Does Arkansas require severance pay?

No Arkansas statute requires private employers to pay severance. Arkansas has no mini-WARN that would mandate pay-in-lieu of notice. The only layoff-notice regime that carries teeth in Arkansas is federal WARN (29 U.S.C. §§ 2101–2109), which requires 60 days advance notice (or back pay for missed days) at employers of 100+ for covered mass layoffs and plant closings — but WARN mandates notice, not severance. Severance is therefore employer-discretionary in Arkansas unless your employment agreement, written severance plan, or company handbook makes it mandatory. Arkansas is a strong at-will employment state, so the underlying employment relationship is terminable by either party at any time, with or without cause, absent a written contract to the contrary.

Does Arkansas have a mini-WARN statute?

No. Arkansas has no state-level mini-WARN that imposes employer notice obligations independent of federal WARN. The operative regime is federal WARN (29 U.S.C. §§ 2101–2109): 60 days advance notice at employers of 100+ for mass layoffs affecting 50+ at a single site that constitute at least 33% of the active workforce (or 500+ regardless of percentage). Notice goes to affected employees, the Arkansas Division of Workforce Services Rapid Response unit, and the chief elected local official. Federal WARN penalties: back pay and benefits for each day notice was not given (up to 60 days), plus a $500/day civil penalty payable to the local government. Arkansas adds no shorter notice, no lower employer-size trigger, and no statutory severance mandate.

Does OWBPA apply in Arkansas?

Yes. OWBPA is federal (29 U.S.C. § 626(f)) and applies in all states. If you are age 40 or older and your Arkansas employer asks you to sign a waiver of age-discrimination claims under the ADEA in your severance agreement, the waiver is enforceable only if you receive at least 21 days to consider the agreement (45 days for group exits — a 'reduction in force' or 'exit incentive program'), and 7 days after signing to revoke. Group exits additionally require disclosure of the ages and job titles of all selected and non-selected employees in the decisional unit. Arkansas's Civil Rights Act of 1993 (Ark. Code § 16-123-101 et seq.) separately prohibits employment discrimination based on age (40+), but applies only to employers with 9 or more employees — a lower threshold than the federal ADEA's 20-employee minimum. A release of state-law age claims under Arkansas Civil Rights Act does not require OWBPA-compliant 21/45/7 procedures, but the federal ADEA release portion still does.

Can I collect Arkansas unemployment while receiving severance?

It depends on how the severance is structured. Arkansas's unemployment eligibility provisions are at Ark. Code § 11-10-507 (Eligibility conditions) and the disqualifications at § 11-10-513. In practice, the Arkansas Division of Workforce Services (DWS) treats severance pay based on allocation: severance designated as 'wages in lieu of notice' or paid as salary continuation tied to a specific notice period typically offsets UI benefits week-by-week during the allocated period; a lump-sum severance not designated to specific weeks is more likely to be allocated to the separation date rather than spread across subsequent weeks. Practical takeaways: (a) file your AR UI claim with DWS on or shortly after your last day worked at dws.arkansas.gov to establish your benefit year and clear the one-week waiting period; (b) fully disclose the severance amount, structure, and any employer designation when you apply and on weekly certifications — failure to report severance is fraud; (c) confirm the current Arkansas UI maximum weekly benefit amount with DWS before relying on net-of-benefits figures.

Are non-competes enforceable in Arkansas after a layoff?

Often yes if reasonable — and Arkansas has unusually robust judicial blue-pencil authority. Arkansas's modern non-compete law is codified at Ark. Code § 4-75-101 (Covenants not to compete, added by Act 921 of 2015 effective August 6, 2015), which substantially rewrote the prior common-law regime. Under § 4-75-101, a non-compete is enforceable if (1) the employer has a protectable business interest — defined broadly to include trade secrets, customer relationships, goodwill, confidential information, AND training investment — (2) the duration is reasonable in relation to the protectable interest, (3) the geographic scope is reasonable (limited to where the protectable interest exists), and (4) the scope of restricted activity is reasonable. Section 4-75-101 specifically AUTHORIZES Arkansas courts to REFORM (rewrite, not merely blue-pencil-strike) an overbroad covenant to make it enforceable — a sharp departure from pre-2015 Arkansas case law, which generally voided overbroad covenants entirely. Continued at-will employment is statutorily sufficient consideration for a non-compete under § 4-75-101(c); a pre-existing employee asked to sign a new non-compete cannot challenge enforcement on consideration grounds simply because she received no separate raise or bonus. The 2015 statute does NOT apply retroactively to covenants signed before August 6, 2015 — those are governed by pre-2015 Arkansas case law. Practical takeaway: in Arkansas, a post-separation non-compete signed in 2015 or later is more likely to be enforced (and judicially modified rather than struck) than in many other states — so the non-compete release clause in your severance offer has real value. Have an attorney review duration, geography, scope, and the underlying protectable interest before signing.

