Severance in federal-WARN-only states — layoff notice, withholding, and non-compete rules for 2026

Federal WARN Act — the operative framework#

The Worker Adjustment and Retraining Notification Act of 1988 (WARN Act, 29 U.S.C. §§ 2101–2109) requires covered employers to give 60 calendar days of advance written notice before a plant closing or mass layoff. A covered employer is one with 100 or more full-time employees, or 100 or more employees who in the aggregate work at least 4,000 hours per week. The statute distinguishes two triggering events: a plant closing occurs when a single site of employment shuts down permanently or temporarily for at least six months and results in an employment loss for 50 or more employees during any 30-day period; a mass layoff occurs when at least 500 employees suffer employment losses at a single site during any 30-day period, or when 50–499 employees are laid off and they constitute at least 33 percent of the active workforce at that site.

Notice must be sent to three parties simultaneously: each affected employee (or the representative of a unionized workforce), the state dislocated-worker unit (the State Rapid Response Dislocated Worker Unit in each state listed here), and the chief elected official of the local government unit in which the facility is located. Notice must include the expected date of the first separation, the anticipated schedule of separations, job titles and the number of affected positions, and whether bumping rights exist.

An employer that fails to provide timely notice is liable to each affected employee for back pay and benefits for each day of the notice period that was not provided, up to a maximum of 60 days. In addition, the employer may be liable to the applicable unit of local government for a civil penalty of up to $500 for each day of violation. Three statutory exceptions can reduce or eliminate liability: the faltering-company exception (employer was actively seeking capital or business that would have avoided the closing and reasonable grounds existed to believe the notice would preclude the financing), the unforeseeable-business-circumstances exception (the closing or layoff was caused by business circumstances that were not reasonably foreseeable at the time 60-day notice would have been required), and the natural-disaster exception.

None of the 17 states covered in this hub page has supplemented WARN with a state-level advance notice statute. This means that for employees working in these states, the federal floor is also the ceiling — there is no broader state obligation, no lower employer-size threshold, and no shorter layoff threshold. If your employer has fewer than 100 employees, or if your layoff involves fewer than 50 workers (or fewer than 500 and less than 33 percent of the site workforce), federal WARN notice is not owed. In those situations, advance notice is entirely at the employer's discretion unless your employment contract or severance plan provides otherwise.

Alabama#

Alabama has no state mini-WARN statute, so 29 U.S.C. §§ 2101–2109 is the sole advance-notice obligation for qualifying layoffs. Alabama is one of a handful of states with no state income tax on wages, which means there is no state supplemental withholding rate to apply to your severance check — your federal supplemental withholding (22% flat up to $1 million) is the only income-tax withholding deducted at the source.

Alabama follows the majority rule on UI severance offset: lump-sum severance paid at or after the date of separation does not automatically delay unemployment insurance benefit eligibility, but severance structured as continued base-pay (wage continuation) may be treated as wages and could postpone your benefit week. Non-compete agreements in Alabama are governed by the Alabama Covenants Not to Compete Act (Ala. Code §§ 8-1-190 to 8-1-203, enacted 2016). Courts enforce reasonable non-competes for employees with access to trade secrets, confidential information, or specialized training; the statute specifies maximum durations (two years for most employment relationships) and requires that the employer have a protectable interest.

For most Alabama severance recipients, the key decision is whether to elect COBRA continuation coverage or obtain ACA marketplace coverage. Because Alabama has no state income tax and therefore no state EITC or state premium subsidy, the federal premium tax credit is the only income-based subsidy available. Keeping modified adjusted gross income below the ACA cliff threshold while in severance can produce meaningful savings.

Arkansas#

Arkansas has no state mini-WARN statute, so federal WARN is the exclusive advance-notice framework. Arkansas taxes severance at the supplemental wage withholding rate, which mirrors the state's top marginal rate — approximately 3.9% under the rate schedule that took effect for the 2024 tax year (top bracket beginning at $4,600 of net income). Employers may withhold at the supplemental flat rate rather than the employee's elected withholding allowances when paying a bonus or severance amount that is separable from regular wages.

