Arkansas Independent Contractor Agreement Template
Arkansas legislated worker classification into a single answer, so one federal test decides unemployment insurance, workers compensation, and minimum wage alike.
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Introduction
An Independent Contractor Agreement is a contract between a business and a self-employed worker covering scope, payment, ownership of the work product, and how the engagement ends. Arkansas requires nothing in particular of it. There is no prescribed form, no mandatory clause, no disclosure wording, no notarization, and no presumption that turns on what the document says. What makes Arkansas worth a separate page is the opposite of a drafting rule: the state has collapsed worker classification into a single test that applies across the board. The Empower Independent Contractors Act of 2019, at Ark. Code Ann. 11-1-201 through 11-1-204, directs every employer and agency deciding employment status under Title 11 to use one federal standard, and Act 743 of 2025 narrowed that reference from the Internal Revenue Service twenty factor revenue ruling to the federal common law employee regulation at 26 C.F.R. 31.3121(d)-1, pinned to the version in force on January 1, 2025. Unemployment insurance, workers compensation, and the minimum wage exclusion all run through it. Almost no other state answers the classification question the same way for all three acts, which means a business operating in Arkansas gets one analysis instead of three. It also means Arkansas has no ABC test anywhere, despite what a good many national comparisons still say.
Key Things to Know
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Arkansas applies the same classification test to all three of the acts a business usually worries about. Ark. Code Ann. 11-1-204 provides that an employer or agency charged with determining the employment status of an individual shall use the factors enumerated by the Internal Revenue Service in 26 C.F.R. 31.3121(d)-1, as it existed on January 1, 2025. That is unusual: most states run separate standards for unemployment insurance, workers compensation, and wage claims.
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Arkansas is not an ABC test state and has not been since Act 1055 of 2019. The ABC formulation no longer appears in the unemployment statute, and neither does the old burden-shifting language about proof to the satisfaction of the Director. National summaries that list Arkansas among the ABC states are out of date, and the difference is material because an ABC test would put the whole burden on the hiring business.
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Act 743 of 2025 narrowed the reference a second time. The statute previously pointed to the Internal Revenue Service twenty factor test in Revenue Ruling 87-41. The 2025 amendment replaced that with the federal common law employee regulation and fixed it to the version in force on January 1, 2025, so a later federal amendment does not move the Arkansas standard on its own.
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Unemployment insurance runs through the same door. Ark. Code Ann. 11-10-210(e) provides that service performed by an individual for an employer for wages in a lawful business, industry, trade, profession, or enterprise, where the employment status has been determined by consideration of the factors required by the Empower Independent Contractors Act of 2019, is deemed to be employment under the chapter. There is no presumption running in either direction.
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Workers compensation writes the same test into its own definition. Ark. Code Ann. 11-9-102(9)(A) defines an employee as an individual in the service of an employer under a contract of hire or apprenticeship, written or oral, expressed or implied, whose employment status has been determined by consideration of the factors required by the Empower Independent Contractors Act. Because that clause was grafted onto the end of a pre-existing broad definition, a written agreement does not by itself take a worker outside it.
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The minimum wage act uses the same standard by cross-reference rather than by stating a test. Ark. Code Ann. 11-4-203(2)(E) excludes any bona fide independent contractor from the definition of employee, and the act does not define the term. Ark. Code Ann. 11-1-203 and 11-1-204 are both drafted to reach the whole title, so the federal common law factors fill that gap.
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There is no Arkansas document mandate. The state prescribes no contract form, no required contract terms, no disclosure wording, and no signature or notarization requirement, and conditions no presumption on what the contract says. A written agreement is still worth having for scope, payment, and ownership of the work product, and it counts as evidence within the factor analysis, but it carries no special statutory weight.
Key decisions before you file
Before you file a Independent Contractor Agreement in Arkansas, a few decisions shape the document: which option to choose and what each one means. The Independent Contractor Agreement guide walks through them.
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Arkansas Requirements for Independent Contractor Agreement
For purposes of Title 11, an employer or agency charged with determining the employment status of an individual shall use the factors enumerated by the Internal Revenue Service in 26 C.F.R. 31.3121(d)-1, as it existed on January 1, 2025. The reference is fixed to that date, so subsequent federal amendments do not automatically change the Arkansas standard, and the same factors apply whichever act is being administered.
