Arkansas Employment Law Update – April 2017

Arkansas

Copies of Background Checks

On April 6, 2017, Arkansas Governor Asa Hutchison signed legislation (H.B. 2000), which requires employers to provide copies of background checks to employees and applicants for employment.

The law takes effect 91 days after adjournment (projected August 18, 2017).

Read AR H.B. 2000

Private Employers and Guns in Trunks

On April 6, 2017, Arkansas Governor Asa Hutchinson signed legislation (S.B. 37) into law, which permits a concealed carry licensee to possess a concealed handgun in his or her employer’s parking lot under specific terms and in accordance with safety procedures. The law also affords private employers protections from liability and the right to impose restrictions.

The law is effective 91 days after adjournment (projected August 18, 2017).

Read AR S.B. 37

Withholding Tax on Pay for Domestic Services

Per an April 6, 2017 legal opinion (No. 20170406) released by the Revenue Legal Counsel at the Arkansas Department of Finance and Administration (department), Arkansas income tax withholding is not required for compensation paid for domestic services performed by a ”sitter“ unless the remuneration is $2,500 or more in a year. Per the opinion, a sitter is an individual who furnishes personal attendance, companionship, or household care services to children or to individuals who are elderly or disabled.

Generally, withholding state income is not required on compensation for domestic services because it does not fall within the definition of wages for withholding tax purposes. However, if compensation is $2,500 or more per year, then the payor must issue a Form 1099 to the person rendering the services and provide the department with a copy. If a Form 1099 is not issued, then the department will withhold income tax from monies paid and may impose personal liability for the failure to withhold income tax when required.

Read the legal opinion.

Clarification of the Arkansas Minimum Wage Act in Response to Holding in Gerber Products Company v. Hewitt

On April 5, 2017, Arkansas Governor Asa Hutchison signed legislation (H.B. 1846) into law amending and clarifying the Arkansas Minimum Wage Act in addition to resolving questions triggered by the holding in Gerber Products Company v. Hewitt, 492 S.W.3d 85. The law also provides an interpretation of Ark. Code Ann. §§ 11-4-205 and 11-4-218(b) as to the activities that constitute work under the Arkansas Minimum Wage Act.

According to the legislation, an employer is not subject to liability for its failure to pay an employee minimum wages, or for failure to pay an employee overtime compensation, for or because any of the following employee activities:

  • Walking, riding, or traveling to and from the actual place of performance of the principal activity or activities that the employee is employed to perform; and
  • An activity that is preliminary to or postliminary to the principal activity or activities, that occurs either before the time on any particular workday when the employee commences or subsequent to the time on any particular workday when he or she ceases the principal activity or activities.

The use of an employer’s vehicle for travel by an employee and activities performed by an employee that are incidental to the use of the vehicle for commuting are not considered part of the employee’s principal activities if the use of the vehicle for travel is within the normal commuting area for the employer’s business or establishment and the use of the employer’s vehicle is subject to an agreement on the part of the employer and the employee or representative of the employee.

However, an employer will not be relieved from liability if the activity is compensable by either:

  • An express provision of a written or oral contract in effect at the time of the activity between the employee, his or her agent, or collective-bargaining representative and his or her employer; or
  • A custom or practice in effect at the time of the activity at the establishment or other place where the employee is employed covering the activity, not inconsistent with a written or oral contract in effect at the time of the activity, between the employee, his or her agent, or collective-bargaining representative and his or her employer.

An activity is compensable under a contract provision or a custom or practice only when the activity is engaged in during the portion of the day with respect to which it is compensable.

In the application of the minimum wage and overtime compensation provisions, in determining the time for which an employer employs an employee with respect to walking, riding, traveling, or other preliminary or postliminary activities, the time, but only that time, during which the employee engages in any activity which is compensable (as previously defined) are counted.

The law became effective upon the Governor’s approval on April 5, 2017.

Read AR H.B. 1846

Matching Contributions to Employees’ Tax Deferred Tuition Savings Program Permitted

On April 4, 2017, Arkansas Governor Asa Hutchison signed legislation (H.B. 1762) into law, which allows an employer to make a matching contribution to an employee’s tax deferred tuition savings program as an employee benefit.

The law will take effect 91 days after adjournment (projected August 18, 2017).

Read AR H.B. 1762

Possession of a Concealed Handgun

On April 3, 2017, Arkansas Governor Asa Hutchison signed legislation (S.B. 724) into law concerning possession of a concealed handgun on the premises and on the grounds of a teaching hospital, and exempting a private university or private college from the requirement that it post at its entrance notice that it does not permit the carrying of a concealed handgun on the premises.

The law is effective September 1, 2017.

Read AR S.B. 724