Compliance Watch:

What are my overtime rights in Arkansas?

Understanding your overtime rights in Arkansas is essential for ensuring that you are fairly compensated for the extra hours you work. In Arkansas, overtime regulations are governed by both state and federal laws. This article provides a comprehensive overview of your overtime rights in Arkansas, including who qualifies for overtime pay, how overtime is calculated, and the steps you can take if your employer fails to pay you properly.

Employers may use various strategies to avoid providing proper compensation to their employees for work that should count as overtime. Common tactics include:

1. Requiring Employees to Perform ‘Off-the-Clock’ Work: Employers may assign tasks such as prep work, answering phone calls, or completing post-shift duties outside of regular work hours without compensating the employees. Employers are obligated to document all tasks performed by employees and provide appropriate compensation. ‘Off-the-clock’ work is illegal and must be paid if the employer knows or should have known about it. This includes tasks completed before the start of a shift, during unpaid breaks, and after the shift has ended.
2. Averaging Hours Worked: This tactic involves scheduling employees in a way that balances their hours over multiple weeks. For instance, if an employee works 49 hours one week, the employer might schedule them for only 31 hours the following week, making it appear as though they worked two 40-hour weeks. Under the FLSA, overtime must be calculated every week, not averaged over multiple weeks.
3. Providing Comp Time: Employers may offer time off to employees to prevent them from working overtime hours. For example, allowing an employee to take Friday off if they worked a double shift on Thursday. In the private sector, compensatory time off instead of overtime pay is generally not allowed under the FLSA. This practice is only permissible for public sector employees under specific conditions and agreements.
4. Misclassifying Workers as Salaried Employees: Employers may misclassify employees as salaried workers to avoid paying overtime rates. Misclassification involves incorrectly categorizing non-exempt employees as exempt salaried employees. To be exempt from overtime, a salaried employee must meet the salary threshold and job duty requirements set by the FLSA.

In Arkansas, there is no specific state law defining full-time employment. Instead, full-time hours are typically determined based on federal guidelines, industry standards, and individual employer policies.

Federal Guidelines: Under the Affordable Care Act (ACA), full-time employment is generally considered to be at least 30 hours per week or 130 hours per month. This guideline is mainly used to determine eligibility for health insurance benefits under the ACA.

Industry Standards: Full-time hours can vary by industry and employer. While a 40-hour workweek is common, some industries may have different standards. Employers in Arkansas have the discretion to define full-time employment according to their operational needs, provided they comply with federal regulations.

Employer Policies: Employers may specify their definitions of full-time employment in employee handbooks, contracts, or company policies. These definitions can vary and often determine eligibility for employee benefits such as health insurance, retirement plans, and paid time off. Additionally, full-time employees might receive company-specific perks like tuition reimbursement and wellness programs.

• Transportation Workers: Federal hours-of-service regulations for transportation workers limit driving hours and mandate rest breaks. For example, truck drivers are limited to 11 hours of driving time following ten consecutive hours off duty and must take a 30-minute break after eight hours of driving.
• Healthcare Workers: Healthcare workers may have guidelines recommending rest periods to prevent fatigue and ensure patient safety. These guidelines are often implemented at the institutional level and can vary by employer.

Collective Bargaining Agreements: Employees covered by collective bargaining agreements or specific contracts may have negotiated terms that limit consecutive work hours to protect them from excessive work.

Youth Employment: For minors under 18, Arkansas state law imposes stricter limits on work hours:

• Minors aged 14-15: Can work only three hours on a school day, eight hours on a non-school day, and 18 hours in a school week.
• Minors aged 16-17: Can work up to eight hours per day, up to 40 hours per week during non-school weeks, but are limited to 30 hours per week during school weeks. There are also restrictions on the times of day they can work, with work hours limited to between 7:00 a.m. and 7:00 p.m. (extended to 9:00 p.m. from June 1 to Labor Day).

In Arkansas, there are no specific state laws or federal regulations that mandate the number of hours an employee must have off between shifts for the general workforce, giving employers considerable flexibility in scheduling. However, employers are encouraged to consider the health and well-being of their employees when planning shifts.

General Workforce: For most employees, there are no mandatory rest periods under state law or the FLSA. Employers can schedule shifts without a required minimum rest period between them.

Industry-Specific Regulations:  Specific industries such as transportation and healthcare often recommend rest periods, although these are typically set by institutions or industry bodies rather than by law. For instance, the Federal Motor Carrier Safety Administration (FMCSA) requires truck drivers to have at least ten consecutive hours off-duty between shifts to prevent fatigue and ensure road safety.