Does Arkansas have a state paid family leave program?

No. Arkansas has no statewide mandatory paid family and medical leave program. Arkansas workers rely on federal FMLA (12 weeks unpaid leave at employers of 50+ for qualifying medical, family, or military events) and any employer-provided STD/LTD or paid leave benefits. Unlike California, New York, New Jersey, Connecticut, Massachusetts, Washington, Oregon, Colorado, Delaware, Maryland, Rhode Island, or DC, Arkansas does NOT deduct paid-leave premiums from your paycheck during active employment, and there is no statewide AR PFL benefit you can stack against severance. Pregnancy disability accommodation rights exist under federal law (Title VII, ADA, and the federal Pregnant Workers Fairness Act effective 2023) and the Arkansas Civil Rights Act for employers with 9 or more employees, but these provide accommodation rights — not paid leave.

Arkansas Severance — 3.9% Top Rate, § 4-75-101 Blue Pencil, 2026

Q: How is severance taxed in Arkansas?

Arkansas's individual income tax was cut repeatedly between 2022 and 2024, with the final reduction under H.B. 1001 of the 2024 Second Extraordinary Session bringing the top marginal rate to 3.9% retroactive to January 1, 2024 — down from 5.5% in 2022. The 2026 structure under Ark. Code § 26-51-201 is a two-bracket graduated tax: 2.0% on taxable income up to approximately $4,600 (single, indexed annually) and 3.9% on income above. Because the top bracket begins at just $4,600, essentially every severance-recipient earner is in the 3.9% top bracket. Arkansas DFA does NOT publish a separate flat supplemental withholding rate; employers apply the graduated tables to all wages including supplemental wages, which produces a 3.9% effective rate for severance-recipient earners. On top of Arkansas withholding, severance is subject to the federal 22% supplemental rate (37% on cumulative amounts above $1,000,000 in a calendar year) and FICA (Social Security 6.2% to the wage base, Medicare 1.45% plus 0.9% additional Medicare on wages above $200,000 single / $250,000 MFJ). Year-end Arkansas liability is reconciled on Form AR1000F.

By Severance Calculator Editorial · Updated May 13, 2026

Arkansas WARN: what applies

Arkansas has no state-level mini-WARN notice statute. The operative layoff-notice regime for Arkansas private employers is federal WARN (29 U.S.C. §§ 2101–2109): employers with 100 or more full-time employees must give 60 days advance written notice for a mass layoff (50+ affected at a single site of employment that constitutes at least 33% of the active workforce, or 500+ regardless of percentage) or a plant closing. Notice must go to affected employees (or their representatives), the Arkansas Division of Workforce Services Rapid Response unit, and the chief elected official of the local government. Liability for non-compliance is back pay and benefits for each day notice was not given, up to 60 days, plus a civil penalty of up to $500 per day payable to the local government. Arkansas adds no shorter notice, no lower employer-size trigger, and no statutory severance mandate beyond federal WARN.

How severance is taxed in Arkansas

Arkansas's individual income tax was reduced under H.B. 1001 of the 2024 Second Extraordinary Session, which cut the top marginal rate to 3.9% retroactively effective January 1, 2024 — culminating a multi-year glidepath from 5.5% (2022) → 4.9% (2023) → 4.7% (early 2024 under S.B. 1 of 2023) → 4.4% (later 2024 under S.B. 8 of September 2023) → 3.9% (under H.B. 1001 of 2024 2nd Ex. Sess., retroactive). The 2026 structure is a two-bracket graduated tax under Ark. Code § 26-51-201: 2.0% on taxable income up to approximately $4,600 (single, indexed for inflation) and 3.9% top marginal rate above that. Because the top bracket starts at just $4,600, virtually every severance-recipient earner is in the 3.9% top bracket. Arkansas DFA does NOT publish a separate flat supplemental withholding rate; the 2026 Withholding Tax Tables for Employers and Withholding Tax Formula (posted at dfa.arkansas.gov December 2025) direct employers to apply the graduated tables to all wages including supplemental wages, producing a 3.9% effective rate for severance-recipient earners. On top of Arkansas withholding, severance is subject to the federal 22% supplemental rate (37% on cumulative amounts above $1,000,000 in a calendar year) and FICA (Social Security 6.2% to the wage base, Medicare 1.45% plus 0.9% additional Medicare on wages above $200,000 single / $250,000 MFJ). Arkansas has no state disability insurance, no statewide paid family leave premium, and no statewide transit tax.

