What a written policy must say
The Division of Labor will only pursue vacation, sick, holiday or severance pay if the employee provides a company policy stating they will be paid for that type of pay. Without it, the claim may be closed. Source: labor.arkansas.gov↗ (opens in a new tab)
Penalties
If your written policy makes vacation pay owed, it is part of final wages. Paying a discharged employee more than 7 days after the next payday can cost double wages. Source: labor.arkansas.gov↗ (opens in a new tab)
The law and where to check
The law: Ark. Code Ann. § 11-4-405 (final pay; as amended by Act 853 of 2019) (opens in a new tab)
The agency: Arkansas Division of Labor, Labor Standards Section (opens in a new tab)
What federal law says
No federal law requires paid vacation or payout of unused vacation. These are matters of agreement between employer and employee, and state law. Source: U.S. Department of Labor↗ (opens in a new tab)
Vacation and PTO payout checklist for Arkansas employers
A simple order of work, based on the rules above. It is not a legal checklist.
- Read your written vacation or PTO policy against the rules above.
- Make any forfeiture or cap rule clear and in writing, where your state allows it.
- Track each employee's accrued, unused balance.
- When someone leaves, pay any vacation owed with the final paycheck on time.
- Keep a record of the balance paid out.
- See our final paycheck guide for your state's deadline.
More Arkansas employment law guides
- All Arkansas employment laws
- Arkansas final paycheck law
- Arkansas paid sick leave law
- Arkansas meal and rest break laws
- Arkansas overtime law
- Arkansas pay frequency law
- Arkansas new hire reporting
- Arkansas at-will exceptions
Vacation and PTO payout laws in other states
See every state on one page, or pick a state:
- Alabama
- Alaska
- Arizona
- Arkansas
- California
- Colorado
- Connecticut
- Delaware
- District of Columbia
- Florida
- Georgia
- Hawaii
- Idaho
- Illinois
- Indiana
- Iowa
- Kansas
- Kentucky
- Louisiana
- Maine
- Maryland
- Massachusetts
- Michigan
- Minnesota
- Mississippi
- Missouri
- Montana
- Nebraska
- Nevada
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina
- North Dakota
- Ohio
- Oklahoma
- Oregon
- Pennsylvania
- Rhode Island
- South Carolina
- South Dakota
- Tennessee
- Texas
- Utah
- Vermont
- Virginia
- Washington
- West Virginia
- Wisconsin
- Wyoming
Sources
All official government sources, last checked October 19, 2026.
Disclaimer: This guide provides general information based on publicly available official sources and is for information only. It is not legal, tax, payroll or employment-law advice and does not guarantee compliance with federal, state or local requirements. Rules can depend on your location, industry, contracts and other circumstances, and laws change. Always check the official source, the relevant government agency or a qualified professional before making a decision. MadyHR.ai accepts no responsibility for any action taken based on this page.
Last checked: . Every rule and source link on this page was checked against the official government source on this date. Laws change, so always open the source link before you act.