Minimum Wage: Arkansas

Minimum Wage requirements for other states

Federal law and guidance on this subject should be reviewed together with this section.

Authors: E. B. Chiles, IV, Cameron C. McCree and Amber Davis-Tanner, Quattlebaum, Grooms, Tull & Burrow PLLC

Summary

Minimum Wage

An employer with four or more employees must pay its employees at least $8.50 an hour.

The minimum wage will increase to:

  • $9.25 on January 1, 2019;
  • $10.00 on January 1, 2020; and
  • $11.00 on January 1, 2021.

+Ark. Code Ann. § 11-4-203; +Ark. Code Ann. § 11-4-210, as amended by An Act to Increase the Arkansas Minimum Wage.

Tip Credit

An employer of employees engaged in any occupation in which gratuities have been customarily and usually constituted and have been recognized as a part of remuneration for hiring purposes may claim a tip credit of at least $3.62 per hour as long as:

  • The employee actually received that amount in gratuities; and
  • The application of the tip credit results in payment of wages other than gratuities to the tipped employees (including full-time students eligible for subminimum wages) of at least $2.63.

Because the minimum wage is $8.50, the maximum tip credit is $5.87.

The tip credit is in addition to any credit for board, lodging, apparel and other items or services.

+Ark. Code Ann. § 11-4-212, +010 14 CARR 002, § 14-107(E).

Coverage / Definitions

The tip credit is available only for occupations in which tips have been customarily and usually recognized as part of the remuneration for hiring purposes. This includes waiters, waitresses, bellhops, beauty operators and barbers, provided they actually receive and retain tips, and other occupations if the employee actually receives tips in excess of $20 per month.

The tip credit may be taken only for hours worked by the employee in an occupation in which he or she qualifies as a tipped employee. If employment agreements or practices require the employee to turn tips over to the employer or credited to the employer to be treated as part of its gross receipts, the employer must pay the employee the full minimum hourly wage rate because the employee is not a tipped employee.

A tip is a sum presented by a customer as a gift or gratuity in recognition of some service performed. It is to be distinguished from payment of a charge, if any, made for the service. A compulsory charge for service, such as 10% of the amount of the bill, imposed on a customer by an employer's establishment, is not a tip and, even if distributed by the employer to its employees, may not be counted as a tip. In addition to cash (sums presented by a customer that an employee keeps as his or her own), tips include amounts paid by bank check or other negotiable instrument payable at par and amounts transferred by the employer to the employee pursuant to direction from credit customers who designate amounts to be added to their bills as tips. Special gifts in forms other than money or its equivalent - such as tickets, passes or merchandise - are not counted as tips.

Dual Jobs / Sidework

Whenever an employee is required to work 20 minutes or more in any occupation in which gratuities have not been recognized as part of the remuneration for hiring purposes, the rate for the entire hour must be at least the applicable minimum wage rate without an tip credit.

Tip Pools

When employees practice tip splitting - such as when wait staff give a portion of their tips to busboys - both the amounts retained by the wait staff and those given the busboys are considered tips of the individual employees who retain them. Similarly, where an accounting is made to an employer for its information only or in furtherance of a pooling arrangement whereby the employer redistributes the tips to the employees upon some basis to which they have mutually agreed among themselves, the amounts received and retained by each individual as his or her own are counted as his tips.

Recordkeeping

An employer must keep certain records for each tipped employee for whom it claims a minimum wage tip credit.

Credit for Board, Lodging, Apparel and Other Items and Services

An employer that customarily and regularly furnishes an employee with board, lodging, apparel or other items and services may deduct their reasonable value - up to $0.30 per hour - from the minimum wage. +Ark. Code Ann. § 11-4-213 and +010 14 CARR 002, § 14-107(D).

Subminimum Wages

Students, individuals with disabilities, learners and apprentices may be paid less than the minimum wage under certain conditions.

Students, Learners and Apprentices

Employers may pay full-time students 85 percent of the minimum wage. To qualify, the student must attend an accredited educational institution within Arkansas and work 20 hours or less when school is in session and 40 hours or less when school is not in session. See +Ark. Code Ann. § 11-4-210. If the student is employed in a job in which tips are customary, the employer may pay the student 85 percent of the minimum wage for tipped employees. See +Ark. Code Ann. § 11-4-212.

Individuals with Disabilities

Employers may pay a subminimum wage to any person "handicapped by lack of skill, age, or physical or mental deficiency or injury in any way that his or her earning capacity is impaired" who are granted a temporary special exemption license. See +Ark. Code Ann. § 11-4-214.

Learners and Apprentices

Employers who have a valid certification from the U.S. Department of Labor may pay learners and apprentices 85 percent of the minimum wage. +010 14 CARR 002. Employees who qualify as learners and apprentices are defined in +29 C.F.R. § 520.300.

Communications in Postings Required by Arkansas Law

Arkansas requires a poster relating to the minimum wage and other requirements.

Future Developments

There are no developments to report at this time. Continue to check XpertHR regularly for the latest information on this and other topics.