The Arkansas Division of Workforce Services treats severance as follows for UI purposes: a lump-sum payment designated as severance generally does not reduce or delay unemployment benefits because Arkansas defines "wages" for UI offset purposes narrowly. However, any payment that represents continuation of salary through a notice period (pay in lieu of notice under WARN) may be treated as wages, potentially delaying the benefit start date.

Non-compete enforcement in Arkansas is governed by common law with relatively employer-friendly courts. There is no codified state statute defining maximum duration or geographic scope; courts apply a reasonableness standard that weighs the employer's legitimate business interest against the employee's right to earn a living. Agreements of one to two years covering a reasonable geographic area tied to actual customer contacts are generally upheld. If your severance agreement includes a non-compete, Arkansas courts will review the consideration paid — continued employment or a specific monetary payment at separation both qualify as adequate consideration.

Idaho#

Idaho has no state mini-WARN statute. The Idaho Individual Income Tax Act (Idaho Code §§ 63-3001 et seq.) imposes a flat 5.3% income tax rate on all taxable income, effective for tax years 2023 and beyond (reduced from the prior graduated schedule by H.B. 436 of 2022). Idaho does not have a separate published supplemental wage withholding rate; the Idaho State Tax Commission instructs employers to withhold on supplemental wages either at 5.3% flat or by adding the supplemental payment to the employee's regular wages and withholding at the composite rate.

For Idaho unemployment insurance purposes, the Idaho Department of Labor considers severance pay to be a payment separate from wages and generally does not offset UI benefits with lump-sum severance. The key distinction is whether the payment represents earned compensation (wages earned through the last day of work) or a gratuitous post-separation payment. Most standard severance arrangements — where the amount is determined by years of service rather than work performed — are treated as non-disqualifying severance. Pay in lieu of WARN notice may be treated differently depending on how it is characterized in the separation agreement.

Idaho non-compete law is among the more employer-friendly in the West. Idaho Code § 44-2701 (the Idaho Employee Mobility Act, enacted 2016, amended 2017) limits the use of non-compete agreements to "key employees" and "key independent contractors" — defined as those who are among the highest-paid 5% of employees or who have unique skills critical to the business. Agreements must be in writing, supported by consideration, and limited to a maximum of 18 months. Courts have the authority to modify ("blue-pencil") overly broad agreements rather than void them entirely, which is unusual among Western states.

Indiana#

Indiana has no state mini-WARN statute, placing employees solely under federal WARN's 100-employee threshold. Indiana imposes a flat 2.95% state income tax rate (reduced from 3.05% effective January 1, 2024, by H.E.A. 1001 of 2023). Indiana is unique in also levying county income taxes: all 92 Indiana counties have adopted a county income tax, with rates ranging from approximately 0.5% to 3.38% depending on the county of residence. Employers are required to withhold both state and county tax on supplemental wages including severance.

The combined Indiana state-plus-county supplemental withholding rate therefore varies meaningfully by location. A worker in Marion County (Indianapolis) faces a 2.02% county rate, bringing the combined rate to roughly 4.97%. A worker in Pulaski County faces a 3.38% county rate, for a combined rate of approximately 6.33%. Always verify the county rate applicable to your county of residence with the Indiana Department of Revenue's county tax rate schedule, as rates are updated annually by local ordinance.

Indiana UI law (Indiana Code § 22-4-15-1) has a specific severance offset rule: severance pay received during a week is not considered "remuneration" for UI purposes if it is paid pursuant to a bona fide severance plan. Lump-sum severance generally does not disqualify an otherwise eligible claimant. Non-compete agreements in Indiana are governed by common law. Indiana courts apply a strict reasonableness review, focusing on geographic scope, duration, and the scope of activity restricted. Courts will not blue-pencil agreements to make them enforceable; an overbroad agreement is void in its entirety.

Kansas#

Kansas has no state mini-WARN statute. Kansas imposes a graduated income tax with a top marginal rate of approximately 5.58% (applicable to taxable income above $23,000 for single filers in 2024). The Kansas Department of Revenue publishes supplemental wage withholding instructions that permit employers to withhold at a flat 5% rate on supplemental wages, or alternatively to combine supplemental and regular wages and withhold at the applicable graduated rate for the combined amount.