Collective Bargaining Agreements (CBAs) and Company Policies: Collective Bargaining Agreements (CBAs) and company policies can also influence scheduling. Union agreements may include provisions for rest periods between shifts, and some employers may voluntarily implement policies to promote a healthy work-life balance.

In Arkansas, ‘hours worked’ encompasses all the time an employee spends performing duties for their employer, whether on or off the premises. This includes tasks performed before and after scheduled shifts, if the work is related to job duties and the employer knows or should know about it. Here’s a detailed breakdown of what constitutes ‘hours worked’:

• If the employee is completely relieved from duty during a meal break (typically 30 minutes), this time is not considered hours worked and is unpaid. However, if the employee is required to stay on the premises or perform any work during the meal break, this time must be considered hours worked and compensated accordingly.

Rest Breaks:

• Short breaks, typically lasting from five to 20 minutes, are considered part of hours worked and employees must be compensated for them. These breaks are designed to provide brief rest periods to enhance productivity and well-being.

Travel Time:

• Commuting Time: Time spent commuting to and from the regular workplace is generally not considered hours worked.
• Travel During Work Hours: Travel that occurs during an employee’s regular working hours is considered hours worked. This includes travel as part of the employee’s principal activities.

Training and Meetings:

On-Call Time:

In Arkansas, overtime pay eligibility is governed by the federal Fair Labor Standards Act (FLSA). Here are the key criteria for overtime pay eligibility:

1. Hourly Employees: Hourly employees are generally considered non-exempt and must receive overtime pay for any hours worked over 40 in a workweek. These employees are paid at one and a half times their regular pay rate for overtime hours.
2. Salaried Non-Exempt Employees: Salaried employees who do not meet the criteria for exemption under the FLSA are also eligible for overtime pay. These employees typically perform tasks that do not fall into the executive, administrative, or professional categories. Common examples include manual labor, customer service, clerical tasks, and other similar positions.

In Arkansas, certain employees are classified as exempt from overtime pay under the FLSA. These exemptions typically apply to “white-collar” positions in administrative, professional, or executive roles, as well as certain industry-specific roles. To be classified as exempt, employees must meet specific criteria based on three tests:

1. Salary Basis Test: The employee must receive a fixed salary, regardless of the number of hours worked or the quantity of work completed. This ensures they are salaried employees, not hourly employees, providing consistent and predictable compensation.
2. Salary Level Test: The employee must earn a salary that meets the minimum requirement of the exemption threshold. As of 2024, this threshold is $844 per week or $43,888 annually.
3. Duties Test: The employee’s primary job duties must involve executive, administrative, or professional responsibilities, which typically include exercising discretion and independent judgment in significant matters.

In addition, there are certain industry-specific exemptions such as:

Yes, salaried employees in Arkansas can qualify for overtime pay if they do not meet certain criteria set by the Fair Labor Standards Act (FLSA). To be exempt from overtime, three main requirements must be met:

1. Salary Threshold: Employees must earn at least $844 per week as of the current threshold. If an employee’s salary falls below this threshold, they are deemed non-exempt and are entitled to overtime pay.
2. Job Position: The employee’s position must be categorized under professional, administrative, or executive roles.
3. Job Duties: The job duties must include the use of independent judgment and discretion. This means the employee must have the authority to make significant decisions, set policies, or manage crucial aspects of the business.

If an employee’s role does not satisfy these criteria, they are classified as non-exempt and are eligible for overtime pay.

The regular rate of pay refers to the amount an employee earns for each hour worked and must at least meet the minimum wage requirements. Here’s how it applies to different types of employees in Arkansas:

• Hourly Employees: The regular rate of pay for hourly employees is their standard hourly wage.
• Salaried Employees: Calculating the regular rate of pay for salaried employees involves several steps:
  1. Annual Salary: Multiply the monthly salary by 12 to ascertain the annual salary.
  2. Weekly Salary: Divide the annual salary by 52 (the total number of weeks in a year) to calculate the weekly salary.
  3. Hourly Rate: Divide the weekly salary by the maximum number of standard hours worked in a week (40 hours).

To calculate overtime pay in Arkansas, follow these steps:

Step 1: Determine the Regular Rate of Pay

• Hourly Employees: The regular rate of pay is their standard hourly wage.
• Salaried Employees: Calculate the regular rate by dividing the weekly salary by the standard number of working hours (typically 40). For example, if a salaried employee has a weekly salary of $800, their regular rate of pay would be $800 / 40 hours = $20 per hour.
• Multiple Rates: If an employee works at multiple rates during a single week, calculate the regular rate as the weighted average of those rates by dividing the total earnings by the total hours worked. For example, if an employee earns $400 for 20 hours at one job and $300 for 20 hours at another, the total earnings are $700 for 40 hours. The regular rate is $700 / 40 hours = $17.50 per hour.

