Arkansas MINIMUM WAGES

Arkansas State Minimum Wage for 2025

Effective January 1, 2024, Arkansas increased its minimum wage to $11 per hour for non-tipped employees and $2.63 per hour for tipped employees. This is higher than the federal minimum wage of $7.25 per hour. The state’s laws also mandate employers with 4 or more employees to pay overtime at 1.5 times their standard pay to their employees for every hour worked beyond 40 hours per week. 

Minimum Wages in Arkansas Cities

The list below details minimum wage rate across Arkansas’s cities: 

Threshold for Employees Exempt 

The Fair Labor Standards Act (FLSA) classifies the state workforce as exempt and non-exempt employees based on their compensation structure and work duties. 

• Non-exempt employees are those who are entitled to receive the state minimum wage and overtime pay of 1.5X for hours worked beyond 40 hours per week.  

• Exempt employees are typically those who earn a certain, pre-defined salary. As of July 1, 2024, they must earn a minimum of $43,888 per year ($844 per week) to qualify as exempt employees.  

An increase in Arkansas’s minimum wage directly affects non-exempt employees as their livelihood depends on these wage rates. However, since exempt employees draw a predefined salary every month, they are less affected by the change. Although experts suggest that an increase can act as an incentive for exempt employees to pressure their employers to raise salary thresholds, to: 

• Eliminate wage compression 
• Maintain the necessary gap between exempt and non-exempt categories  

While many states across the United States have set their own salary threshold for exempt employees, Arkansas follows the federal regulations.  

Historical Data of Arkansas Minimum Wages 

The United States established the federal minimum wage in 1938 as part of the Fair Labor Standards Act (FLSA) to ensure fair pay and set a standard of living for all workers. By the 1960s, the value of the minimum wage had eroded due to inflation, and lawmakers failed to increase it sufficiently to match its peak in 1968. 

In 2018, the minimum wage of $7.25 was 14.8% less than when it was last increased in 2009 and 28.6% below its peak value in 1968 after adjusting for inflation. The decline in purchasing power forced low-wage workers to work longer hours to support their families and maintain the same standard of living. 

While the U.S. has seen significant improvements in labor productivity since the 1960s, there was a growing need for more significant steps to raise the minimum wage for the people of Arkansas. On January 16, 2019, the Raise the Wage Act was introduced to increase the state minimum wage to $15 per hour by 2024, in six steps. Starting in 2025, the minimum wage will adjust automatically based on wage growth. The bill also aims to increase the subminimum wage for tipped workers, which has remained unchanged since 1991, until it equals the regular minimum wage. 

The table below shows an incremental increase in Arkansas’ minimum wage increase between 1968 and 2024. 

* – Under the FLSA, the two rates shown in 1968, 1970, and 1976 reflect the former multiple-track minimum wage system in effect from 1961 to 1978. 

** – Applied only to women and minors 

*** – Rates applicable to employers of four or more 

Source: https://www.dol.gov/agencies/whd/state/minimum-wage/history  

Exemptions in Minimum Wages of Arkansas  

• While Arkansas’s minimum wage rules apply to its entire working class, the following exemptions continue to exist: 
  • Tipped workers. 
  • Executive, administrative, and professional (EAP) employees. 
  • Outside commission-paid salespeople. 
  • Full-time students performing services for their respective schools, colleges, or universities are entitled to 85% of the minimum wage rate. 
  • Agriculture workers. 
  • Businesses with less than 3 employees.