Short answer: Usually yes, once you reach three employees. The count drops to two for building and building-repair businesses, and to one for a contractor who subcontracts any part of a job or for a subcontractor. Owners, partners, part-timers and volunteers count toward the total. Farm labor, domestic help and nonprofit charitable employers are outside the law.
The headcount rules
The Arkansas Workers' Compensation Commission's Form AR-A application (revised 1-1-2024) summarizes when the law applies:
| Type of business | Coverage required at |
|---|---|
| Most employers | 3 or more employees |
| Building or building repair | 2 or more employees |
| Contractor who subcontracts any part of the work | 1 or more employees |
| Subcontractor | 1 or more employees |
The same form says "employee" includes the owner or sole proprietor, partners who work full time for the partnership, full-time staff, part-time staff and volunteers. That's why a two-person shop with a part-time helper can cross the line faster than its owner expects.
Who the law doesn't cover
The Commission's questions-and-answers brochure for workers lists the exceptions:
- Agricultural farm labor
- Domestic help
- Nonprofit, religious, charitable or relief organizations
- Personnel covered only by federal law, such as railroad and maritime workers
- Businesses with two or fewer employees, which may not be covered
Being exempt doesn't stop you from buying a policy voluntarily.
Two felonies contractors should know
Form AR-A states that it's a felony for any employer or contractor to:
- Make an employee or sub-subcontractor pay for, or contribute to, workers' comp coverage.
- Force an employee or subcontractor to get a Certificate of Non-Coverage.
Pressuring a small sub to "go get the certificate" is exactly what the form prohibits.
The Certificate of Non-Coverage
A Certificate of Non-Coverage is how a one-person business documents that it carries no workers' comp policy. The application goes to the Commission with a notarized certificate and a $50 check or money order, and the Commission says it responds within ten working days. If the business employs others, the application is rejected unless the agent shows coverage is in place.
Form A has limits. It isn't how corporations, corporate officers, sole proprietors, partners or LLC members exclude themselves from an existing policy. The Commission notes that officer exclusions go through the agent or insurance carrier.
What injured workers receive
According to the brochure:
- Coverage starts the first minute on the job, with no minimum tenure or wage.
- Temporary total disability pays 66⅔% of the average weekly wage, up to a maximum set by law, and the payments are tax-free.
- The first seven days aren't paid unless disability lasts 14 calendar days. If it does, benefits run from the day after the injury.
- A claim must be filed within two years of the injury, or one year from the last compensation payment.
The current system dates to an initiated act in 1939, reformed by Act 796 of 1993.
If a required employer has no policy
The brochure tells workers that if an employer required to carry coverage has neither a policy nor self-insurer approval, they can still file a claim with the Commission or sue the employer in circuit court. The Commission's Basic Facts page also warns of penalties and the loss of the law's protections. A lawsuit puts fault and damages before a jury.
Ways to get covered
- A private policy through a licensed agent. This is the most common route.
- Self-insurance, with Commission approval.
Ask how officer, part-time and subcontractor payroll will be treated at the year-end audit.
Quick scenarios
A roofing company with an owner and one helper. That's two people in building repair, so coverage is required.
A three-person nonprofit food pantry. Charitable organizations are outside the act. Buying coverage is still worth weighing.
A solo electrician subbing for a GC. No employees means no requirement for the electrician. Hiring a single helper changes that, because subcontractors trigger the rule at one employee.
Bottom line
In Arkansas, the threshold depends on your trade. Count the owner and part-timers, and never push a sub into a non-coverage certificate. See our workers' compensation insurance overview.
Talk to Alishahi Insurance or call (877) 711-4545. More on insurance in Arkansas.
Frequently asked questions
How many employees before workers' comp is required in Arkansas?
Three for most employers, two in building or building repair, and one for contractors who subcontract and for subcontractors.
Does the owner count as an employee in Arkansas?
Yes. The Commission's Form A counts owners, sole proprietors, full-time partners, part-time workers and volunteers.
Are farms exempt from workers' comp in Arkansas?
Agricultural farm labor is outside the Arkansas Workers' Compensation Law, as are domestic help and nonprofit charitable employers.
What is a Certificate of Non-Coverage in Arkansas?
A Commission document for businesses with no employees that carry no policy. It costs $50 and takes about ten working days.
Can an injured worker sue an uninsured Arkansas employer?
Yes. The worker can file with the Commission or sue the employer in circuit court.
Alishahi Insurance · 439 N Canon Dr, Penthouse, Beverly Hills, CA 90210 · (877) 711-4545 · CA License #4348151. General information only. This isn't legal, tax or financial advice or a coverage determination. Coverage depends on policy language and underwriting, and rules vary by state.