Step 2: Compute the Overtime Rate: Multiply the regular rate by 1.5 to get the overtime rate. For example, if the regular rate is $20 per hour, the overtime rate would be $20 x 1.5 = $30 per hour.

Step 3: Calculate Total Overtime Pay: Multiply the overtime rate by the number of overtime hours worked. For example, if the employee worked five overtime hours at the overtime rate of $30 per hour, the total overtime pay would be $30 x 5 = $150.

Overtime earnings in Arkansas are subject to federal income tax and Federal Insurance Contributions Act (FICA) taxes, which cover Social Security and Medicare. Arkansas also has a state income tax, so state income tax is also applicable. Here’s how overtime pay is taxed:

Federal Income Tax:

• Overtime pay is added to your gross income and taxed at your marginal federal tax rate, which varies based on your total income and filing status. The federal tax rates for 2024 range from 10% to 37% depending on income levels.

FICA Taxes:

Arkansas State Income Tax: Arkansas state income tax rates are progressive and vary based on income levels. For 2024, the rates range from 2% to 6.6%. For example, if an employee earns $1,000 in overtime pay:

Total Taxes: 220+62+14.50+40 = $336.50 (assuming no additional Medicare tax).

Key Points:

Employers must report overtime earnings as part of the employee’s total earnings on their W-2 forms, and these earnings are subject to the same federal and state tax withholdings as regular earnings. For detailed and up-to-date information, employees and employers should consult the IRS guidelines and the Arkansas Department of Finance and Administration.

1. Check: Employers can issue checks to employees, including for overtime wages.
2. Cash: Employers may also pay in cash, allowing immediate access to funds. This method is less common but permissible, provided proper records are maintained to ensure compliance with wage and hour laws.
3. Payroll Card Account: Wages can be loaded onto a prepaid payroll card. This method allows employees to withdraw cash, make purchases, or transfer funds, and is convenient for employees without bank accounts.
4. Direct Deposit: This method involves electronically transferring wages directly into an employee’s bank account. It is the most common and convenient method and ensures timely payment.

1. Regular Pay Period: Overtime pay must be included in the paycheck for the pay period in which the overtime hours were worked.
2. Payroll Schedule: Employers must adhere to their established payroll schedules, whether they are weekly, bi-weekly, semi-monthly, or monthly. Overtime compensation should be paid according to this schedule.
3. Timely Payment: Both the Fair Labor Standards Act (FLSA) and Arkansas state laws require that employees receive their full wages, including overtime pay, on the established payday for the pay period in which the work was performed.

1. Back Wages: Employers must pay the full amount of unpaid overtime wages owed to the employee.
2. Liquidated Damages: Under the FLSA, employees can recover liquidated damages equal to the amount of unpaid wages. This effectively doubles the compensation owed to the employee. For example, if an employee is owed $1,000 in unpaid overtime, they would receive $1,000 in back wages and $1,000 in liquidated damages, totaling $2,000.
3. Civil Penalties: The Arkansas Department of Labor and Licensing can impose civil penalties on employers for wage violations. These penalties can be substantial and are intended to deter non-compliance.
4. Criminal Penalties: Deliberate violations may lead to criminal charges. Employers who willfully fail to pay overtime wages can face fines and potential imprisonment for repeated offenses. Under federal law, the U.S. Department of Labor (DOL) can impose fines of up to $10,000 for willful violations and may pursue criminal charges.
5. Attorney’s Fees and Court Costs: If an employee successfully sues an employer for unpaid overtime, the employer may be required to pay the employee’s attorney’s fees and court costs. This provision aims to encourage employees to pursue their rightful wages without the burden of legal expenses.

• Pay Stubs and Timesheets: Documentation showing hours worked and wages paid.
• Employment Contracts or Agreements: Any written agreements outlining the terms of your employment.
• Correspondence with Your Employer: Emails, letters, or messages regarding your pay and hours worked.
• Records of Hours Worked and Overtime Hours Not Compensated: Detailed logs or notes of the hours you worked, including any overtime.

• Complete a Wage Claim Form: Visit the Arkansas Department of Labor and Licensing website to download and fill out the Wage Claim form.
• Submit the Form: You can submit the completed form in person, by mail, or via email to the Arkansas Department of Labor and Licensing.

• Investigate Your Claim: Review the evidence you submitted and may contact your employer for further information.
• Negotiate with Your Employer: Attempt to resolve the issue through negotiation to recover your unpaid wages.
• Provide Guidance: If necessary, inform you about additional legal steps and help you understand your rights throughout the process.

Learn more about Arkansas Labor Laws through our detailed guide.