Arkansas Employment Law Update — May 2019

Arkansas

Empower Independent Contractors Act of 2019

On April 16, 2019, Arkansas Governor Asa Hutchinson signed legislation (H.B. 1850) enacting the Empower Independent Contractors Act of 2019. Under the act, an employer or agency must use the IRS 20-factor test (listed below) in determining the employment status of an individual. Employment status is the status of an individual as an employee or independent contractor for employment purposes, including without limitation wages, taxation, and workers’ compensation issues.

The following 20 factors must be assessed to determine employment status:

  • A person for whom a service is performed has the right to require compliance with instructions, including without limitation when, where, and how a worker is to work;
  • A worker is required to receive training, including without limitation through:
    • Working with an experienced employee;
    • Corresponding with the person for whom a service is performed;
    • Attending meetings; or
    • Other training methods.
  • A worker’s services are integrated into the business operation of the person for whom a service is performed and are provided in a way that shows the worker’s services are subject to the direction and control of the person for whom a service is performed;
  • A worker’s services are required to be performed personally, indicating an interest in the methods used and the results;
  • A person for whom a service is performed hires, supervises, or pays assistants;
  • A continuing relationship exists between a worker performing services and a person for whom a service is performed;
  • A worker performing a service has hours set by the person for whom a service is performed;
  • A worker is required to devote substantially full time to the business of the person for whom a service is performed, indicating the person for whom a service is performed has control over the amount of time the worker spends working and by implication restricts the worker from obtaining other gainful work;
  • The work is performed on the premises of the person for whom a service is performed, or the person for whom a service is performed has control over where the work takes place. A person for whom a service is performed has control over where the work takes place if the person has the right to:
    • Compel the worker to travel a designated route;
    • Compel the worker to canvass a territory within a certain time; or
    • Require that the work be done at a specific place, especially if the work could be performed elsewhere;
  • A worker is required to perform services in the order or sequence set by the person for whom a service is performed or the person for whom a service is performed retains the right to set the order or sequence;
  • A worker is required to submit regular oral or written reports to the person for whom a service is performed;
  • A worker is paid by the hour, week, or month except when he or she is paid by the hour, week, or month only as a convenient way of paying a lump sum agreed upon as the cost of a job;
  • A person for whom a service is performed pays the worker’s business or traveling expenses;
  • A person for whom a service is performed provides significant tools and materials to the worker performing services;
  • A worker invests in the facilities used in performing the services;
  • A worker realizes a profit or suffers a loss as a result of the services performed that is in addition to the profit or loss ordinarily realized by an employee;
  • A worker performs more than de minimis services for more than one person or firm at the same time, unless the persons or firms are part of the same service arrangement;
  • A worker makes his or her services available to the general public on a regular and consistent basis;
  • A person for whom a service is performed retains the right to discharge the worker; and
  • A worker has the right to terminate the relationship with the person for whom a service is performed at any time he or she wishes without incurring liability.

More factors applicable to the worker may demonstrate an employment relationship (employer-employee) and fewer factors applicable may demonstrate the worker is an independent contractor. No one factor has more relevance or weight than another.

The law is effective July 25, 2019.

Read AR H.B. 1850

Personal Information Protection Act Amended

On April 15, 2019, Arkansas governor Asa Hutchinson signed legislation (H.B. 1943) amending the state’s Personal Information Protection Act by adding biometric data to protected personal information. Biometric data is data generated by automatic measurements of an individual’s biological characteristics, including:

  • Fingerprints;
  • Faceprint;
  • A retinal or iris scan;
  • Hand geometry;
  • Voiceprint analysis;
  • Deoxyribonucleic acid (DNA); or
  • Any other unique biological characteristics of an individual if the characteristics are used by the owner or licensee to uniquely authenticate the individual’s identity when he or she accesses a system or account.

The law also provides for the following regarding disclosure of security breaches:

  • If a security breach affects the personal information of more than 1,000 individuals, the business required to make a disclosure about the breach must also disclose it to the Arkansas Attorney General (AG). This disclosure to the AG must be provided at the same time it is provided to an affected individual or within 45 days after the business determines that there is a reasonable likelihood of harm to customers, whichever occurs first.
  • Businesses must retain a copy of the written determination of a security breach and supporting documentation for five years from the determination date. If the AG submits a written request for the written determination of the breach, then the business must send a copy of the written determination and supporting documentation to the AG no later than 30 days after receipt of the request. The determination and documentation are confidential and not subject to public disclosure.

The law is effective August 10, 2019.

Read AR H.B. 1943