Arkansas Independent Contractors laws & HR compliance analysis

Arkansas Independent Contractors: What you need to know

Whether a worker is an “employee” or an “independent contractor” is critical when it comes to such important issues as pension eligibility, workers' compensation coverage, wage and hour law, and many other matters. In some situations, federal law will govern, but the question is most often resolved by looking to state law, particularly in areas such as unemployment tax liability, workers' compensation, and state wage and hour requirements.
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According to the Empower Independent Contractor’s Act of 2019, Arkansas follows the Internal Revenue Service’s (IRS) 20-factor test to determine whether individuals should be classified as employees or independent contractors:
(1) A person for whom a service is performed has the right to require compliance with instructions, including without limitation on when, where, and how a worker is to work.
(2) A worker is required to receive training, including without limitation, through: (A) working with an experienced employee; (B) corresponding with the person for whom a service is performed; (C) attending meetings; or (D) other training methods.
(3) A worker’s services are integrated into the business operation of the person for whom a service is performed and are provided in a way that shows the worker’s services are subject to the direction and control of the person for whom a service is performed.
(4) A worker’s services are required to be performed personally, indicating an interest in the methods used and the results.
(5) A person for whom a service is performed hires, supervises, or pays assistants.
(6) A continuing relationship exists between a worker performing services and a person for whom a service is performed.
(7) A worker performing a service has hours set by the person for whom a service is performed.

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