Kansas UI law treats severance pay as non-wage income for benefit purposes: a lump-sum severance payment designated as such in a written agreement generally does not delay or reduce unemployment benefit eligibility. The Kansas Department of Labor distinguishes between severance (earned through prior service, paid at separation) and wages (current earnings from services performed). If your agreement labels the payment "severance" and bases the amount on years of service, it is unlikely to offset benefits. Pay in lieu of notice characterized as continuation of wages through the notice period may differ.

Kansas non-compete law is common-law based with relatively balanced enforcement. Courts apply a reasonableness standard under which the agreement must be supported by consideration, must be necessary to protect a legitimate employer interest (trade secrets, confidential information, or customer relationships), and must be reasonable in time and geographic scope. Kansas courts may reform or blue-pencil overbroad agreements to make them enforceable, which means that a poorly drafted non-compete may survive in modified form rather than being struck down entirely.

Kentucky#

Kentucky has no state mini-WARN statute. Kentucky taxes income at a flat 3.5% state rate (reduced from 4.0% effective January 1, 2024, pursuant to H.B. 1 of 2023 Special Session). In addition, most Kentucky municipalities levy a local occupational license tax (sometimes called an "occupational tax" or "earnings tax") ranging from 0.5% to 2.5% of gross wages, depending on the city or county. Louisville Metro imposes a 2.2% rate; Lexington-Fayette Urban County imposes 2.25%. Employers withhold both the state and local tax on all compensation including severance.

Kentucky UI law (KRS Chapter 341) treats severance pay as non-wage payments that do not constitute "wages" for purposes of the benefit offset rules, provided the payment is a bona fide severance made pursuant to an established plan or policy. Consequently, receiving a lump-sum severance payment generally does not delay or reduce Kentucky unemployment benefit eligibility. Note that the Kentucky Career Center does require claimants to disclose all payments received at separation, and payments characterized as "pay in lieu of notice" may be reviewed differently.

Non-compete agreements in Kentucky are governed by common law and are enforceable when reasonable. Kentucky courts have moved toward stricter scrutiny in recent years, particularly for low-wage workers, but there is no statute prohibiting non-competes for specific employee categories (as exists in, for example, California or Minnesota). Courts consider duration (one to two years is generally acceptable), geographic scope, and the breadth of restricted activities. Kentucky does not blue-pencil; if a court finds an agreement overbroad, it is void in its entirety.

Louisiana#

Louisiana has no state mini-WARN statute. Louisiana taxes severance as ordinary income at a flat 3% rate (effective January 1, 2025, under H.B. 2 of the 2024 Second Extraordinary Session, which collapsed the prior graduated brackets into a single flat rate). The Louisiana Department of Revenue instructs employers to withhold at the flat 3% supplemental rate on bonus and severance payments unless the employee requests withholding at an alternative rate on their L-4 withholding form.

Louisiana UI law (R.S. 23:1471 et seq.) generally does not treat severance as "wages" that offset unemployment benefits when the payment is made pursuant to an established severance plan based on years of service. Louisiana Workforce Commission guidance distinguishes between severance pay (non-offsetting) and "vacation pay" or "wages in lieu of notice" (potentially offsetting). Employees who receive pay in lieu of the WARN notice period may see a corresponding delay in benefit start date.

Louisiana non-compete law is notably restrictive compared to most states — but restrictive toward employees, not employers. La. R.S. § 23:921 expressly permits non-compete agreements when they specify the parishes (counties) in which competition is prohibited and do not exceed a two-year duration. Courts strictly construe the statute and will void agreements that do not comply with the parish-specificity requirement, but properly drafted agreements are routinely enforced. Unlike most states, Louisiana does not apply a general "reasonableness" balancing test; the statute sets out the exclusive requirements, and courts apply them literally.

Mississippi#

Mississippi has no state mini-WARN statute. Mississippi imposes a flat 4% income tax rate on taxable income above a $10,000 personal exemption (under H.B. 531 of 2022, Mississippi is on a glide path to eliminate the income tax entirely by 2030, with the top rate stepping down 0.25 percentage points per year starting in 2025). For the 2026 tax year the applicable rate is 4%. Employers withhold on severance at the flat rate applicable to the year of payment. The Mississippi Department of Revenue does not publish a separate supplemental withholding rate; the flat rate applies to all wage and wage-equivalent compensation.

