all overtime hours he worked. Marlin’s job responsibilities included dispensing medication and other items to prisoners, as well as booking them into the system. 

Marlin alleged that his hourly wage, when accounting for unpaid overtime, fell below the minimum required by federal and Arkansas law. Cross County filed a motion for summary judgment. They argued that there was no genuine issue of material fact and that Marlin’s claims should be decided on legal grounds. The County also contended that Marlin was fully compensated for the hours he worked, and there was no evidence to support his claim of unpaid overtime.

The court determined that summary judgment was appropriate if there was no genuine issue of material fact. The court found that Marlin’s testimony and timesheets supported the county’s position that he was compensated for the hours he worked, including extra hours he claimed he worked. The court also considered the issue of constructive knowledge which meant whether the County should have known about the overtime. It found that Marlin did not complain about the county’s failure to pay adequate overtime until after he was terminated.

Ultimately, the court dismissed Marlin’s claims as he was not entitled to overtime pay.

Key lessons from this case:

  • Constructive knowledge of overtime work would be sufficient to establish liability under the FLSA.
  • Employees need to raise concerns about unpaid overtime promptly rather than waiting until termination or later.
  • Inadequate evidence and failure to support allegations may result in the dismissal of overtime claims.

Learn more about Arkansas Labor Laws through our detailed guide.

Important Cautionary Note

This content is provided for informational purposes only. While we make every effort to ensure the accuracy of the information presented, we cannot guarantee that it is free of errors or omissions. Users are advised to independently verify any critical information and should not solely rely on the content provided.