Guide to Firing Employees in Arkansas for Employers

March 25th 2024

Firing an employee in Arkansas is a crucial yet often challenging aspect of running a business. Employers in Arkansas must adhere to specific laws and regulations governing the process of employee termination to ensure compliance and mitigate potential legal risks.

This guide serves as a comprehensive resource for employers in Arkansas. By taking advantage of the insights provided in this guide, employers can navigate the challenges of employee termination with confidence.

This firing guide covers:

What Does Firing an Employee in Arkansas Involve?
Differentiating between Firing, Layoffs, and Resignations in Arkansas
Why Does a Well-Planned Termination Process Matter in Arkansas?
Termination Laws in Arkansas: What You Need to Know
Legal Implications of Wrongful Termination in Arkansas
Required Documents for Employers and Terminated Employees in Arkansas
Who is Responsible for Firing Employees in Arkansas?
How Long is the Termination Process in Arkansas?
How Can You Prepare for Termination in Arkansas?
Steps for a Respectful Termination Process in Arkansas
Post-Termination: What Happens Next After Terminating an Employee in Arkansas?
Legal Considerations During Termination in Arkansas
Bonus: Best Practices for Reducing Litigation Risks in Arkansas

What Does Firing an Employee in Arkansas Involve?

Firing an employee in Arkansas involves understanding and adhering to the state’s employment laws, which primarily follow the principles of at-will employment. Employers must ensure they have valid reasons for termination that do not violate anti-discrimination laws or breach of employment contract.

Differentiating between Firing, Layoffs, and Resignations in Arkansas

In Arkansas, distinctions exist between firing, layoffs, and resignations, each carrying unique legal and practical implications for employers and employees:

Firing in Arkansas

In Arkansas, firing refers to the termination of an employee’s employment by the employer for various reasons, such as poor performance, misconduct, or violations of company policies. Employers must ensure that the termination decision is in compliance with state and federal anti-discrimination laws and there is proper documentation to support the decision.

Layoffs in Arkansas

Layoffs in Arkansas involve the termination of employees due to reasons beyond their performance, such as economic downturns, restructuring, or the elimination of specific positions. Employers must follow state and federal laws regarding notice periods, severance pay, and any collective bargaining agreements that may apply.

Resignations in Arkansas

Resignations in Arkansas occur when an employee voluntarily decides to end their employment with a company. Employees typically provide notice to their employer in advance, as stipulated by company policy or employment contracts. Employers should handle resignations professionally and may conduct exit interviews to gather feedback and ensure a smooth transition for both parties.

Why Does a Well-Planned Termination Process Matters in Arkansas?

A well-planned termination process is essential in Arkansas for several reasons:

  • Legal Compliance: Like all states in the United States, Arkansas has laws and regulations governing employment termination. A well-planned process ensures that employers adhere to these legal requirements, reducing the risk of lawsuits or legal disputes. Employers can demonstrate compliance with state and federal laws by documenting performance issues, following company policies, and providing necessary notifications.
  • Risk Mitigation: Terminating an employee without proper planning can expose employers to legal risks. A structured termination process involves fair evaluations, clear communication, and documentation of termination reasons and helps mitigate these risks by providing a defensible position if legal challenges arise.
  • Employee Morale and Retention: Mishandled terminations can have negative repercussions on employee morale and retention. A well-planned process demonstrates fairness, transparency, and respect for employees, even in difficult circumstances. This can help maintain morale among remaining staff members and preserve the employer’s reputation as an equitable and responsible work environment.
  • Organizational Stability: Sudden or poorly executed terminations can disrupt workflow, morale, and productivity within an organization. A well-planned termination process minimizes these disruptions by allowing for smooth transitions, adequate knowledge transfer, and the opportunity to address any resulting gaps in staffing or expertise.
  • Reputation Management: How an organization handles terminations can impact its reputation internally and externally. A well-planned process is characterized by professionalism, empathy, and adherence to legal and ethical standards, which should reflect the organization’s values and culture. This can enhance employer branding, attract top talent, and foster positive relationships with clients, customers, and the community.

Termination Laws in Arkansas: What You Need to Know

Here are the key federal and state laws concerning termination in Arkansas:

  • Title of the Civil Rights Act of 1964: This federal law prohibits employers from terminating employees based on race, sex, religion, or national origin.
  • Age of Discrimination in Employment Act (ADEA): The ADEA protects individuals who are 40 years of age or older from employment discrimination based on age.
  • Americans with Disabilities Act (ADA): The ADA prohibits discrimination against individuals with disabilities in various aspects of employment, including termination.
  • Family Medical Leave Act (FMLA): The FMLA provides eligible employees with unpaid, job-protected leave for specified family and medical reasons, which may affect termination decisions.
  • Arkansas Civil Rights Act of 1993: This state-specific law prohibits employment discrimination based on race, religion, gender, age, disability, and other protected characteristics within the state of Arkansas.
  • Arkansas Unemployment Insurance Law: This law governs unemployment benefits for eligible individuals who have lost their jobs through no fault of their own, providing guidelines for termination and eligibility.
  • Arkansas Worker Adjustment and Retraining Notification (WARN) Act: Modeled after the federal WARN Act, Arkansas has its own version of the law that requires employers to provide advance notice to employees in the event of plant closings or mass layoffs. This law applies to employers with 100 or more employees.
  • Payment on Discharge: Arkansas has regulations that specify the timeframe within which final wages must be paid to employees upon termination. Generally, employers must pay all final wages owed to an employee by the next regular payday following their termination.

Wrongful termination in Arkansas can have legal implications for employers, which could lead to costly litigation and damage to the organization’s reputation. Key legal implications include:

  • Wrongful Termination Claims: Those employees who believe they have been wrongfully terminated can file lawsuits against their former employers.
  • Breach of Contract Claims: If an employer terminates an employee in violation of an employment contract, the employee may file a lawsuit. This could occur if the termination violates terms outlined in an individual employment contract, collective bargaining agreement, or company policy manual.
  • Retaliation Claims: Terminating an employee in retaliation for engaging in protected activities (e.g., whistleblowing or participating in investigations) is illegal. Employees who believe they have been terminated by retaliation can file claims.
  • Anti-Discrimination Lawsuits: If an employee alleges that their termination was based on discrimination, they may file a lawsuit. Employers who are proven liable for discrimination may face damages (e.g., back pay, front pay, reinstatement, compensatory damages, punitive damages, and attorney’s fees).
  • Damages and Legal Costs: Lawsuits can result in financial liabilities for employers, including damages awarded to the plaintiff and legal costs associated with defending against the claims. Other than financial damages, litigation costs time and resources, diverting focus from core business activities.

Required Documents for Employers and Terminated Employees in Arkansas

In Arkansas, employers and terminated employees have specific documentation requirements to fulfill.

Employers’ Requirements

  • Termination Notice or Letter: A written termination notice or letter to the employee outlining the reason for termination, effective date, and any relevant details regarding final pay and benefits.
  • Final Paycheck: Employers must provide the employees final wages within the next scheduled pay period. The final paycheck should include the accrued vacation or sick leaves.
  • COBRA Notices: If applicable, employers should provide employees with information about their rights to continue health insurance under COBRA, how to elect COBRA, and other related documents. The Consolidated Omnibus Budget Reconciliation Act (COBRA) allows terminated employees to continue their health insurance coverage at their expense.
  • Unemployment Insurance Information: Employers should provide terminated employees with information on how to file unemployment benefits in Arkansas, including details on eligibility criteria and the process of submitting claims.
  • References and Recommendations: Employers should offer terminated employees assistance with job placement, including providing references or recommendations upon request, to facilitate their transition to new employment opportunities.

Terminated Employees’ Requirements

  • Severance Agreement: The employee should review any severance agreement offered by the employer carefully. It is important that the employee should understand the terms and conditions outlined in the agreement before signing.
  • Exit Interviews: Employees are encouraged to participate in exit interviews if requested by the employer. Exit interviews allow the departing employee to provide constructive feedback about the reasons for termination and suggestions for improvement.
  • Return of Company: Return any company-owned property (e.g., keys, access badges, laptops, mobile devices, and other equipment provided by the employer).
  • Continuation of Benefits: If an employee is eligible, they can elect to continue health insurance coverage under COBRA and comply with the required premium payments and enrollment procedures.
  • Unemployment Benefit Claims: File for unemployment benefits promptly following termination. Employees can provide accurate information to the Arkansas Department of Workforce Services and comply with any additional requirements or requests for documentation.

Who is Responsible for Terminating in Arkansas?

In Arkansas, the responsibility for firing employees falls on a combination of Human Resources (HR), managers or supervisors, and legal counsel. Each of them has distinct roles and responsibilities:

Role and Responsibilities of Human Resources 

HR departments or professionals are often responsible for overseeing and facilitating the termination process. They ensure compliance with company policies, state and federal laws, and best practices. HR responsibilities include:

  • Guiding managers or supervisors on proper termination procedures, including documentation and legal requirements.
  • Conducting or overseeing exit interviews to gather feedback from departing employees and identify any potential concerns or areas for improvement.
  • Managing administrative tasks related to termination, such as processing final paychecks, coordinating benefits continuation, and retrieving company property.
  • Maintaining records of termination documentation and ensuring compliance with recordkeeping requirements.

Role and Responsibilities of Managers

Managers or supervisors directly oversee the daily performance of employees and are often involved in the decision-making process leading to termination. Managers are responsible for:

  • Identifying performance issues or misconduct that may warrant termination and documenting incidents or disciplinary actions taken.
  • Consulting with HR and/or legal counsel to ensure compliance with company policies and legal requirements.
  • Conducting termination meetings with employees respectfully and professionally, providing clear explanations for the decision, and offering support or resources as needed.
  • Collaborating with HR to facilitate a smooth transition for the departing employee and remaining team members.

Role and Responsibilities of Legal Counsel

Legal counsel provides guidance and expertise to ensure that termination decisions and procedures comply with applicable laws and minimize legal risks. The responsibilities of a legal counselor include the following:

  • Advising HR and management on the legal implications of termination decisions, including potential claims of wrongful termination, discrimination, or retaliation.
  • Reviewing termination documentation, such as termination letters or severance agreements, to ensure legal compliance with contractual obligations.
  • Providing representation and defense in the event of legal disputes or challenges arising from terminations.
  • Offering training to HR and management on relevant employment laws and best practices to mitigate legal risks associated with terminations.

How Long is the Termination Process in Arkansas?

The duration of the termination process in Arkansas can vary depending on factors (e.g., reason for termination, company policies, and individual circumstances). Generally, the termination process includes these steps, which may span a few days to several weeks:

  • Preparation and Evaluation: This phase involves identifying the need for termination, gathering documentation of performance issues or misconduct, and consulting with HR and legal counsel to ensure compliance with company policies and legal requirements. Depending on the complexity of the situation, this phase may take anywhere from a few days to a couple of weeks.
  • Notification and Meeting: Once the termination decision has been made, the employee is notified of the termination and a termination meeting is scheduled. The length of notice provided to the employee may vary depending on company policies, contractual obligations, or legal requirements. Generally, termination meetings are relatively brief, lasting from 30 minutes to an hour.
  • Transition and Administrative Tasks: Following the termination meeting, administrative tasks may be completed (e.g., processing the final paycheck, coordinating benefits continuation, collecting company property, and updating internal records). This phase may take several days to finalize, depending on the volume of administrative tasks and the efficiency of the HR department.
  • Exit Interviews and Feedback: Some employers conduct exit interviews to gather feedback from departing employees and identify any areas for improvement within the organization. The duration of interviews can last around 30 minutes to an hour per employee.

How Can You Prepare for Termination in Arkansas?

Preparing for termination in Arkansas involves several key steps to ensure compliance with state and federal laws while minimizing legal risks and maintaining professionalism. Here’s how employers can prepare:

  • Comply with state and federal laws: Employers must familiarize themselves with federal and state laws governing termination.
  • Establish clear policies and procedures: Employers should develop and implement clear termination policies and procedures that comply with relevant laws and ensure consistency in the termination process. Communicate these policies to all employees and managers.
  • Document performance issues: Maintain detailed records of employee performance, including any disciplinary actions, warnings, or performance evaluations. This documentation can support termination decisions and help defend against potential legal claims.
  • Provide training: Train managers and supervisors on proper termination procedures, including how to conduct termination meetings respectfully and professionally and how to document termination decisions accurately.
  • Consider legal implications: Before terminating an employee, consider the potential legal implications, including wrongful termination claims, discrimination allegations, or retaliation accusations. Consult with legal counsel if necessary to ensure compliance and minimize legal risks.
  • Plan for transition: Develop a plan for transitioning responsibilities and tasks handled by the terminated employee to other team members or hiring replacements if necessary. Ensure a smooth transition to minimize disruptions to operations.
  • Communicate Effectively: When terminating an employee, communicate the decision clearly and respectfully, providing a reason for the termination if appropriate. Offer support and resources, such as information on unemployment benefits and outplacement services.
  • Follow the Final Wage Payments Law: Ensure timely payment of all final wages owed to the terminated employee, including wages, accrued vacation or PTO, and any other compensation as required by state law.

Steps for a Respectful Termination Process in Arkansas

Ensuring a respectful termination process in Arkansas involves thoughtful planning and communication to minimize the impact on the departing employee while upholding professionalism and legal compliance. Here are steps to achieve this:

  • Preparation and Documentation: Before the termination meeting, gather all relevant documentation regarding the employee’s performance, including warnings, evaluations, and any other pertinent information. Employers should ensure that the decision to terminate is based on valid reasons and is consistent with company policies and state laws.
  • Choose a Private Setting: Conduct the termination meeting in a private and confidential setting to respect the employee’s privacy and dignity. Employers should choose a neutral location where interruptions are unlikely, ensuring a conducive environment for open dialogue.
  • Communicate Clearly and Compassionately: Start the meeting by clearly communicating the decision to terminate the employee’s employment. Provide specific reasons for the termination, focusing on performance or behavioral issues rather than personal criticism. Express empathy and compassion while delivering the news.
  • Listen and Address Concerns: Employers should allow the employee to express their thoughts, feelings, and concerns about the termination. Listen actively and respectfully, acknowledging their perspective without becoming defensive. Address any questions or concerns with honesty and transparency.
  • Provide Support and Resources: Employers must offer support to help the employee navigate the transition, such as information on unemployment benefits, outplacement services, or employee assistance programs. Provide assistance in gathering personal belongings and arranging logistics related to the termination.
  • Maintain Confidentiality: Emphasize the importance of confidentiality regarding the termination to protect the employee’s privacy and reputation. Instruct the remaining staff members to refrain from discussing the termination with others unless necessary for business purposes.
  • Handle Logistics Professionally: Address logistical matters related to the termination, such as the return of company property, final paycheck details, and any other administrative tasks, promptly and professionally. Ensure compliance with state laws regarding final wage payments and benefit continuation.
  • Express Gratitude and Respect: Employers should conclude the meeting on a positive note by expressing gratitude for the employee’s contributions to the organization and wishing them well in their future endeavors. Reinforce the value of their past work and acknowledge their positive qualities.

Post-Termination: What Happens After Terminating Employee in Arkansas?

After terminating an employee in Arkansas, employers need to follow some steps to ensure a smooth transition and address various administrative and organizational matters:

  • Final Pay and Benefits: Employers must ensure prompt payment of the terminated employee’s final wages, including any accrued vacation pay or other benefits owed. Provide information on the continuation of health insurance coverage.
  • Return of Company Property: Employees need to return any company-owned property (e.g., access badges, keys, laptops, mobile devices, and other equipment provided by the employer). Employers must confirm that all company property has been returned.
  • Notification to Staff: Employers have to notify remaining staff members about the termination, ensuring transparency while respecting the terminated employee’s privacy. Any changes in responsibilities or workflow must be communicated to avoid disruption of business operations.
  • Documentation and Recordkeeping: Maintain detailed documentation of the termination, including the reasons for termination, any disciplinary action taken, and communications with the terminated employee. Keep records in compliance with legal and regulatory requirements.
  • Exit Interviews: Employers must conduct exit interviews with the departing employee to gather feedback on their experience with the organization and identify any areas for improvement. Use the feedback to update organizational practices and policies.
  • Transition Planning: Employers should create a transition plan to redistribute the terminated employee’s responsibilities among remaining employees or to recruit a replacement if necessary. It is important that all essential tasks and projects are delegated to the newly assigned employee to prevent disruption of workflow.
  • Employee Communication: Employers must communicate with remaining staff members to address any concerns or questions they may have about the termination.
  • Legal Compliance: Employers need to comply with all legal requirements related to termination, including providing information on unemployment benefits and complying with any collective bargaining agreements and contractual obligations.
  • Maintain Positive Workplace Culture: Employers should reinforce a positive workplace culture by fostering open communication, providing support to remaining staff members, and addressing any morale issues that may arise as a result of the termination.
  • Review and Learn: After the termination process is complete, employers should conduct a review to assess the effectiveness of the termination process and identify any areas for improvement. Use this feedback to refine termination procedures and practices for future instances.

Legal Considerations During Termination in Arkansas

During termination in Arkansas, employers must understand the legal considerations to ensure compliance with state and federal laws while minimizing the risk of legal disputes. Some key legal considerations include:

  • At-Will Doctrine: Arkansas follows the “at-will” employment, allowing employers to terminate employees at any time for any legal reason and without prior notice.
  • Anti-Discrimination Laws: Employers must comply with federal and state laws governing anti-discrimination. Terminations based on protected characteristics are prohibited.
  • Final Paycheck: Arkansas law requires employers to promptly pay employees their final wages upon termination. The final paycheck should include all accrued wages, vacation pay, or other compensation owed to the employee.
  • Unemployment Benefits: Employees terminated through no fault of their own may be eligible for unemployment benefits in Arkansas. Employers must provide accurate information to the state’s Department of Workforce Services regarding the reason for termination.
  • Advance Notice: While Arkansas law does not require advance notice of termination, employers may have contractual obligations or company policies requiring notice periods. Moreover, in certain situations like mass layoffs may need advance notice requirements under federal WARN Act.
  • Documentation: Employers should maintain detailed documentation of the reasons for termination, including performance evaluations, disciplinary actions, and any correspondence related to the termination decision. Documentation can help demonstrate compliance with legal requirements and protect against potential legal claims.
  • Severance Agreements: Employers who offer severance packages to terminated employees should ensure that the agreements comply with applicable laws. The several agreements must be drafted carefully to protect the employer’s interests.
  • Retaliation: Termination of employment based on retaliation is illegal. Employees must have the right to file complaints or participate in investigations. Employers must ensure that the termination decision is based on legitimate business reasons and not retaliatory motives.

Bonus: Best Practices for Reducing Litigation Risks in Arkansas

Employers in Arkansas can reduce litigation risks during the termination process by implementing these best practices:

  • Document Everything: Employers must maintain thorough and accurate documentation related to employee performance, disciplinary actions, and termination decisions. Documenting the reasons for termination can provide evidence of legitimate business reasons and help defend against potential legal claims.
  • Follow Company Policies and Procedures: Employers must adhere to the established company policies and procedures for disciplinary actions and terminations. Consistency in applying policies can help demonstrate fairness and reduce the risk of discrimination claims.
  • Comply with Employment Laws: Employers need to stay abreast of federal and state employment laws to ensure compliance throughout the termination process.
  • Provide Clear Reasons for Termination: When employers communicate the termination decisions to the employee, they must provide clear and specific reasons for the termination. Avoid ambiguous or vague explanations that could lead to misunderstandings or allegations of discrimination.
  • Offer Severance Packages Carefully: If offering severance packages to terminated employees, the employer must ensure that the severance agreement outlines the terms and conditions to protect the employer’s interests. Consider including a release of claims and consulting with legal counsel to ensure compliance with applicable laws.
  • Conduct Exit Interviews: Employers may conduct exit interviews with departing employees to gather feedback and identify any potential concerns or areas for improvement within the organization. Addressing issues proactively can help reduce the likelihood of litigation and improve employee relations.
  • Train Managers and HR Staff: Employers should provide training to managers and HR staff on proper termination procedures, including how to handle disciplinary actions, termination meetings, and documentation. It is important that all staff members are aware of their responsibilities and legal obligations during the termination process.
  • Seek Legal Guidance When Necessary: Employers should consult legal counsel as needed to address legal issues, review termination decisions, and ensure compliance with applicable laws and regulations.

Final Thoughts

Firing an employee in Arkansas is a crucial step that affects both workers and employers. For employers in Arkansas, familiarizing themselves with these laws and implementing the best practices helps mitigate legal risks, promote fairness and equity in the workplace, and maintain positive employee relations.