Mississippi Department of Employment Security (MDES) regulations treat severance pay as non-disqualifying when paid pursuant to a plan solely by reason of separation. Severance that is a contractual obligation — where the amount is determinable based on tenure and position — is not considered wages for UI offset purposes. However, accrued and unused vacation pay paid at separation is treated as wages and will generally delay benefit eligibility for the number of weeks the vacation pay covers.

Non-compete agreements in Mississippi are governed by common law. Mississippi courts will enforce non-competes that are reasonable in duration (typically up to two years), geographic scope (limited to the area in which the employee actually worked or had customer relationships), and scope of restricted activities (tied to the employee's actual role). Mississippi courts have authority to blue-pencil overbroad agreements, meaning they may narrow the scope of a non-compete to make it enforceable rather than voiding it entirely. This relatively flexible approach means that even imperfectly drafted non-competes may bind Mississippi employees to some extent.

Missouri#

Missouri has no state mini-WARN statute. Missouri's top marginal income tax rate is approximately 4.7% (effective 2025 under H.C.S. S.B. 3 of 2023, which reduced the top rate from 4.95% and set a trigger for further reductions if revenue targets are met; the top bracket begins at approximately $9,200 of Missouri taxable income). The Missouri Department of Revenue publishes a flat supplemental withholding rate equal to the current top marginal rate, which employers may use instead of the graduated withholding tables for bonus and severance payments.

Missouri UI law (§ 288.038 RSMo) has a specific statutory provision addressing severance: payments received by an individual from an employer because of the individual's separation from employment are not "wages" for UI disqualification purposes if paid pursuant to a bona fide severance pay plan. As a result, lump-sum severance generally does not disqualify a claimant or reduce weekly benefits. Missouri courts have consistently interpreted this provision broadly in favor of claimants, and the Division of Employment Security follows suit in its claims adjudication.

Missouri non-compete law is common-law based and moderately employer-friendly. Courts apply a reasonableness test considering duration (one to two years is typically enforceable), geographic scope (tied to the territory the employee served), and the employer's protectable interest (trade secrets, customer relationships, or highly specialized training). Missouri courts will blue-pencil overbroad agreements, especially with respect to geographic scope, but are less willing to reform duration provisions. There is no Missouri statute restricting non-competes for any particular category of worker.

Montana#

Montana has no state mini-WARN statute. Montana taxes severance income under a two-bracket rate structure effective for the 2024 tax year: 4.7% on the first $20,500 of Montana taxable income and 5.9% on all income above that threshold (reduced from the prior top rate of 6.75% by S.B. 399 of 2021). The Montana Department of Revenue publishes a supplemental withholding percentage for bonus and severance; because there are only two brackets, employers typically withhold at the 5.9% rate for any payment that is likely to push the employee above the $20,500 threshold.

Montana is noteworthy for having the only "just-cause" employment protection statute outside of the "at-will" framework that applies broadly: the Montana Wrongful Discharge From Employment Act (Mont. Code Ann. §§ 39-2-901 to 39-2-915, enacted 1987, often called the WDEA). After completing a probationary period (up to 12 months), a Montana employee may only be discharged for good cause. This affects the severance landscape differently than other states: employees who believe they were discharged without good cause may pursue a WDEA claim in addition to any WARN claim, and the availability of WDEA damages (lost wages up to four years) can significantly affect negotiating leverage for severance.

Montana UI law follows the majority rule on severance: lump-sum payments designated as severance under a bona fide plan are not wages for UI offset purposes and do not delay benefit eligibility. Non-compete agreements in Montana are governed by Mont. Code Ann. § 28-2-703, which authorizes enforcement of agreements not to compete "upon a sale of the good-will of a business" but is silent on employment non-competes. Montana courts have historically been skeptical of employment non-competes and require a strong showing of legitimate protectable interest.

Nebraska#

Nebraska has no state mini-WARN statute. Nebraska is on a legislated glide path to reduce its top income tax rate. Under L.B. 754 (2023 Nebraska Legislature), the top marginal rate declined to approximately 4.55% for the 2024 tax year and is scheduled to reach 3.99% by the 2027 tax year. The current supplemental wage withholding rate published by the Nebraska Department of Revenue equals the applicable top marginal rate. Employers may withhold at that flat rate on severance and bonus payments, or may use the Nebraska income tax withholding tables for the employee's annualized compensation.