Calculate your situation

Inputs default to Arkansas; adjust to your specifics.

Your situation

Role level

Years of tenure

Base salary ($)

State of employment

Age

Filing status

Variable comp ($ / yr)

Unvested RSU value ($)

Monthly medical premium (employer-side, $)

This is part of a group layoff

Severance benchmarks

Typical benchmark

$21,635

7.5 weeks · methodology: benchmarks are derived from publicly reported severance norms across us corporate layoffs. weeks/year scale with role level; tenure <1 year gets a floor; cap at 52 weeks. these are negotiation reference points, not promises.

Band	Weeks	Gross
Typical	7.5	$21,635
Good	12.5	$36,058
Aggressive	20.0	$57,692

Tax breakdown (typical band)

Gross	$21,635
Federal supplemental	−$4,760
State supplemental	−$844
FICA — Social Security	−$1,341
FICA — Medicare	−$314
FICA — Additional Medicare	−$0
Net cash	$14,376

WARN Act

Not a group layoff

OWBPA review window

Individual exit (21-day review window) under the Older Workers Benefit Protection Act, plus 7-day revocation right.

Review window: 21 days · Revocation: 7 days after signing

COBRA cost

Monthly: $0

Annual: $0

Enter your employer-side monthly premium for an estimate.

Equity at termination

Forfeited unvested: $0

ISO exercise window post-termination: 90 days

ISO holders: you typically have 90 days post-termination to exercise vested ISOs before they convert to NSOs.

