The minimum wage in the state of Arkansas is more than the federal minimum wage of $7.25. What’s more, Arkansas might see the minimum wage increase in the coming years, thanks to some recent ballot measures to increase the minimum wage across the state.
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2020 Minimum Wage in Arkansas: $10.00 per hour
On January 1, 2020, the Arkansas state minimum wage increased from $9.25 an hour to $10 an hour. This is, in part, due to a ballot measure — known as Issue Number 5, which passed during the 2018 midterm elections — that is intended to incrementally increase the minimum wage across the state over the next few years. By January 1, 2021, the minimum wage should reach $11 an hour, as per the initiative.
Minimum Wage Exemptions in Arkansas
Some types of employment are exempt from these minimum wage requirements, based on the Fair Labor Standards Act (FLSA). Exemptions include casual domestic workers (such as babysitters or caregivers), federal government employees, and certain types of agricultural or farm workers. Additionally, there is a separate wage requirement for tipped employees (see below), and employers with less than four employees are exempt from the state minimum requirements.
As for students attending a state-accredited school on a full-time basis and working part-time, they may earn up to 85% of the minimum wage (about $8.50 an hour) for up to 20 hours of work per week, as agreed upon by their employer. This also requires a student “certificate of eligibility” from the Department of Labor in AR (see page 20).
Furthermore, Arkansas also offers employers the ability to pay employees under the age of 20 a “training” wage for their first 90 days of employment. This wage is currently set at $4.25 an hour, and will increase to the state-set minimum wage after the training period concludes.
Tipped: $2.63 per hour
As with many other states, Arkansas has a separate wage requirement for employees who earn tips. The state requirements for a “tipped employee” are that the employee must earn a minimum of $20 a month in tips to qualify. Federal requirements for tipped employees is a base pay of $2.13 an hour, and a minimum of $30 a month in tips, so the Arkansas state requirements are higher than the federal standard.
The tipped wage requirement is $2.63, but the employee must earn at least an additional $7.37 per hour on average (known as “tip credit” for the employer) in order to qualify for this wage amount. Otherwise, they will not be making the state’s minimum wage per hour amount, and the employer will be required to increase their wage to meet the minimum wage requirement. In total, tipped employees should always be earning $10 an hour in both hourly wages and tips.
Tipped employees are also eligible for overtime pay, and employers must pay their employees the state-required amount (time and a half, or 1.5 times the minimum wage). Employers are also not allowed to take a higher tip credit for overtime hours.
Weekly: $400 for 40 hours
Employees working a full-time job of at least 40 hours a week should be making about $80 a day on minimum wage. For a full 40-hour week, employees could make $400 per week.
For salaried employees, they must make at least $455 per week in order for their employer to stay within the federal FLSA guidelines.
Employees working a full-time job of at least 40 hours a week and earning the minimum wage should receive an annual income of about $20,800 (before taxes).
According to national data, the poverty line for a family unit of two living together is $17,240. In the state of Arkansas, according to the Census Department and 2019 estimates, about 17.2% of the population is living in poverty. The recent increases to the minimum wage are based on this information, as well as taking into consideration the inflation of the dollar, based on the Consumer Price Index (CPI), and are intended to help elevate working families out of poverty.
Overtime: $15.00 per hour
The state of Arkansas considers overtime hours any time that you spend working over the 40 hours a week maximum. This does not include exempted employees, and excludes some emergency first responders (such as police, fire departments, and emergency hospital staff), as they have their own specialized overtime provisions.
The overtime wage for employees working more than 40 hours a week in Arkansas is time a half, or $15 per hour worked over the initial 40 hours.
Arkansas Minimum Wage Increase News
As noted above, Issue 5 was voted into law during the midterm elections of 2018. The law went into effect on January 1 of 2019, and will require a minimum wage increase over the next two years. The schedule for these increases is as follows:
- January 1, 2020: increase to $10;
- January 1, 2021: increase to $11;
Currently, there are no further plans to increase the minimum wage after 2021, but this could change as inflation and the CPI increases over time. Additionally, the state minimum wage applies to all cities across the state, and no city currently has a higher minimum wage requirement than the state.
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