Service performed by an individual for an employer for wages in a lawful business, industry, trade, profession, or enterprise, where the employment status has been determined by consideration of the factors required by the Empower Independent Contractors Act of 2019, is deemed to be employment under the chapter. The ABC formulation repealed by Act 1055 of 2019 no longer appears, and no statutory presumption or burden-shifting clause remains.
Employee means an individual in the service of an employer under a contract of hire or apprenticeship, written or oral, expressed or implied, whose employment status has been determined by consideration of the factors required by the Empower Independent Contractors Act of 2019. Because the classification requirement was appended to a pre-existing broad definition, executing a written agreement does not by itself take the worker outside the definition.
The Arkansas Minimum Wage Act excludes any bona fide independent contractor from the definition of employee but does not define the term. Ark. Code Ann. 11-1-203 defines employment status for the whole title, and 11-1-204 commands the use of the federal common law factors for purposes of the title, so the same standard supplies the content of the exclusion.
Arkansas conditions no exclusion, presumption, or safe harbor on the existence or the content of a written independent contractor agreement. There is no prescribed form, no mandatory recital, no typography rule, and no notarization or filing requirement. The agreement should therefore be drafted to record the facts the federal common law factors examine, and to match how the engagement is actually run.
The stated purpose of the subchapter is to help employers create jobs, help individuals return to work and no longer need public assistance, and grow the economy. A purpose clause does not decide a case, but it is part of the interpretive context for the classification provisions that follow and is worth knowing where the question is genuinely close.
Frequently Asked Questions
No. Act 1055 of 2019 removed the ABC formulation from the unemployment statute, and it has not been reinstated. Classification is decided under the Empower Independent Contractors Act of 2019, which directs the use of the federal common law employee factors. Arkansas is still listed as an ABC state in some national comparisons, and that is worth correcting before relying on it, because the burden of proof falls very differently under the two approaches.
Ark. Code Ann. 11-1-204 requires an employer or agency determining employment status to use the factors enumerated by the Internal Revenue Service in 26 C.F.R. 31.3121(d)-1, as that regulation existed on January 1, 2025. Act 743 of 2025 put that reference in place of the earlier reference to the Internal Revenue Service twenty factor revenue ruling, and the fixed date means later federal changes do not automatically alter the state standard.
Yes, which is unusual. Ark. Code Ann. 11-10-210(e) routes unemployment insurance through the Empower Independent Contractors Act factors, 11-9-102(9)(A) writes the same requirement into the workers compensation definition of employee, and the minimum wage act at 11-4-203(2)(E) excludes any bona fide independent contractor without defining the term, leaving the title-wide provisions in 11-1-203 and 11-1-204 to supply the standard.
No. There is no statutory requirement for a written contract, no prescribed form or wording, no disclosure clause, and no notarization or filing requirement. A written agreement is the practical way to fix scope, payment terms, and ownership of the work product, and it is evidence within the factor analysis, but Arkansas attaches no presumption or safe harbor to having one.
No. Ark. Code Ann. 11-9-102(9)(A) defines an employee to include a person in the service of an employer under a contract of hire, written or oral, expressed or implied. The classification clause was added to the end of that definition rather than replacing it, so the existence of a written contract does not remove the worker from the definition. What decides the question is how the relationship works when the federal common law factors are applied to it.
Not by statute. The unemployment provision no longer contains the burden-shifting language it once had, and neither the minimum wage act nor the workers compensation definition creates a presumption. The factors are applied neutrally. That is a meaningful difference from states where the hiring business must affirmatively establish every prong of a statutory test before contractor status is recognized.
The facts the federal common law factors examine, and consistency between the document and the practice. Recording that the contractor controls the means and methods of the work, works for other clients, supplies the tools, bears profit and loss, and is paid a contract amount rather than a wage is useful only where the engagement is actually run that way. Classification is fact dependent, and attorney review is an option where the exposure is significant.
No. The Arkansas standard points at a federal common law regulation, but federal wage and hour claims under the Fair Labor Standards Act are decided under the economic realities analysis, which asks a broader question about economic dependence. A determination that satisfies the Arkansas test therefore does not resolve a federal overtime or minimum wage claim arising from the same facts.