FAQ

Does Arkansas require severance pay?: No Arkansas statute requires private employers to pay severance. Arkansas has no mini-WARN that would mandate pay-in-lieu of notice. The only layoff-notice regime that carries teeth in Arkansas is federal WARN (29 U.S.C. §§ 2101–2109), which requires 60 days advance notice (or back pay for missed days) at employers of 100+ for covered mass layoffs and plant closings — but WARN mandates notice, not severance. Severance is therefore employer-discretionary in Arkansas unless your employment agreement, written severance plan, or company handbook makes it mandatory. Arkansas is a strong at-will employment state, so the underlying employment relationship is terminable by either party at any time, with or without cause, absent a written contract to the contrary.
How is severance taxed in Arkansas?: Arkansas's individual income tax was cut repeatedly between 2022 and 2024, with the final reduction under H.B. 1001 of the 2024 Second Extraordinary Session bringing the top marginal rate to 3.9% retroactive to January 1, 2024 — down from 5.5% in 2022. The 2026 structure under Ark. Code § 26-51-201 is a two-bracket graduated tax: 2.0% on taxable income up to approximately $4,600 (single, indexed annually) and 3.9% on income above. Because the top bracket begins at just $4,600, essentially every severance-recipient earner is in the 3.9% top bracket. Arkansas DFA does NOT publish a separate flat supplemental withholding rate; employers apply the graduated tables to all wages including supplemental wages, which produces a 3.9% effective rate for severance-recipient earners. On top of Arkansas withholding, severance is subject to the federal 22% supplemental rate (37% on cumulative amounts above $1,000,000 in a calendar year) and FICA (Social Security 6.2% to the wage base, Medicare 1.45% plus 0.9% additional Medicare on wages above $200,000 single / $250,000 MFJ). Year-end Arkansas liability is reconciled on Form AR1000F.
Does Arkansas have a mini-WARN statute?: No. Arkansas has no state-level mini-WARN that imposes employer notice obligations independent of federal WARN. The operative regime is federal WARN (29 U.S.C. §§ 2101–2109): 60 days advance notice at employers of 100+ for mass layoffs affecting 50+ at a single site that constitute at least 33% of the active workforce (or 500+ regardless of percentage). Notice goes to affected employees, the Arkansas Division of Workforce Services Rapid Response unit, and the chief elected local official. Federal WARN penalties: back pay and benefits for each day notice was not given (up to 60 days), plus a $500/day civil penalty payable to the local government. Arkansas adds no shorter notice, no lower employer-size trigger, and no statutory severance mandate.
Does OWBPA apply in Arkansas?: Yes. OWBPA is federal (29 U.S.C. § 626(f)) and applies in all states. If you are age 40 or older and your Arkansas employer asks you to sign a waiver of age-discrimination claims under the ADEA in your severance agreement, the waiver is enforceable only if you receive at least 21 days to consider the agreement (45 days for group exits — a 'reduction in force' or 'exit incentive program'), and 7 days after signing to revoke. Group exits additionally require disclosure of the ages and job titles of all selected and non-selected employees in the decisional unit. Arkansas's Civil Rights Act of 1993 (Ark. Code § 16-123-101 et seq.) separately prohibits employment discrimination based on age (40+), but applies only to employers with 9 or more employees — a lower threshold than the federal ADEA's 20-employee minimum. A release of state-law age claims under Arkansas Civil Rights Act does not require OWBPA-compliant 21/45/7 procedures, but the federal ADEA release portion still does.
Can I collect Arkansas unemployment while receiving severance?: It depends on how the severance is structured. Arkansas's unemployment eligibility provisions are at Ark. Code § 11-10-507 (Eligibility conditions) and the disqualifications at § 11-10-513. In practice, the Arkansas Division of Workforce Services (DWS) treats severance pay based on allocation: severance designated as 'wages in lieu of notice' or paid as salary continuation tied to a specific notice period typically offsets UI benefits week-by-week during the allocated period; a lump-sum severance not designated to specific weeks is more likely to be allocated to the separation date rather than spread across subsequent weeks. Practical takeaways: (a) file your AR UI claim with DWS on or shortly after your last day worked at dws.arkansas.gov to establish your benefit year and clear the one-week waiting period; (b) fully disclose the severance amount, structure, and any employer designation when you apply and on weekly certifications — failure to report severance is fraud; (c) confirm the current Arkansas UI maximum weekly benefit amount with DWS before relying on net-of-benefits figures.
Are non-competes enforceable in Arkansas after a layoff?: Often yes if reasonable — and Arkansas has unusually robust judicial blue-pencil authority. Arkansas's modern non-compete law is codified at Ark. Code § 4-75-101 (Covenants not to compete, added by Act 921 of 2015 effective August 6, 2015), which substantially rewrote the prior common-law regime. Under § 4-75-101, a non-compete is enforceable if (1) the employer has a protectable business interest — defined broadly to include trade secrets, customer relationships, goodwill, confidential information, AND training investment — (2) the duration is reasonable in relation to the protectable interest, (3) the geographic scope is reasonable (limited to where the protectable interest exists), and (4) the scope of restricted activity is reasonable. Section 4-75-101 specifically AUTHORIZES Arkansas courts to REFORM (rewrite, not merely blue-pencil-strike) an overbroad covenant to make it enforceable — a sharp departure from pre-2015 Arkansas case law, which generally voided overbroad covenants entirely. Continued at-will employment is statutorily sufficient consideration for a non-compete under § 4-75-101(c); a pre-existing employee asked to sign a new non-compete cannot challenge enforcement on consideration grounds simply because she received no separate raise or bonus. The 2015 statute does NOT apply retroactively to covenants signed before August 6, 2015 — those are governed by pre-2015 Arkansas case law. Practical takeaway: in Arkansas, a post-separation non-compete signed in 2015 or later is more likely to be enforced (and judicially modified rather than struck) than in many other states — so the non-compete release clause in your severance offer has real value. Have an attorney review duration, geography, scope, and the underlying protectable interest before signing.
Does Arkansas have a state paid family leave program?: No. Arkansas has no statewide mandatory paid family and medical leave program. Arkansas workers rely on federal FMLA (12 weeks unpaid leave at employers of 50+ for qualifying medical, family, or military events) and any employer-provided STD/LTD or paid leave benefits. Unlike California, New York, New Jersey, Connecticut, Massachusetts, Washington, Oregon, Colorado, Delaware, Maryland, Rhode Island, or DC, Arkansas does NOT deduct paid-leave premiums from your paycheck during active employment, and there is no statewide AR PFL benefit you can stack against severance. Pregnancy disability accommodation rights exist under federal law (Title VII, ADA, and the federal Pregnant Workers Fairness Act effective 2023) and the Arkansas Civil Rights Act for employers with 9 or more employees, but these provide accommodation rights — not paid leave.