Nebraska UI law (Neb. Rev. Stat. §§ 48-601 et seq.) treats bona fide severance pay as non-disqualifying income. A payment made because of the employer-employee separation pursuant to a written plan or established policy is not considered "remuneration" for purposes of the weekly benefit offset calculation. As in other states, payments that represent continuation of wages through a notice period are treated differently and may delay the start of benefits.

Nebraska's non-compete law was substantially updated by L.B. 276 (2022 Nebraska Legislature), effective November 19, 2022. Non-compete agreements entered into on or after that date are enforceable only if: (1) the employee earns above a compensation threshold (adjusted annually by the median household income threshold); (2) the agreement protects a legitimate business interest; (3) the duration does not exceed two years; and (4) the geographic scope is reasonable relative to where the employee worked. The Nebraska Attorney General may bring an enforcement action to void non-compliant agreements, and individual employees may sue for injunctive relief or damages.

New Mexico#

New Mexico has no state mini-WARN statute. New Mexico's Personal Income Tax Act (N.M.S.A. §§ 7-2-1 et seq.) imposes graduated rates with a top marginal rate of approximately 5.9% on income above roughly $210,000 for single filers (under H.B. 6 of 2019 and subsequent technical amendments). For supplemental wage withholding purposes, the New Mexico Taxation and Revenue Department publishes instructions under which employers may withhold at the highest marginal rate or use the aggregate method. Most employers apply the flat top-rate approach to severance payments.

New Mexico UI law (N.M.S.A. §§ 51-1-1 et seq.) classifies severance pay made pursuant to a plan for the benefit of employees as non-disqualifying income. This means receiving a severance payment does not reduce or delay unemployment benefits in New Mexico. However, the New Mexico Department of Workforce Solutions requires disclosure of all payments at separation on the initial UI claim form, and payments described as "wages in lieu of notice" may receive different treatment under N.M.S.A. § 51-1-14.

New Mexico non-compete law is common law based. New Mexico courts scrutinize non-compete agreements carefully and apply a "partial enforcement" doctrine under which they may reform overly broad agreements. However, New Mexico's Human Services Department and courts have signaled increasing skepticism of non-competes for lower-wage workers. There is no comprehensive statute regulating employment non-competes, but the New Mexico Legislature has considered such legislation in recent sessions. Employees should obtain specific counsel on their agreement's enforceability given the evolving legal landscape.

North Dakota#

North Dakota has no state mini-WARN statute. North Dakota taxes severance income at a top marginal rate of 2.50% (under S.B. 2186 of 2023 which collapsed the prior five-bracket structure; the 0% bracket covers approximately the first $48,500 of income for single filers). For supplemental wages, the North Dakota Office of State Tax Commissioner instructs employers to withhold at a flat supplemental rate equal to the applicable top rate (2.50%), making North Dakota one of the states with the lowest effective supplemental withholding rate in this group.

North Dakota Job Service (the state UI agency) treats severance pay as non-wages when paid pursuant to a bona fide separation plan. A severance payment that is calculated by reference to years of service and is not attributable to any specific work period is not considered "wages" under N.D. Cent. Code § 52-01-01(13) and does not offset benefits. Vacation and personal time paid at separation is treated as wages and can delay benefit eligibility for the covered period.

Non-compete agreements in North Dakota face a unique legal environment. N.D. Cent. Code § 9-08-06 renders void any contract that restrains a person from exercising a lawful profession, trade, or business. North Dakota courts have consistently interpreted this statute to make virtually all employment-based non-compete agreements unenforceable. There are narrow statutory exceptions for sellers of a business and for dissolution of a partnership, but the general employment non-compete prohibition is among the strongest in the country. If your severance agreement includes a non-compete and you work in North Dakota, it is very likely unenforceable.

Oklahoma#

Oklahoma has no state mini-WARN statute. Oklahoma's top marginal income tax rate decreased to 4.5% effective January 1, 2026 (reduced from 4.75% under S.B. 4 of 2024 Special Session, which established a trigger-based rate reduction mechanism). The Oklahoma Tax Commission publishes supplemental wage withholding instructions that permit employers to use the flat top-rate (4.5% for 2026) on bonus, commission, and severance payments as an alternative to the aggregate withholding method.

