If you’re an Arkansas employer looking to get your employees and yourself protected with a workers’ compensation policy, we’ve got you covered with all the information you need.
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What you’ll learn
What you’ll learn
What are the recent updates to Arkansas workers’ compensation laws?
Arkansas continues to fine-tune its workers’ compensation laws and rules. Key changes in recent years affect how ‘employee’ status is determined, how coverage is triggered for specific industries, and how Commission rules (including medical-fee schedules and employer responsibilities) are updated. You should check with the Arkansas Workers’ Compensation Commission or your insurance agent each year for the latest rule changes.
Here are some of the relevant recent updates :
- The Arkansas Code continues to evolve; for example the definitions, applicability and “employee” test in Ark. Code Ann. § 11-9-103 were amended in recent years to clarify how employment status is determined.
- Among legal or commission activity: the Commission has updated rules, advisories and medical-fee schedules.
Employers and HR professionals should stay aware of updates to posting requirements, agency rules and compliance obligations (for example changes referenced in labor/employment reviews).
How does workers’ compensation help employers and employees in Arkansas?
In the state of Arkansas, workers’ comp (sometimes called workman’s comp) can provide partial income replacement and medical treatment for employees that are injured or get sick while doing their job. It can provide employers with peace of mind too. In many cases, an employer is protected from litigation due to work-related injuries or illnesses that take place on the job because of workers’ compensation coverage.
Who must provide workers’ compensation insurance in Arkansas?
Employers in Arkansas with three (3) or more employees are required by law to have workers’ compensation insurance coverage for their employees. If you are in a high-risk industry, such as construction, then you must carry workers’ compensation even if you have less than three employees.
Some exceptions to this rule
Exceptions to this requirement include agricultural farm laborers, real estate agents, religious, charitable, non-profit organizations, state employees, casual employees, and inmates. A self-employed person in Arkansas is also not required to carry workers’ compensation insurance but may opt to voluntarily purchase a policy.
Since workers’ comp rules can vary based on your industry and employee count, the table below highlights the main requirements Arkansas employers should know at a glance.
| Category | Details |
| Who must carry workers’ comp? | Employers with 3 or more employees. Construction employers must have a policy even with fewer than 3 employees. |
| Common exemptions | Agricultural farm laborers, real estate agents, religious/charitable/nonprofit organizations, casual employees, inmates, and self-employed individuals (unless they opt in). |
| What coverage helps with | Medical treatment, partial wage replacement, benefits for temporary or permanent disability after a work-related injury or illness. |
| How to buy coverage | Employers can purchase a policy from a licensed private carrier, broker, or agent. Self-insurance and pooled self-insurance may be permitted by the Arkansas Workers’ Compensation Commission (AWCC). |
| Traditional coverage model | Premiums based on estimated annual wages; includes an upfront payment and ongoing premium adjustments. |
| Pay-as-you-go coverage | Premiums calculated each payroll run; no lump-sum deposit; lowers audit risk. |
What does coverage help with?
In the event of a workplace accident, workers’ comp insurance provides both medical coverage and payments for lost wages and permanent disabilities. This can include temporary or permanent benefits.
What is a certificate of non-coverage for Arkansas workers’ comp?
A Certificate of Non-Coverage (CNC) is a document issued by the Arkansas Workers’ Compensation Commission that allows a sole proprietor, partner, or LLC member to elect not to be considered an “employee” for the purposes of Arkansas’s Workers’ Compensation laws. It means the individual is presumed not covered by the workers’ compensation act during the term of the certification.
To obtain a CNC, you must apply (Form AR-A) with a notarized affidavit, pay the required $50 fee, and meet the Commission’s conditions.
A CNC gives an owner the option to formally opt-out of being treated as an employee under the Arkansas workers’ comp law, which is useful if you’re the only worker in your business and want clarity. But if you hire others, you still likely need coverage for them.
Does a single-member LLC need workers’ compensation insurance in Arkansas?
If you operate a single-member LLC and you’re the only person working with no employees, you’re generally not required by Arkansas law to carry workers’ compensation insurance. Arkansas requires businesses with three or more employees to provide coverage in most cases.
However, there are important caveats:
- If your LLC is in a high-risk industry (for example: construction), even one or two workers may trigger coverage.
- Even if you’re not required, you can choose to carry coverage voluntarily — which can give you more protection if you, as the owner, are injured.
How do Arkansas employers purchase workers’ compensation?
Any private insurance carrier, broker, or agent can assist an employer with purchasing a policy as long as they are licensed to operate in the state. Self-insurance may also be an option, as well as pooled self-insurance if it is permitted by the Arkansas Workers’ Compensation Commission (AWCC).
Workers’ compensation comes in a couple of different forms.
Traditional
Premiums for traditional plans are based on an estimate of a company’s gross annual wages, after which employers must pay an initial, upfront sum, with monthly or quarterly payments following for the remainder of the year.
Non-traditional
Because they are calculated during each payroll, pay-as-you-go premiums ensure businesses pay exact amounts for their coverage. These plans eliminate the need for upfront lump sum payments and year-end audits.
It’s important to remember that employers should always be the ones to purchase the plan. The cost should never be deducted from the employees’ pay.
More information is available from Arkansas’ Workers’ Compensation Commission.
Workers’ compensation protects you and your employees
As an Arkansas employer, having a workers’ compensation policy for your team is legally required, but it has benefits for both you and your employees. By providing insurance, you protect them should they get sick or injured while on the job, and it also shields you from potential litigation related to workplace injury and illness. Obtaining coverage helps you stay compliant and provides peace of mind for both you and your workers.
Please note all material in this article is for educational purposes only and does not constitute tax, benefits or legal advice. You should always contact a qualified tax, legal or financial professional, in your area for comprehensive tax or legal advice.
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Jon Davis is the Sr. Content Marketing Manager at OnPay. He has over 15 years of experience writing for small and growing businesses. Jon lives and works in Atlanta.