LABOR AND EMPLOYMENT DESK BOOK. USA ARKANSAS Rose Law Firm

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1 LABOR AND EMPLOYMENT DESK BOOK USA ARKANSAS Rose Law Firm CONTACT INFORMATION Tim Boe David P. Martin Rose Law Firm / 1. Do you have a plant closing law in your jurisdiction and if so, what does it require? (For U.S. jurisdictions, please answer: Is there a Baby WARN Act in your state and if so, what does it require?) Arkansas has no state law comparable to WARN. 2. Are there special rules on releases/waivers in your jurisdiction? Under Arkansas law, ordinary contract principles apply in determining the validity of and defenses to releases and waivers. See, e.g., Green v. Owens, 495 S.W.2d 166 (Ark. 1973); Grant County Sav. & Loan Ass n, Sheridan, Arkansas v. Resolution Trust Corp., 968 F.2d 722 (8th Cir. 1992). There are no special rules for releases and waivers in the employment context (such as the requirements of the federal OWBPA). 3. What are the equal employment opportunity/ non-discrimination categories in your jurisdiction (For U.S. jurisdictions, please answer: Are there protected categories beyond Title VII in your state?) In 1993, the Arkansas legislature enacted its first modern civil rights act, the Civil Rights Act of 1993, Ark. Code Ann et. seq. (hereinafter the Arkansas Act ). There are several potentially meaningful differences between the Arkansas Act, Title VII, and the Americans with Disabilities Act of 1990 (hereinafter ADA ), the counterpart federal legislation. For example, one important distinction is found in the definition of employer. The Arkansas Act defines employer as an entity having as few as nine employees.

2 Consequently, the state law covers some smaller employers who are not covered by comparable federal legislation. The Arkansas Act, as does Title VII, prohibits discrimination in the employment context on the following bases: a) Race b) religion; c) national origin d) gender In addition, the Arkansas Act prohibits discrimination in employment on the basis of disability. Age discrimination by public employers is prohibited pursuant to a separate statute, specifically Ark. Code Ann What are the minimum wage and overtime rules (and exemptions) in your jurisdiction? Beginning October 1, 2006, every employer shall pay each of his or her employees wages at the rate of not less than six dollars and twenty-five cents ($6.25) per hour. Ark. Code Ann Generally, no Arkansas employer shall employ any of his or her employees for a work week longer than forty (40) hours unless the employee receives compensation for his or her employment in excess of the hours above specified at a rate not less than one and one-half (1½) times the regular rate of pay at which he or she is employed. Ark. Code Ann Some exemptions to Arkansas minimum wage and/or overtime requirements result from the definition of "employee" in Ark. Code Ann (3)(A-Q). In addition, Arkansas has adopted certain exemptions from the Fair Labor Standards Act, specifically 29 U.S.C. 213(b)(1)-(24) and (b)(28)-(30). Ark. Code Ann (d). Other exempted individuals include, but are not limited to, the following: a) those employed in a bona fide executive, administrative, or professional capacity b) those working as an outside commission-paid salesperson c) those working in an agricultural field or job position. Aside from the statutes stated herein, coverage and exemptions are addressed in Rule of the Administrative Regulations of the Labor Standards Division of the Arkansas Department of Labor. 5. Is there employment-at-will, or some other rule, in your jurisdiction? What are the exceptions? In Arkansas, an employer may fire an employee for any reason or no reason at all under the employment-at-will doctrine. An employment relationship remains terminable at the will of

3 either an employer or employee, unless an agreement exists that provides otherwise or the employee relies upon a personnel manual that contains an express provision against termination except for cause. See, e.g., Gladden v. Arkansas Children s Hosp., 728 S.W.2d 501 (Ark. 1987). An at-will employee has a cause of action for wrongful discharge if he or she is fired in violation of a well-established public policy of the state. See, e.g., Sterling Drug v. Oxford, 743 S.W.2d 380 (Ark. 1988). 6. What are the legal obligations upon terminating an employee in your jurisdiction? In Arkansas, an employer is obligated to pay a terminated employee wages that the terminated employee has earned up through the date of termination. Payment of such wages must be made within seven (7) days of termination if an employee has requested or demanded payment. Otherwise, an employer may pay wages due at the regularly scheduled payday following termination of employment. Ark. Code Ann Are there any family and/or medical leave laws in your jurisdiction, and if so, what do they require? (For U.S. jurisdictions, please answer: Are there family and/or medical leave laws in your state beyond FMLA and if so, what do they require?) Arkansas has no state law applicable to private employers that is comparable to the FMLA. 8. Please list any miscellaneous, interesting or oddball laws in your jurisdiction, and state under what circumstances they pertain. Temporary Assignment for Injured Workers: Arkansas law allows employers to assign employees who would otherwise be away from work on workers compensation leave to light duty positions. The employee need not accept the position, but a refusal generally will make the employee ineligible for compensation. Ark. Code Ann Meal or Rest Break: Arkansas law does not address mandatory meal or rest breaks in the workplace. Breast feeding and Expressing Breast Milk: In March 2009, the Arkansas Legislature passed an act, specifically Act 621, that requires employers to provide reasonable unpaid break time each day to an employee who needs to express breast milk. A private, secure, and sanitary room (other than a toilet stall) must be provided for this purpose. Weekly Payment of Wages: Arkansas law requires that the wages of salespersons, laborers, or other servants be paid semimonthly. Corporations with annual gross income of at least $500, who employ any salespersons, mechanics, laborers, or other servants must pay the wages of their exempt management level and executive employees who have a salary in excess of $25, per year at least once monthly. Ark. Code Ann