Oklahoma Employment Security Commission (OESC) regulations classify lump-sum severance pay as non-wage income when paid pursuant to an established, written plan or policy. Such payments do not delay benefit start dates and are not subtracted from weekly benefit amounts. As in other states, accrued vacation paid at separation is generally treated differently — as earned wages — and the number of weeks of vacation pay may delay the initial benefit date. Oklahoma's Benefit Rights and Responsibilities document advises claimants to report all termination payments at the time of filing.

Oklahoma non-compete law was significantly reformed by H.B. 3118 of 2022 (Oklahoma Compete Act, effective November 1, 2022; Okla. Stat. tit. 15, §§ 219A–219C). The Act limits the enforceability of employment non-compete agreements: they must be in writing, must be limited to a maximum of one year duration, must restrict the employee only from engaging in the same or similar business in a defined geographic area, and must be supported by adequate consideration at the time of the agreement. Oklahoma courts may not reform (blue-pencil) non-compliant agreements; a non-compete that fails to meet the statutory requirements is void and unenforceable in its entirety.

Rhode Island#

Rhode Island has no state mini-WARN statute. Rhode Island's top marginal income tax rate is approximately 5.99% (applicable to Rhode Island taxable income above roughly $176,050 for single filers in 2024, per the Rhode Island Division of Taxation's annual inflation adjustments to the rate schedule under R.I. Gen. Laws § 44-30-2). For supplemental wages, the Division of Taxation instructs employers to withhold at the highest marginal rate or to use the aggregate method. Rhode Island is notable among this group for having relatively high withholding on mid-to-high severance amounts due to its top rate structure.

The Rhode Island Department of Labor and Training (RI DLT) treats bona fide severance payments — those paid pursuant to a plan or policy and calculated by reference to length of service — as non-wages for unemployment benefit offset purposes. Such payments do not delay benefit eligibility or reduce weekly benefit amounts. Rhode Island's UI law (R.I. Gen. Laws §§ 28-44-1 et seq.) defines "wages" in a way that has consistently been interpreted to exclude standard severance. Employees receiving severance should still disclose it on their initial UI claim.

Rhode Island non-compete law was substantially reformed by the Rhode Island Non-Compete Agreement Act (R.I. Gen. Laws §§ 28-59-1 et seq., enacted 2019). The Act prohibits non-compete agreements for non-exempt employees (hourly workers, those who work under collective bargaining agreements, undergraduate and graduate students, and workers under 18). For eligible employees, non-competes must be provided at least 14 days before the start of employment or the employee's acceptance of a promotion, must have a maximum duration of one year, and must include a statement advising the employee to consult an attorney. Agreements that fail these requirements are void.

South Carolina#

South Carolina has no state mini-WARN statute. South Carolina's income tax schedule imposes a top marginal rate of approximately 6.0% on taxable income above roughly $17,330 for single filers (the rate and bracket thresholds are adjusted annually for inflation under S.C. Code Ann. § 12-6-510). The South Carolina Department of Revenue's withholding instructions permit employers to withhold at a flat 7% on supplemental wages if they do not use the aggregate method. In practice, many employers use this 7% withholding rate on severance, meaning employees often have more withheld than necessary and receive a refund at tax time.

South Carolina Department of Employment and Workforce (SCDEW) regulations treat severance pay in a manner consistent with federal UI guidance: lump-sum severance paid pursuant to a plan or agreement based on years of service is generally not treated as wages and does not delay unemployment benefit eligibility. The distinction, as in other states, lies between true severance (a separation benefit tied to tenure) and wages in lieu of notice (continuation of salary through the statutory or contractual notice period, which may be treated as wages and delay the UI benefit start date).

South Carolina non-compete law is common law based and moderately employer-friendly. South Carolina courts will enforce non-competes that are ancillary to an employment relationship, supported by consideration (continued employment at-will generally suffices for new agreements; additional consideration may be required for mid-employment modifications), and reasonable in duration, geographic scope, and scope of restricted activities. South Carolina courts will blue-pencil overbroad agreements, narrowing them to what is reasonable rather than voiding them in their entirety. Duration of one to two years is typically upheld for sales and professional roles.

