If your business has employees in the state of Arkansas, you’ll need to make sure you adhere to Arkansas’s Workers’ Compensation Insurance laws. Workers’ Compensation provides medical and financial benefits for employees who suffer work-related injuries or illnesses or for their survivors in the case of an employee death.

Who needs Workers’ Compensation Insurance in Arkansas?

Arkansas requires all employers with at least three employees to obtain Workers’ Compensation Insurance. Building and building repair companies with two or more employees, contractors that employ one or more employees and subcontract some of their work, and subcontractors with one or more employees are also required to obtain Workers’ Compensation Insurance. In Arkansas, an “employee” is generally defined as any individual who performs services for another under a contract of hire or apprenticeship and is not an independent contractor. 

The Arkansas Workers’ Compensation Law (WCL) defines all of the requirements for Workers’ Comp in Arkansas, and the Arkansas Workers’ Compensation Commission (AWCC) monitors, enforces, and administers the program. Ensuring your company is in compliance is critical, as there are serious penalties and fines for those who fail to abide by state regulations.

What employees are covered under Workers’ Compensation in Arkansas?

Almost all workers are covered under Workers’ Compensation in Arkansas. If you provide work or services for an employer, and you are not an independent contractor, you will likely be eligible for Workers’ Compensation Insurance. 

The following are categories of employees that are eligible for Workers’ Comp coverage:

• Full-time and part-time employees
• Interns and apprentices
• Minors
• Undocumented workers
• Corporate officers, sole proprietors, partners, members of an LLC, members of professional associations, and self-employed people (however, these individuals may elect to exclude themselves from coverage)

The following are categories of employees that are generally excluded from Workers’ Comp coverage:

• Independent contractors
• Casual workers
• Domestic workers
• Agricultural workers
• Real estate agents

What Workers’ Compensation benefits do employees receive?

Under Workers’ Compensation in Arkansas, employers are required to provide the following benefits to employees who are injured in the course of employment:

Medical Benefits 

• Employers are required to cover any necessary medical expenses, including medical appointments, hospital bills, lab tests, crutches, medication, and other expenses. 
• Mileage and travel expenses for medical treatment are covered. 

Temporary Total Disability Benefits

• Employees who are unable to work due to a work-related injury are eligible for Temporary Total Disability (TTD) benefits, which provides 66 and two-thirds percent of the worker’s average weekly wage before injury, rounded to the nearest whole dollar, up to the maximum set by state law. 
• The AWCC establishes minimum and maximum benefit amounts, which change yearly. For accidents that occurred in 2021, the minimum benefit was $20 and the maximum was $736.
• Temporarily totally disabled employees are entitled to benefits for as long they are in the healing period and unable to earn wages. 

Temporary Partial Disability Benefits

• If injured employees are able to return to work in a partial or limited capacity while recovering, they may be eligible for Temporary Partial Disability (TPD) benefits. TPD benefits provide 66 and two-thirds percent of the difference between a worker’s pre- and post-injury average weekly wage.
• The AWCC establishes minimum and maximum benefit amounts, which change yearly. For accidents that occurred in 2021, the maximum TPD benefit was $552 per week and the minimum benefit was $20.
• TPD benefits are available while the employee is in the healing period.

Permanent Partial Disability Benefits

• Employees who recover from a covered injury but suffer a permanent partial impairment may be eligible for Permanent Partial Disability (PPD) benefits.
• The number of benefit weeks available from PPD can vary based on the body part that was injured and the severity of the injury. The WCL’s schedule of injuries explains how long benefits will be paid and what benefits are available for different types of injuries.
• PPD benefits provide 66 and two-thirds percent of a worker’s average weekly wage pre-injury, rounded to the nearest whole dollar, up to the maximum set by state law. 
• The AWCC establishes minimum and maximum benefit amounts, which change yearly. For accidents that occurred in 2021, the maximum PPD benefit was $552 per week and the minimum benefit was $20.
• TPD benefits are available for a maximum of 450 weeks for non-scheduled injuries.