4 Method of Payment of Wages: Payment must be made in currency or by check or direct deposit into an employee's account. Although an employer is permitted to pay an employee via direct deposit, an employee has the right under Arkansas law to opt out of electronic direct deposit by providing to the employer a written statement rquesting payment by check. Ark. Code Ann Criminal History in Job Applications: Arkansas law does not address criminal history in job applications. Notice of Electronic Surveillance: Arkansas law does not address notice of electronic surveillance in the workplace. Blacklisting: Arkansas employers are prohibited from engaging in blacklisting, which is the practice of circulating or distributing the names of employees who are considered to be undesirable. Blacklisting constitutes a misdemeanor. Ark. Code Ann New Hire Reporting: Employers are required to report new hires to the state, electronically or otherwise, within 20 days of hire. The purpose of this law is to provide for a State Registry of New Hires that is accessible to the state Department of Human Services, the Employment Security Department, and the Workers' Compensation Commission. Ark. Code Ann Does your jurisdiction have a law requiring employers to give employees access to, or a copy of, their personnel records? Arkansas does not have a law requiring employers to give employees access to, or a copy of, their personnel records. Government employees, however, can request access to their personnel records under the state Freedom of Information Act. 10. Does your jurisdiction outlaw or restrict drug tests, alcohol tests, genetic tests or any other kind of testing? Arkansas law prohibits an employer from requiring a genetic test of or genetic information from an employee or prospective employee for the purposes of distinguishing between or discriminating against or restricting any right or benefit otherwise due or available to an employee or prospective employee. Similarly, an employer may not seek to obtain or use a genetic test or genetic information of an employee or prospective employee for the above purposes. Ark. Code Ann In March 2009, the Arkansas Legislature passed Act 453 which requires that employers bear the cost of any physicals, medical examinations, and drug tests that are required of employees. The only exception to this rule is when an employee tests positive for illegal drugs. Under those circumstances, the employer and employee can agree in writing as to who will bear the cost of future drug tests.

5 Other than a voluntary program aimed at lowering workers compensation premiums (Ark. Code Ann through ), Arkansas has no law expressly restricting an employer s right to test for drugs or alcohol. It is not clear whether an Arkansas court would interpret the disability provisions of the state Civil Rights Act such as to restrict alcohol testing (in accordance with the ADA). 11. Does your jurisdiction have any special rules on the payment of sales commissions? Arkansas law requires that a contract between a sales representative and a principal must be in writing and set forth the method in which the sales representative s commission is to be computed and paid. If an agreement for compensation between a sales representative and a principal is not in writing and is terminated, the principal is required to pay all commissions due the sales representative within thirty (30) working days after the date of the termination. If a principal fails to comply with a contract relating to payment of a commission, the principal is liable to the sales representative for three (3) times the damages sustained by the sales representative, plus reasonable attorneys fees and costs. Ark. Code Ann through What are the basic rules on enforcing non-competes and related agreements in your jurisdiction? Enforceability of a covenant not to compete depends upon its reasonableness in light of the particular facts of the case. For a covenant to be enforced, three requirements must be met: a) the covenantee must have a valid interest to protect; b) the geographical restriction must not be overly broad; c) a reasonable time limit must be imposed. See, e.g., Statco Wireless, L.L.C. v. Southwestern Bell Wireless, L.L.C., 95 S.W.3d 13 (Ark. App. 2003). Further, the contract must be valid as written. If a covenant not to compete is too far reaching to be valid, the court will not make a new contract for the parties. See, e.g., Federated Mut. Ins. Co. v. Bennett, 818 S.W.2d 596 (Ark. App. 1991)