West Virginia#

West Virginia has no state mini-WARN statute. West Virginia's income tax rate was substantially reformed by S.B. 392 of 2023, which replaced the prior five-bracket graduated schedule with a simplified two-bracket structure and established a mechanism for further reductions. For the 2026 tax year the top marginal rate is approximately 4.58% (the precise rate for each year is set by the State Tax Department based on revenue trigger calculations under S.B. 392). The West Virginia State Tax Department publishes supplemental withholding instructions directing employers to apply the top marginal rate to supplemental wages including severance.

West Virginia Workforce West Virginia (the state UI agency) treats severance pay similarly to most other states in this group: a payment made pursuant to an established separation plan based on years of service is not considered wages for UI disqualification purposes. West Virginia Code § 21A-6-3 defines "wages" for UI offset purposes and has been interpreted by the agency and courts to exclude standard severance arrangements. Accrued paid time off paid at separation is treated differently and is generally allocated over the period it covers, potentially delaying the benefit start date.

Non-compete agreements in West Virginia are governed by common law. West Virginia courts apply a strict reasonableness standard and have historically been somewhat skeptical of broad non-compete agreements. The West Virginia Supreme Court of Appeals has articulated a multi-factor test requiring that the agreement be necessary to protect a legitimate employer interest, that the geographic scope not be broader than where the employee actually worked, and that the duration be limited (one year is generally upheld; two years may be upheld for senior roles with genuine trade-secret access). West Virginia courts will partially enforce ("blue-pencil") overbroad agreements in some circumstances.

States not included — those with their own mini-WARN statutes#

Six states from the original candidate pool were excluded because they have enacted their own state mini-WARN statutes that supplement or expand upon the federal law. Employees in these states are covered by both the federal statute and their state's separate requirements:

• Vermont — 21 V.S.A. §§ 411–414 (Vermont Notice of Potential Layoffs Act, enacted 2013, effective January 15, 2015). Vermont's statute applies to employers with 50 or more employees and requires 45 days notice (shorter than federal WARN but a lower employer-size threshold).
• Maine — 26 M.R.S. § 625-B (Severance Pay Statute, applicable to establishments with 100 or more employees). Maine's law requires one week of severance pay per year of service for certain covered closings, making it one of the few state statutes that mandates severance rather than merely advance notice.
• Delaware — 19 Del. C. ch. 19 §§ 1901–1911 (Delaware Worker Adjustment and Retraining Notification Act). Delaware modeled its statute closely on federal WARN but applies to employers with 100 or more employees in Delaware.
• Iowa — Iowa Code Chapter 84C (Iowa Worker Adjustment and Retraining Notification Act). Iowa's statute applies to employers with 25 or more employees and requires 30-day advance notice — a lower employer-size threshold and shorter notice period than federal WARN.
• Wisconsin — Wis. Stat. § 109.07 (Wisconsin Business Closing and Mass Layoff Law). Wisconsin's statute applies to employers with 50 or more employees and requires 60 days advance notice, matching the federal period but with a lower employer-size threshold.
• Hawaii — Haw. Rev. Stat. ch. 394B (Hawaii Dislocated Workers Act). Hawaii's law applies to employers with 50 or more employees and includes a unique dislocation-worker allowance (state-funded benefit supplement) not available under federal WARN.

If you are employed in one of these six states, see the individual state page for a complete analysis that covers both the federal and state notice obligations.

Side-by-side comparison — all 17 federal-WARN-only states#

The table below summarizes the key severance-related rules for each of the 17 states covered in this hub. "Supp. withholding" is the flat rate employers may use on bonus and severance payments in lieu of the graduated table. "Non-compete" describes the enforceability posture — "Enforceable (CL)" means common-law reasonableness standard; "Statute" means a specific statute governs; "Void by statute" means a statute prohibits most employment non-competes.

All rates are for tax year 2026. Verify current rates with the relevant state revenue agency before filing. "Generally no" means lump-sum bona fide severance; pay-in-lieu-of-notice treatment varies by state and specific facts.

Estimate your severance taxes — state-specific calculators#

Use the state-specific severance calculator to model your after-tax severance amount, estimated UI eligibility, and the impact of different payout timing strategies. Select your state below: