Reminder: Minimum Wage Increases to $11 Per Hour in 2021

December 31, 2020

Beginning Friday, Jan. 1, 2021, the minimum wage in Arkansas will increase to $11 per hour. In 2018, Arkansas voters approved a ballot initiative to incrementally raise the minimum wage to $11 an hour by 2021. The increase in minimum wage offers employers an opportunity to evaluate their pay practices.

The Arkansas Minimum Wage Act covers employers with 4 or more employees. Employers covered by the federal Fair Labor Standards Act (FLSA) are also covered by the Arkansas law if they have 4 or more employees. An employer covered by both laws must pay the highest minimum wage. In most cases, an employer has to pay overtime (one and one-half times the regular rate of pay) to non-exempt employees for all hours actually worked in excess of 40 hours in a workweek.

 Top 5 Things Employers Need To Do:

  1. Increase hourly wages to at least $11 by January 1, 2021
  2. Ensure that employees’ overtime rates (time and a half) also reflect the minimum wage increase.
  3. If your employees are paid piece-rate or on some basis other than hourly, ensure that their regular rate exceeds the applicable minimum wage.
  4. If you need assistance determining an employee’s regular rate, contact your attorney.

Update the postings in your workplace regarding the Arkansas minimum wage: Click here

 For tipped employees

The minimum cash wage will remain $2.63 for tipped employees. A tipped employee’s total hourly wage should equal $11 beginning January 1, 2021 ($2.63 minimum cash wage + $8.37 tip credit).

Additional Resources:

Click here to view Department of Labor’s Fact Sheet.

Click here to view the Department of Labor's Minimum Wage Rules.

Disclaimer: The information included here is provided for general informational purposes only and should not be a substitute for legal advice nor is it intended to be a substitute for legal counsel. For more information or if you have further questions, please contact one of our Attorneys.