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Arkansas PEO Laws: Registration, Bonding and Payroll Requirements

Arkansas licenses PEOs through the Arkansas Insurance Department under Ark. Code 23-92-401 et seq., requiring a $100,000 surety bond, reducible to $35,000 after three years, with biennial renewal and an ESAC-accredited exemption. SUI applies to the first $7,000 of wages at 2.0% for new employers. Minimum wage is $11.00; no state fund or paid-leave mandate.

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Arkansas: PEO regulatory and payroll facts. Each populated field links to the statute, agency page or filing it came from.
PEO registration or licensing requiredYes - PEOs must be licensed under the Arkansas Professional Employer Organization Recognition and Licensing Act, Ark. Code 23-92-401 et seq., administered by the Arkansas Insurance Department (limited exemption for qualifying out-of-state PEOs with 100 or fewer covered employees) source (opens in new window)
Regulating agencyArkansas Insurance Department source (opens in new window)
Bond or security requirement$100,000 surety bond; reducible to $35,000 after three years of timely contributions for bonded lessor employers; ESAC-accredited PEOs are exempt from the bond source (opens in new window)
Registration renewal cycleBiennial - standard applications and renewals are filed biennially source (opens in new window)
SUI taxable wage base$7,000 per employee per calendar year (2026) source (opens in new window)
New-employer SUI rate2.0% for 2026 (experienced employer range 0.200%-5.100%, plus 0.200% stabilization rate) source (opens in new window)
State workers' comp fundNo - the Arkansas Workers' Compensation Commission is not an insurance company; covered employers secure coverage from commercial carriers or through approved self-insurance programs source (opens in new window)
State paid leave mandateNo - no state paid sick leave or other paid leave mandate source (opens in new window)
State minimum wage$11.00 per hour (2026) source (opens in new window)
PEO SUI reporting basisHybrid - bonded lessor employers report wages for new clients on separate client accounts for three years, then report all wages under the lessor's own account number and assigned rate source (opens in new window)

Sources

What we know about Arkansas

Arkansas licenses professional employer organizations under the Arkansas Professional Employer Organization Recognition and Licensing Act, Ark. Code Ann. 23-92-401 et seq., administered by the Arkansas Insurance Department. The Department's Professional Employer Organizations page states that the statute, together with the Employer Service Assurance Organizations Rule at 23 CAR pt 32, establishes licensing requirements, and that PEOs accredited by ESAC, an employer service assurance organization licensed in Arkansas, are exempt from submitting the required $100,000 bond and from filing the standard application and biennial renewal forms, receiving a 50 percent reduction in the associated fees. Section 23-92-404 of the code provides a further exemption for PEOs domiciled outside Arkansas that are licensed in a state with comparable requirements, maintain no office in the state, and have one hundred or fewer covered employees in Arkansas. Licenses and renewals follow a biennial cycle.

For unemployment insurance, the Arkansas Division of Workforce Services lists the 2026 taxable wage base at $7,000 per employee and the new employer tax rate at 2.0 percent, with experienced employer rates ranging from 0.200 percent to 5.100 percent plus a 0.200 percent stabilization rate. The Division's lessor employing unit guidance explains the hybrid reporting model that applies to PEOs: a lessor employer that posts a $100,000 surety bond may, after three years of timely contributions, request a reduction of the bond to $35,000, and bonded lessor employers report wages for new clients on separate client accounts for three years, after which they report all wages under the lessor's own account number and assigned rate. A lessor that has not posted the bond must submit separate quarterly contribution and wage reports for each client.

Arkansas's minimum wage is $11.00 per hour, as shown in the U.S. Department of Labor's consolidated minimum wage table. The state has no paid sick leave or other paid leave mandate; it does not appear among the jurisdictions with paid sick leave laws compiled in the Congressional Research Service report on paid sick leave. Arkansas also has no state workers' compensation fund. The Arkansas Workers' Compensation Commission states that it is not an insurance company and that it enforces the workers' compensation laws by ensuring that all covered employers secure insurance coverage from commercial carriers or through self-insurance programs; most employers with three or more employees are required by law to carry coverage, and coverage is purchased by the employer with no part of it paid by employees. The Commission's About Us page reiterates that it administers the law through claim monitoring, self-insurer approvals, and its Special Funds Division.

The Arkansas structure combines a state licensing regime with a separate Division of Workforce Services bond and reporting framework, so a PEO's unemployment insurance obligations depend on whether it has posted the $100,000 surety bond, with the ESAC-accredited path removing both the insurance department bond and the biennial renewal filings for accredited firms.

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