If you have employees working in more than one state, the Arkansas employee separation process may vary from the other states in which you do business. Firing employees without understanding the appropriate procedures could expose your organization to risk.
This employee separation checklist and guide is a quick guide to Arkansas employee termination laws—including final paycheck requirements, separation notices, severance agreements, reporting employee termination, and withdrawing registration to do business in the state.
Arkansas Employee Separation Checklist
- Provide final paycheck
- Issue separation notice
- Execute severance agreement
- Report termination
- Withdraw registration to do business
1. Final Paycheck Requirements in Arkansas
In Arkansas, employees who are terminated must receive their final paycheck by the next regular payday. Although the state does not specify a timeframe for paying employees who resign, it is considered best practice to settle any earned wages either before or on the next scheduled payday.
Employers are required to pay all wages due, but they are not obligated to pay out accrued vacation time unless specified by the employee’s contract or company policy. Arkansas does not mandate the method of delivery for the final paycheck—but it is generally advisable to provide it in the usual manner or by mail if requested.
Employers who fail to pay terminated employees within seven days of the next payday are required to pay double the amount owed.
2. Firing Employees in Arkansas
Arkansas is an at-will employment state. This means employers and employees can terminate the relationship for any reason, as long as it is not illegal or otherwise subject to exceptions.
All employers in Arkansas must provide this notice to employees at the time of separation. The notice describes how the employee can apply for unemployment insurance benefits.
3. Severance Agreements in Arkansas
When creating severance agreements, employers must clearly specify which claims are being waived under both federal and state laws. In Arkansas, this includes claims related to minimum wage, overtime, and the Arkansas Civil Rights Act (Ark. Code Ann. § 16-123-107). Ensure that the agreement only covers claims that arose before the effective date, and does not cover potential future claims.
Additionally, employers should be aware of federal regulations. Recent National Labor Relations Board (NLRB) decisions and guidance from its General Counsel limit the use of non-disparagement and confidentiality clauses in severance agreements.
4. Reporting Employee Termination in Arkansas
If an employee has an Income Withholding for Support Order (IWO), you must promptly report their termination to the child support agency, court, or attorney that issued the IWO. Organizations can register for online reporting with the Federal Office of Child Support Enforcement here.
Alternatively, you can report the termination by completing the Notification of Employment Termination or Income Status section of the IWO and sending it via fax or mail to the issuing child support agency.
You will need the following information:
- Employee Name
- Employee Case Identifier
- Last Known Home Address
- New Employer Address (if known)
- Date of Employee Separation
5. Withdraw Registration to do Business in Arkansas
When an organization ends its operations in Arkansas, it must formally withdraw its registration by submitting the appropriate form(s) to the Secretary of State. This may happen once the last Arkansas employee has separated from the company.
The required forms depend on the type of legal entity involved. For-Profit Corporations must file a Certificate of Withdrawal along with a Final Franchise Tax Report. Limited Liability Companies (LLCs) need to file an Application for Cancellation, also accompanied by a Final Franchise Tax Report. Finally, Non-Profit Corporations must file this Certificate of Withdrawal and the Final Franchise Tax Report.
Stay Compliant with Arkansas Employee Separation Requirements
Staying compliant with state-specific Arkansas Employee Separation Agreement requirements helps you mitigate risk, fulfill employer obligations and respect employee rights.
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Looking for employee separation laws for a different state? Our interactive map makes it easy to find all employee termination requirements by state.