Permanent Total Disability Benefits

• Employees who are permanently disabled and unable to earn any wages may be eligible for Permanent Total Disability (PTD) benefits.
• Permanent disabilities include the loss of both hands, both arms, both legs, both eyes, or a loss of a combination of members of the body such as hands, arms, legs, and eyes.
• PTD benefits provide 66 and two-thirds percent of a worker’s average weekly wage pre-injury, payable as long as the employee remains permanently and totally disabled and is unable to earn wages.
• The AWCC establishes minimum and maximum benefit amounts, which change yearly. For accidents that occurred in 2021, the minimum benefit was $20 and the maximum was $736.
• There are no limits to the number of weeks that PTD benefits are payable.

Death Benefits

• Employers are required to pay burial expenses of up to $6,000. 
• A worker’s dependents may be eligible to receive up to 66 and two-thirds percent of the worker’s average weekly wage, up to the maximum amount allowed by the AWCC. For accidents that occurred in 2021, the minimum benefit was $20 and the maximum was $736.
• Death benefits can be paid to a surviving spouse for life but will be terminated upon remarriage. Dependent children can receive benefits until they are 18 unless they are physically or mentally incapacitated, in which case they may receive benefits for life or until they are no longer incapacitated.  

What are the penalties for breaking Arkansas Workers’ Compensation laws?

Failure to adhere to the Workers’ Compensation laws set out by the WCL can result in significant fines and even imprisonment. In order to avoid any costly penalties, it’s important to consult the WCL or your insurer to ensure you are in compliance. Below are the major ways in which companies can be penalized:

Failure to Report Injuries

• Employers that fail to report an accident within 10 days may be required to pay a $500 fine.

Failure to Pay Benefits

• Employers that fail to pay benefits within 15 days may be required to pay the amount due plus an additional 18 to 36 percent of the amount of the claim.
• Employers that fail to secure compensation may be required to pay a fine of up to $10,000 or be found guilty of a class D felony, which is punishable by up to six years in prison and a fine of up to $10,000.
• Employers may be required to pay a fine of up to $1,000 per day of violation. 
• Employers that fail to pay compensation or fail to pay any civil penalties may be prohibited from operating until payment is completed. 

Fraud

• Willfully misrepresenting information to avoid paying benefits, maintaining coverage, or paying insurance premiums may lead to a class D felony charge, which is punishable by up to six years in prison and a fine of up to $10,000.

Discrimination or Obstruction of Claims

• If employers discriminate in an employee’s hiring or work conditions due to the employee’s claim for benefits or obstruct claims from being filed, they may be required to pay a fine of up to $10,000 and may be charged with a class D felony punishable by up to six years in prison and a fine of up to $10,000.

Failure to Offer Suitable Employment

• If employers deny injured employees an opportunity to return to suitable work without a reasonable cause, they may be required to pay the difference between the employee’s Workers’ Compensation benefits and the employee’s normal wages pre-injury. They may also be required to pay costs associated with a vocational rehabilitation program for up to 72 weeks.

How much does Workers’ Compensation Insurance cost in Arkansas?

According to the National Academy of Social Insurance Workers’ Compensation Report (November 2020), the average employer cost for Workers’ Compensation in Arkansas was $0.70 per $100 of covered wages. This figure is estimated across all insurers and all industries, so the cost to your particular business may vary.

How does the Workers’ Compensation claims process work in Arkansas?

Employees who suffer an occupational injury or illness must notify their employer as soon as possible. Employers must submit documentation to the AWCC within 10 days of learning of an employee’s injury or illness. Employers have 15 days from the date when they first learned of an employee’s work-related condition to either begin paying benefits or deny the claim. If necessary, the employer can request additional time to gather information; the request must be made within the 15 day period. 

Arkansas Workers’ Compensation Insurance Resources

For more information on Arkansas Workers’ Compensation laws and requirements, please visit the following resources:

• Arkansas Workers’ Compensation Commission (AWCC)
• Basic Facts About Workers’ Compensation in Arkansas