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Arkansas Payroll And Workers' Compensation Rules

Arkansas payroll professionals play an important role in workers' compensation administration. Payroll records provide critical wage and employee information used to administer workers' compensation claims, calculate benefits, support insurance audits, and document an employer's compliance with Arkansas law.

Understanding Arkansas workers' compensation rules is especially important for payroll professionals who are responsible for maintaining employee records, calculating wages, processing payroll after workplace injuries, responding to workers' compensation claims, or providing payroll information to an employer's insurance carrier or third-party administrator.

Arkansas Payroll And Workers' Compensation Compliance Overview

At A Glance

• Arkansas generally requires employers with three or more employees to carry workers' compensation coverage
• Employees are generally covered regardless of whether they are full-time or part-time when they meet the applicable definition of employee
• Certain agricultural, domestic, and other workers may be excluded from Arkansas workers' compensation coverage
• Employers generally obtain workers' compensation insurance from an authorized insurance carrier
• Qualifying employers may apply to become self-insured
• Arkansas permits group self-insurance arrangements subject to applicable requirements
• Employers must maintain records relating to workplace injuries and occupational diseases
• Employers generally must report compensable injuries to their insurance carrier or third-party administrator promptly
• Arkansas generally requires an employer to report a compensable injury to the Workers' Compensation Commission within 10 days after knowledge of the injury when the injury results in more than one day of lost time
• Employees generally must give notice of an injury to the employer as soon as practicable
• Arkansas generally requires a workers' compensation claim to be filed within two years of the date of injury, subject to applicable exceptions
• Payroll records can be used to establish an injured employee's average weekly wage
• Arkansas workers' compensation benefits can include medical benefits, temporary disability, permanent disability, and death benefits
• The Arkansas Workers' Compensation Commission administers the state's workers' compensation system

Arkansas Workers' Compensation Employer Requirements

Arkansas employers should maintain evidence of workers' compensation coverage and ensure that employees understand how workplace injuries are reported. Employers should also maintain accurate information identifying their workers' compensation insurance carrier or third-party administrator.

Employers should maintain appropriate records of workplace injuries and occupational diseases and follow the applicable Arkansas reporting requirements. Payroll and HR departments should coordinate with management to ensure that workers' compensation information is readily available when an employee reports a workplace injury.

Arkansas Workers' Compensation Injury Reporting

Employees and employers have specific responsibilities when a workplace injury occurs. Arkansas generally requires an employee to give notice of an injury to the employer as soon as practicable. Notice should be provided promptly so the employer can arrange medical treatment, investigate the incident, and begin the claims process.

Employers are generally required to report compensable injuries to the Arkansas Workers' Compensation Commission within 10 days after knowledge of the injury when the injury results in more than one day of lost time. Employers should also notify their insurance carrier or third-party administrator promptly according to the carrier's reporting procedures.

Arkansas First Report Of Injury

Arkansas employers subject to the reporting requirement generally use the First Report of Injury form to report qualifying workplace injuries. The report is submitted to the appropriate parties according to Arkansas Workers' Compensation Commission requirements.

Payroll should not wait until payroll processing is affected before communicating a workplace injury. When an employee reports an injury, payroll should follow the employer's established procedure and immediately communicate relevant information to HR, management, safety personnel, and the workers' compensation administrator.

Employee Notice Of Injury

Arkansas generally requires an employee to give notice of an injury to the employer as soon as practicable. Prompt notice helps the employer investigate the incident, arrange medical care, document the injury, and notify the insurance carrier.

Arkansas workers' compensation claims are generally subject to a two-year statute of limitations, although specific circumstances can affect when the filing period begins and whether an exception applies. Employers and employees should verify the applicable deadline for the individual claim.

Arkansas Workers' Compensation And Modified Duty

An injured employee may return to work with restrictions or modified duties. When that happens, payroll should coordinate with HR, management, the employee's supervisor, and the workers' compensation administrator. Payroll should document.

• The date the employee returned to work
• Hours worked
• Wages earned
• Changes in job duties
• Modified or light-duty assignments
• Changes in compensation
• Salary continuation
• Periods of absence
• Other payments related to the employee's workers' compensation status

Accurate post-injury wage information can be particularly important when determining whether an employee has experienced a reduction in earning capacity and whether temporary partial disability benefits apply.

