Arkansas Code
Subchapter 4 - Employer Liability — Insurance
§ 11-9-402. Liability of prime contractors and subcontractors — Sole proprietorships or partnerships

(a) Where a subcontractor fails to secure compensation required by this chapter, the prime contractor shall be liable for compensation to the employees of the subcontractor unless there is an intermediate subcontractor who has workers' compensation coverage.
(b)
(1) Any contractor or the contractor's insurance carrier who shall become liable for the payment of compensation on account of injury to or death of an employee of his or her subcontractor may recover from the subcontractor the amount of the compensation paid or for which liability is incurred.
(2) The claim for the recovery shall constitute a lien against any moneys due or to become due to the subcontractor from the prime contractor.
(3) A claim for recovery, however, shall not affect the right of the injured employee or the dependents of the deceased employee to recover compensation due from the prime contractor or his or her insurance carrier.

(c)
(1)
(A) When a sole proprietorship or partnership fails to elect to cover the sole proprietor or partners under this chapter, the prime contractor is not liable under this chapter for injuries sustained by the sole proprietor or partners if the sole proprietor or partners are not employees of the prime contractor.
(B)
(i) A sole proprietor or the partners of a partnership who do not elect to be covered by this chapter and be deemed employees thereunder and who deliver to the prime contractor a current certification of noncoverage issued by the Workers' Compensation Commission shall be conclusively presumed not to be covered by the law or to be employees of the prime contractor during the term of his or her certification or any renewals thereof.
(ii) A certificate of noncoverage may not be presented to a subcontractor who does not have workers' compensation coverage.
(iii) This provision shall not affect the rights or coverage of any employees of the sole proprietor or of the partnership.

(2) Furthermore, the prime contractor's insurance carrier is not liable for injuries to the sole proprietor or partners described in this section who have provided a current certification of noncoverage, and the carrier shall not include compensation paid by the prime contractor to the sole proprietor or partners described above in computing the insurance premium for the prime contractor.
(3)
(A) Any prime contractor who after being presented with a current certification of noncoverage by a sole proprietor or partnership nonetheless compels the sole proprietor or partnership to pay or contribute to workers' compensation coverage of that sole proprietor or partnership shall be guilty of a Class D felony.
(B) Furthermore, any prime contractor who compels a sole proprietor or partnership to obtain a certification of noncoverage when the sole proprietor or partnership does not desire to do so is guilty of a Class D felony.
(C) Furthermore, any applicant who makes a false statement when applying for a certification of noncoverage or any renewals thereof shall be guilty of a Class D felony.

(d)
(1) A certification of noncoverage issued by the commission after July 1, 2001, shall be valid for two (2) years after the effective date stated thereon. Both the effective date and the expiration date must be listed on the face of the certificate by the commission. The certificate must expire at midnight two (2) years from its issue date, as noted on the face of the certificate.
(2) Any certification of noncoverage that is in effect on July 1, 2001, shall expire as follows:
(A) A certification of noncoverage issued in the years 1993 or 1994 shall expire at midnight on September 30, 2001;
(B) A certification of noncoverage issued in the years 1995 or 1996 shall expire at midnight on December 31, 2001;
(C) A certification of noncoverage issued in the years 1997 or 1998 shall expire at midnight on March 31, 2002; and
(D) A certification of noncoverage issued in the years 1999 or 2000 shall expire at midnight on June 30, 2002.

(3) The commission may assess a fee not to exceed fifty dollars ($50.00) with each application for a certification of noncoverage or any renewals thereof.
(4) Any certification of noncoverage issued by the commission shall contain the social security number and notarized signature of the applicant. The notarization shall be in a form and manner prescribed by the commission.
(5) The commission may prescribe by rule forms and procedures for issuing or renewing a certification of noncoverage.