Arkansas does not give family members a special pass on workers compensation. A relative you put on payroll to do your regular work is generally an employee like anyone else, so they count toward the size trigger that requires coverage (Arkansas Code section 11-9-102). Being family does not remove them from the count. The trigger itself is three for an ordinary business, two for building work, and one in a subcontracting chain.
Who this is for: Arkansas family businesses, from a husband-and-wife shop to a multi-generation company, deciding whether relatives on the payroll need to be covered.
The short version
- Family employees generally count. A relative doing your regular work for pay is usually an employee toward the trigger.
- There is no blanket family exemption. Arkansas does not automatically exclude relatives the way it excludes some domestic or farm work.
- Owner-relatives follow the owner rules. A spouse who is a partner or LLC member counts as an owner and can file Form AR-A to opt out.
- Under the trigger, you are still exposed. Without coverage, an injured family employee can create a bill or a lawsuit.
- Some family roles are different. Domestic help in a private home and farm labor are excluded; confirm your case with the state.
How family roles are counted
| Family role | Counts toward the trigger? | Notes |
|---|---|---|
| Relative on payroll doing your regular work | Yes | Treated as an employee |
| Spouse who is a co-owner, partner, or member | Yes, as an owner | Can file Form AR-A to opt out and drop off the count |
| Teen child working part-time in the shop | Usually yes | A paid part-time role generally counts |
| Household help in your private home | No | Domestic work is excluded from the Act |
| Farm labor | No | Agricultural farm labor is excluded |
Why family businesses still buy it
Even under the trigger, a workplace injury to a family member is real money. Health insurance may not fully cover an injury that happened at work, and it never replaces lost income. Without a comp policy, that cost lands on the business or the family directly, and a family employee can still bring a claim against you. Many Arkansas family businesses carry coverage before they reach the trigger simply because the people at risk are the people they care about most. To see what it would cost, use our Arkansas cost guide.
Watch the owner-versus-employee line
The detail that trips up family businesses is whether a relative is an owner or an employee. A spouse who is a full-time partner or an LLC member counts as an owner and can file Form AR-A to opt out and drop off the count. A spouse simply drawing a paycheck to run the register is an employee who counts and cannot use that form. If your family setup is a mix, confirm each person's status with the Arkansas Workers' Compensation Commission so your count is right before you assume you are under the line.
A Hot Springs example
Illustrative, not a quote. A Hot Springs family restaurant has two parents who co-own it, one adult child on payroll, and one part-time server. The parents are owners who can file Form AR-A, but the adult child and the server are two employees. For an ordinary business the trigger is three, so with two employees they are just under it, yet the owners still buy a policy because the child and server work around hot equipment, and a burn or a fall would otherwise come out of the family's pocket. See the trade detail on our workers comp for restaurants page.
Real questions Arkansas owners ask
Do I need workers comp for family employees in Arkansas?
Generally yes if they push you to the trigger for your work. Arkansas treats a relative on payroll doing your regular work as an employee, so family members usually count toward the number like anyone else.
Is there a family exemption from workers comp in Arkansas?
No blanket one. Arkansas does not automatically exclude relatives the way it excludes domestic help in a private home or farm labor. A paid family employee in your regular business generally counts.
Does my spouse count toward the trigger?
It depends on their role. A spouse who is a full-time partner or an LLC member counts as an owner and can file Form AR-A to opt out. A spouse who is simply a paid employee counts and cannot use that form.
Does my teenage child working in the shop count?
Usually yes if they are paid to do regular work, even part-time. A paid part-time family role generally counts toward the coverage trigger in Arkansas.
We have two employees including a relative. Do we need coverage?
For an ordinary business the trigger is three, so two employees is under it, but a hurt family employee can still create a large bill or a claim. Building work triggers at two, so check which rule fits your business.
What about household help or farm labor?
Those are excluded. Domestic help in a private home and agricultural farm labor fall outside the Arkansas Act, so a relative doing that kind of work is treated differently from one in your regular business.
Will our health insurance cover a work injury to a family member?
Often not fully. Many health plans limit injuries that happen at work, and they never replace lost wages. That gap is a common reason family businesses carry workers comp even below the trigger.
Why Arkansas owners choose Morrow
- We shop the right market for you. In Arkansas you buy workers comp on the open market from any private insurer licensed in the state, because Arkansas has no state fund, and if no carrier will take you the assigned risk plan run by the rating organization NCCI, the Arkansas Workers' Compensation Insurance Plan, is the guaranteed backstop, so we can shop your rate freely and still cover hard-to-place work.
- We catch pricing mistakes. Your price depends heavily on the category your work falls into for pricing (the class code). Put people in the wrong category and you overpay for years. We review your payroll and classifications before you buy.
- Proof of coverage, fast. Need a certificate (proof of coverage) for a general contractor or a landlord before Monday? We turn those around the same business day for most carriers.
- We help lower the score that drives your price. Insurers give you a score based on your past claims that raises or lowers your cost (the experience modification rate). We review it each year, flag errors, and connect you with return-to-work and safety resources that bring it down.
- Real people when a claim happens. When someone gets hurt, we stay involved through the life of the claim, not just at renewal.
Related Arkansas guides
Every Arkansas business is set up a little differently. These companion guides answer the same question for other situations, plus the national explainers behind the terms used here.
- Business insurance in Arkansas (start here)
- Workers comp: the owner's overview
- I own an LLC: do I need workers comp?
- I'm a sole proprietor: do I need workers comp?
- I own a corporation (C-corp or S-corp): do I need it?
- We're a partnership: do we need workers comp?
- We're a nonprofit: do we need workers comp?
- My workers are 1099: do I still need it?
- Only part-time or seasonal staff: do I need it?
- Remote or out-of-state staff: do I need coverage?
- What happens if I don't carry workers comp?
- How much does workers comp cost?
- How do I get workers comp (even if turned down)?
- What insurance do I need for a contractor license?
- Workers compensation insurance, explained
- What workers comp costs (national guide)
- Do sole proprietors need workers comp?
- Hiring your first employee: what changes
- Arkansas restaurant workers comp
This guide is general information, not legal advice. Arkansas rules and penalty amounts can change, so verify current requirements with Arkansas Workers' Compensation Commission or a licensed advisor before you rely on them. Last updated: July 2026.