Arkansas Workers' Compensation And Payroll Taxes

Workers' compensation benefits should not automatically be processed in the same manner as ordinary wages. Payroll should identify the nature of each payment and coordinate with the employer's tax, HR, insurance, and workers' compensation professionals to determine the appropriate payroll and tax treatment. Employers should maintain clear records distinguishing:

• Regular wages
• Workers' compensation payments
• Salary continuation
• Modified-duty wages
• Paid time off
• Other payments associated with an injury or workers' compensation claim

About Arkansas Workers' Compensation Insurance

Arkansas employers that are subject to the workers' compensation law generally comply by obtaining coverage from an insurance carrier authorized to provide workers' compensation insurance in Arkansas.

Employers should maintain current evidence of coverage and make sure that payroll, HR, management, and employees know how workplace injuries are reported. Employers should also maintain accurate information identifying their insurance carrier and third-party administrator when applicable.

Arkansas Workers' Compensation Self-Insurance

Qualifying Arkansas employers may apply for authority to self-insure their workers' compensation liabilities. Self-insurance requires approval and involves financial and administrative responsibilities that are generally more substantial than those associated with purchasing a conventional workers' compensation policy.

Arkansas also permits certain group self-insurance arrangements subject to applicable requirements. Employers considering self-insurance should review current Arkansas Workers' Compensation Commission requirements and obtain professional guidance before changing their workers' compensation funding arrangement.

Arkansas Workers' Compensation Coverage For Multistate Employers

Employers with employees who work in multiple states should review Arkansas workers' compensation requirements separately when employees perform work in Arkansas. The employer's insurance policy should be reviewed to ensure that Arkansas exposures are properly covered.

Payroll should maintain accurate work-location information because an employee's state of employment can affect workers' compensation administration, insurance reporting, payroll records, and claims handling.

Arkansas Workers' Compensation Coverage Requirements

How Many Employees Trigger Workers' Compensation Coverage In Arkansas?

Arkansas generally requires employers with three or more employees to secure workers' compensation coverage. The Arkansas Workers' Compensation Commission identifies the three-employee threshold as a general requirement, although specific statutory exemptions apply to certain types of employers and workers.

Employers should not rely solely on the number of workers when determining whether coverage is required. Arkansas law contains specific exclusions and special rules for particular occupations and industries, so businesses should review their workforce and the nature of their operations when determining their obligations.

Are Part-Time Employees Covered?

Part-time status does not automatically eliminate an employer's workers' compensation obligations in Arkansas. An employee who falls within the applicable definition of employee may be covered even when working less than a traditional full-time schedule.

Are Independent Contractors Covered?

Independent contractors are generally treated differently from employees under Arkansas workers' compensation law. However, employers should carefully evaluate the actual working relationship and applicable statutory requirements before treating an individual as an independent contractor.

Worker classification can affect workers' compensation, payroll, unemployment insurance, and other employment obligations, so employers should obtain appropriate professional guidance when classification is uncertain.

Are Agricultural Workers Covered?

Arkansas workers' compensation law contains specific exemptions involving agricultural employers and agricultural workers. Employers operating farms, plantations, or other agricultural businesses should review the applicable statutory definitions and exemptions rather than assuming that the general three-employee rule applies in the same manner to every worker.

Arkansas Payroll Records And Workers' Compensation

Accurate payroll records are essential when a workers' compensation claim requires information about an employee's wages. Arkansas uses an employee's average weekly wage when determining certain workers' compensation benefits, making historical payroll information particularly important.

Payroll departments should be prepared to provide information such as.

• Employee name and identification information
• Date of hire
• Date of injury
• Employment status
• Job title and classification
• Regular wages
• Gross earnings
• Hours worked
• Overtime
• Bonuses and other compensation
• Commissions
• Periods of unpaid leave
• Wage changes
• Pre-injury earnings
• Post-injury earnings
• Modified-duty wages
• Salary continuation payments
• Other compensation information relevant to the claim

Payroll should retain supporting documentation rather than relying solely on a current payroll register. Historical payroll reports, timekeeping records, earning-code information, wage changes, and other compensation records may become important when an injured worker's average weekly wage or other benefit information is reviewed.

How Arkansas Payroll And Workers' Compensation Work Together

Workers' compensation and payroll are closely connected. When an employee is injured at work, payroll may be asked to provide historical earnings, wages, hours worked, bonuses, employment dates, and post-injury earnings. Accurate payroll information can help the employer, insurer, or claims administrator establish the employee's applicable wage information and administer benefits correctly.

Payroll may also become involved when an injured employee misses work because of a workplace injury, returns to work with medical restrictions, works reduced hours, performs modified or light-duty work, receives wages after returning to work, or receives salary continuation. For these reasons, Arkansas payroll departments should have a documented process for responding to workers' compensation claims and producing historical payroll information.

Arkansas Workers' Compensation Benefit Calculations

Arkansas workers' compensation benefits are calculated under state law using applicable statutory formulas and wage information. The average weekly wage is an important factor in determining the amount of certain disability benefits, subject to the statutory limitations and formulas applicable to the claim.

Payroll professionals should provide complete and accurate wage information to the employer's insurance carrier, self-insured program, or claims administrator rather than attempting to independently determine the employee's final workers' compensation benefit.

Average Weekly Wage

Arkansas uses an employee's average weekly wage when determining certain workers' compensation benefits. The applicable calculation can depend on the employee's earnings history and method of compensation. Arkansas law provides specific rules for determining average weekly wage, including situations involving employees who have not worked long enough to establish a conventional earnings history.

Payroll professionals should therefore preserve sufficient historical payroll information to support the applicable wage calculation. This can include regular wages, overtime, commissions, bonuses, and other compensation that may be relevant under Arkansas law.

Temporary Total Disability Benefits

Arkansas provides temporary total disability benefits for qualifying workplace injuries that prevent an employee from working. The amount and duration of benefits depend on the employee's average weekly wage, medical restrictions, the nature of the disability, and the applicable Arkansas workers' compensation rules.

Payroll should accurately track periods when the employee is unable to work, returns to work, works reduced hours, or performs modified duties so that the claims administrator has accurate information for benefit administration.

Temporary Partial Disability

Temporary partial disability benefits may apply when an injured employee returns to work but earns less because of the effects of the workplace injury. Payroll should accurately track post-injury wages and hours worked when an employee returns to work with restrictions.

Accurate post-injury wage information can help the claims administrator determine whether partial disability benefits are applicable and calculate the appropriate benefit amount.

Permanent Partial Disability

Arkansas workers' compensation law provides permanent partial disability benefits for qualifying permanent impairments and disabilities. The applicable benefit depends on factors such as the nature and extent of the injury, medical findings, impairment ratings, wage information, and the statutory provisions applicable to the claim.

Payroll professionals generally will not determine the medical impairment rating, but payroll records may still be relevant to the administration of the claim.

Permanent Total Disability

Arkansas law provides permanent total disability benefits for qualifying injuries that leave an employee unable to earn any meaningful wages in the competitive labor market. The determination involves medical and vocational considerations and is not generally a payroll function.

Payroll records may nevertheless be relevant to the claim when historical wages, employment status, or other compensation information is requested.

Death Benefits

Arkansas workers' compensation law provides death benefits to qualifying dependents when a covered employee dies as a result of a compensable workplace injury or occupational disease. Funeral expenses and other benefits may also be available under applicable law.

Payroll may be asked to provide employment, wage, and compensation information when a fatal workplace injury claim is administered.

Takeaways For Arkansas Payroll Professionals

Arkansas workers' compensation compliance is an important part of payroll administration. Because Arkansas generally requires employers with three or more employees to maintain workers' compensation coverage, businesses should review their workforce, employee classifications, and applicable statutory exemptions carefully.

Payroll professionals should understand Arkansas's specific rules for employee coverage, independent contractors, agricultural workers, multistate employees, wage calculations, injury reporting, benefits, modified duty, and payroll documentation. Prompt communication between payroll, HR, management, and the workers' compensation administrator can help ensure that workplace injuries are properly documented and reported.

Accurate payroll records can make workers' compensation administration easier, support accurate average weekly wage calculations, and help employers respond efficiently to claims, audits, and requests for wage information.

Because workers' compensation requirements can change and individual claims can involve complicated facts, employers should verify current Arkansas requirements and obtain appropriate professional guidance when necessary.

Payroll Training Resources

Payroll professionals responsible for workers' compensation administration should understand how workers' compensation rules interact with payroll records, wage calculations, employee classifications, injury reporting, benefits, and payroll processing. Payroll Training Center provides payroll education and training for professionals responsible for payroll compliance, wage administration, employee records, and related employment requirements.

Recommended Workers' Compensation Training

• Online Workers' Compensation Training

  

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• Workers' Comp Workers' Recovery Professional Associate Certification

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