How Unemployment Insurance Works in Arkansas

by Ellie Wheeler - March 31, 2020

Arkansas, like all states, offers its own version of unemployment insurance to workers who have lost their jobs. The system of state and federal unemployment insurance is changing in light of the COVID-19 pandemic.

Arkansas and the nation have seen a historic increase in weekly unemployment insurance claims recently as a result of the coronavirus pandemic. Arkansas has already made some changes to make unemployment insurance more readily available to people who are suddenly out of work.

Gov. Asa Hutchinson has announced that he has directed the Arkansas Department of Commerce to waive the one-week waiting period that normally applies to workers seeking to claim unemployment benefits.

The state also made it easier to apply for benefits enabling applicants to apply online. Recent changes at the federal level make it easier for states like Arkansas to increase the number of workers eligible for benefits, extend benefits and increase compensation.  

While unemployment claims data is an important tool for predicting future economic conditions, the policy itself is critical for supporting unemployed workers and families during economic downturns. Unemployment insurance provides temporary cash payments to eligible workers who have been laid off from their jobs. 

Unemployment insurance payments act as an important safety net for employees, who may use some of this money to purchase items at local businesses, which prevent even larger declines in the local economy. This benefit is a program provided through federal and state agencies, but states have flexibility in how it is administered. 

Here are some frequently asked questions about how the unemployment insurance system works in Arkansas: 

How much are weekly payments to workers who have been laid off?

• Unemployment insurance checks are generally half of your normal weekly income (or 1/26 of your average quarterly wage during the past four quarters). If you were making $400 a week before you were laid off, your weekly unemployment insurance check would likely to be around $200. However, weekly benefits may differ for a number of reasons. Weekly payments  are at least $81 and at most $451 a week. 
  

How long can workers collect unemployment insurance payments? 

• Although most states provide 26 weeks of maximum unemployment insurance payments, workers in Arkansas who lose their jobs are be eligible for up to 16 weeks’ worth of benefits.¹ 

Where does the funding for these benefits come from?

• Unemployment insurance is funded through a state trust fund that is supported by payroll taxes, SUTA and FUTA, which are paid by employers. The current tax rate  in Arkansas ranges between 0.1%-6%.

How much is left in the state trust fund that supplies unemployment payments in Arkansas?

• The Arkansas State Trust Fund balance   was approximately $846 million as of January 2020. In 2018, when Arkansas had very low unemployment, the state paid out about $133 million in unemployment insurance payments. This figure is sure to increase with higher rates of unemployment.  
  

Can all types of workers receive unemployment insurance benefits? 

• No. Elected officials, members of a legislative body or judiciary, workers who are self-employed, workers who work part-time or seasonal jobs, and independent contractors are not generally covered by unemployment insurance.  

The unemployment insurance system is designed to be a safety net for individuals and the economy during lean times. States administer their unemployment insurance program within federal guidelines, but there is considerable variation in unemployment insurance systems across the nation. Recently, special adjustments have been made to bolster state unemployment insurance benefits in light of the unprecedented impact that COVID-19 is having on the U.S. economy.  

The recently passed CARES Act impacts the unemployment insurance system in all states by extending benefits to more people and increasing the benefit amount and duration for the next four months. Specifically, the CARES Act:

• Allows states to extend benefits by 13 weeks. In Arkansas this could mean extending the maximum number of weeks’ worth of benefits from 16 to 29.
• Expands who is eligible for unemployment benefits. Many people who would not normally be eligible for unemployment insurance will now be covered under the “Pandemic Unemployment Assistance” program. Changes to federal guidance are also expanding benefits to workers in circumstances including: employees whose place of business has temporarily closed because of COVID-19, employees in quarantine, and workers who leave their job to care for a family member or because of risk of exposure (this addition is federally funded).
• Increases benefits by $600 a week (this addition is federally funded).   

The Arkansas Division of Workforce Services recommends filing a claim online at https://www.ezarc.adws.arkansas.gov/, even if you are unsure if you will qualify in case disaster unemployment benefits become available later.

^{[1] Maximum benefits are described in Arkansas code (A.C.A. § 11-10-504) as “equal to the lesser of: (1) Sixteen (16) times his or her weekly benefit amount; or (2) One-third ( ⅓ ) of his or her wages for insured work in his or her base period.”}