Does Arkansas require workers’ compensation insurance?
Yes, once a business regularly employs three or more people: that is the general line in Ark. Code 11-9-102. Construction is stricter: two employees in building or building repair work, or one employee for a contractor that subcontracts part of a job or for a subcontractor. Owners count toward the number. Sole proprietors, partners, and LLC members can opt themselves out with a Certificate of Non-Coverage from the Workers' Compensation Commission.
Updated . Written by Andre Beukers, principal at Redoubt, a commercial insurance agency in Salt Lake City, not a government office.
How many employees before Arkansas requires workers' comp?
Most Arkansas employers need coverage once they regularly employ three or more people, the line Ark. Code 11-9-102 draws for covered employment. Building and building repair work triggers it at two employees, and a contractor that subcontracts any part of its contract, or a subcontractor, needs coverage at one. The Commission warns employers under three to check before assuming they are outside the law.
Count everyone. AWCC Form A says that for these thresholds an employee includes an owner, a sole proprietor, a partner working full time in the partnership, part-time workers, and volunteers, so a two-owner shop with one hire can already be at three.
Source: AWCC, What Employers Should Know, checked .
Which owners, officers, and family members are exempt in Arkansas?
A sole proprietor, partner, or LLC member can elect out of coverage by holding a Certificate of Non-Coverage; while it is current, Ark. Code 11-9-102 treats the holder as not an employee. Corporate officers do not use that certificate: the carrier excludes them on the policy. Agricultural farm labor, domestic servants in private homes, and nonprofit religious, charitable, or relief organizations fall outside the Act.
Source: AWCC Forms, Form A, checked .
What happens to a Arkansas employer with no workers' comp?
Under Ark. Code 11-9-406, an employer that fails to secure coverage can be fined up to $10,000 by the Commission or charged with a Class D felony, and the Commission may also assess up to $1,000 for each day of violation. If the employer still does not insure or pay, the Commission can ask a circuit court to bar it from employing anyone until it does. The Commission adds that a noncompliant employer may lose protections the Act would otherwise give it.
Source: AWCC, What Employers Should Know, checked .
Who enforces workers' comp in Arkansas?
The Arkansas Workers' Compensation Commission, part of the Department of Labor and Licensing, enforces the requirement. Its Operations/Compliance Division checks coverage, writes to or visits employers it cannot verify, and issues Certificates of Non-Coverage. The Commission is not an insurer, and the Arkansas Insurance Department regulates the carriers.
Source: AWCC, About Us, checked .
Where do Arkansas employers buy coverage?
Arkansas is a private-market state with no state fund selling policies to employers. A business buys from a licensed carrier in the voluntary market, qualifies with the Commission to self-insure, or, if no carrier will write it, goes to the assigned risk market. In its 2022 rate announcement the Insurance Department said about 91% of Arkansas employers were covered in the voluntary market.
Source: Arkansas Insurance Department, 2022 workers' comp rates, checked .
Who sets the class codes and rates in Arkansas?
Arkansas is an NCCI state. The Arkansas Insurance Department reviews and adopts the National Council on Compensation Insurance's loss cost and assigned risk rate recommendations, and Commission rule 11 CAR 25-102 has every carrier report its Arkansas policies to NCCI. Class codes and experience mods come from NCCI, and each carrier files its own rates on top of the approved loss costs.
Source: Arkansas Insurance Department, 2022 workers' comp rates, checked .
Is there an exemption or waiver form in Arkansas?
Yes. A sole proprietor, partner, or LLC member files AWCC Form A, the Application for Certificate of Non-Coverage, with a notarized affidavit and a $50 fee, by mail or with online payment. The Commission processes it within ten working days. If the business has employees or is incorporated, Form A goes through the insurance agent with proof of a policy, and an uninsured business with several owners needs a certificate for each one.
A certificate exempts only the person named on it, never their employees, and the Commission's joint bulletin with the Insurance Department and the Contractors Licensing Board says it is not a waiver of workers' comp liability. Residential contractors must show a workers' comp policy to be licensed, so an owner with no employees usually buys a minimum premium policy that excludes themselves. That policy is still audited, and pay to uninsured subcontractors can be added to it.
Source: AWCC, Certificates of Non-Coverage, checked .
Sorting out Arkansas workers' comp for your business
Tell Redoubt what the business does, who works in it, and what the Arkansas requirement in front of you says. We will say whether a policy, a waiver, or an exclusion fits.
This is general insurance information, not legal advice or a coverage determination. Statutes, agency instructions, policy forms, and the facts of the business control.
Workers’ comp requirements in every state
Each state page gives the employee threshold, the owner and officer exemptions, the penalty for going without, the rating bureau, the market, the enforcing agency, and the exemption filing, each with its statute or agency source.
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The hub, and the Arkansas pages that go deeper
Arkansas workers’ comp FAQ
Do I need workers' comp in Arkansas with only two employees?+
Often not, but check the details. The general line under Ark. Code 11-9-102 is three regularly employed people, and owners count toward it. Two employees in building or building repair work is enough, and a contractor that subcontracts or a subcontractor needs coverage from the first employee.
Can an Arkansas LLC owner skip workers' comp?+
An LLC member can exclude themselves by getting a Certificate of Non-Coverage from the Workers' Compensation Commission with Form A, a notarized affidavit, and a $50 fee. The certificate covers only that member. Once the LLC has employees who bring it to the threshold, it needs a policy for them.
Does a Certificate of Non-Coverage protect the contractor who hires me?+
It shows the holder elected out of coverage, and a current certificate means the holder is presumed not to be an employee. It is not a waiver of liability for anyone the holder brings to the job. If a subcontractor's helpers are uninsured, the hiring contractor's carrier can charge premium for them at audit.
What happens if an Arkansas employer is caught without coverage?+
The Commission issues a proposed order that can carry a fine of up to $10,000, or up to $1,000 a day, under Ark. Code 11-9-406, and the violation can be charged as a Class D felony. An employer that does not comply can be enjoined from employing anyone until it insures and pays.