Overview. On March 14, Arkansas Governor, Asa Hutchinson, signed into law Act 435 (H.B. 1609) increasing the flexibility in the law regarding the frequency of the payment of wages for certain employees. Arkansas law currently requires employers to pay wages of salespersons, mechanics, laborers or other servants semimonthly. The new law will permit employers to pay wages no less frequently than semimonthly, such as weekly or biweekly. This change provides covered employers with flexibility to pay the employees in these categories more than twice per month. However, these employees must still be paid at least twice per month at a minimum. The requirements are set forth below.
Effective Date. The Act is expected to take effect mid-September. Under Arkansas law, an Act becomes effective on the 91st day after the legislative session ends or as provided. No effective date was provided in the Act and the Arkansas legislative session is scheduled to end on June 12, 2017.
Details. Act 435 modifies Arkansas Code § 11-4-401(a) to read as follows:
(a) Except as provided in subsection (c) of this section, all corporations doing business in this state who shall that employ any salespersons, mechanics, laborers, or other servants for the transaction of their business shall pay the wages of the employees no less frequently than semimonthly.
This change permits employers to pay these employees on pay periods other than semi-monthly, such as weekly or biweekly.
Employers should note, the Arkansas Code § 11-4-401(c) remains unchanged as follows:
(c) All corporations with an annual gross income of five hundred thousand dollars ($500,000), or more, doing business in this state who shall employ any salespersons, mechanics, laborers, or other servants for the transaction of their business shall pay the wages of their management level and executive employees who are exempt under the provisions of Section 13 of the Fair Labor Standards Act, from the provisions of Sections 6 and 7 of that act, and who are compensated at a gross rate in excess of twenty-five thousand dollars ($25,000) per year, at a minimum of once each calendar month.
Call to Action. Employers considering a change in pay frequency should provide affected employees with written notice as far in advance as possible.
If you have any questions regarding this Alert, please contact your Relationship Manager or Service Team.