Georgia Severance — Restrictive Covenants Act, 5.19% Flat Tax, 2026

Georgia WARN: what applies#

Georgia has no state mini-WARN statute. The operative layoff-notice regime for private Georgia 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 or more affected at a single site of employment that constitutes at least 33% of the active workforce, or 500 or more regardless of percentage) or a plant closing. Notice must go to affected employees (or their representatives), the state dislocated-worker unit (the Georgia Department of Labor Rapid Response team), 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. Georgia adds no shorter notice, no lower employer-size trigger, and no statutory severance mandate.

How severance is taxed in Georgia#

Georgia has a flat 5.19% individual income tax rate for tax year 2026 under HB 111 (2025 Acts of the General Assembly, signed by Governor Kemp on April 15, 2025) — down from 5.39% in 2025 and from a graduated 1%–5.75% schedule prior to the 2024 flat-tax conversion under HB 1015. The Georgia Department of Revenue 2026 Employer's Withholding Tax Guide (revised December 2025) directs employers to withhold at the 5.19% flat rate. Unlike California (6.6%), New York (11.70%), or North Carolina (4.09%), the GA DOR does NOT publish a separate supplemental wage withholding rate — the flat 5.19% applies uniformly to severance, bonuses, commissions, and regular wages. HB 111 establishes a glidepath of additional 0.10 percentage-point reductions per year, contingent on state-revenue triggers, toward a long-term target of 4.99%; Governor Kemp has proposed HB 1001 to accelerate the rate to 4.99% retroactive to January 2026, but that proposal had not been enacted as of May 2026. On top of GA 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% up to the wage base, Medicare 1.45% plus 0.9% additional Medicare on wages above $200,000 single / $250,000 MFJ). Georgia has no state disability insurance, no statewide paid family leave premium, and no statewide transit tax on employees. Year-end Georgia liability is reconciled on Form 500. Confirm the live GA DOR Employer's Tax Guide at dor.georgia.gov before relying on the 5.19% figure for any specific pay date.

Calculate your situation#

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FAQ#

Does Georgia require severance pay?

No Georgia statute requires private employers to pay severance. Georgia is a strong at-will employment state — the employment relationship is terminable by either party at any time, with or without cause, unless modified by an express written contract, an enforceable handbook promise, or a collective bargaining agreement. Georgia has no mini-WARN that would mandate pay-in-lieu of notice. The only layoff-notice regime that carries teeth in Georgia 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. Georgia is also a right-to-work state under O.C.G.A. §§ 34-6-21 through 34-6-28 (originally enacted 1947): no employee may be required to join or pay dues to a labor union as a condition of employment. Severance is therefore employer-discretionary in Georgia unless your employment agreement, handbook, or collective bargaining agreement makes it mandatory.

How is severance taxed in Georgia?

Georgia has a flat 5.19% individual income tax rate for tax year 2026 under HB 111, signed by Governor Kemp on April 15, 2025 — down from 5.39% in 2025 and from the previous graduated 1%–5.75% schedule that existed before the 2024 flat-tax conversion under HB 1015. The Georgia Department of Revenue 2026 Employer's Withholding Tax Guide (revised December 2025) directs employers to withhold at the 5.19% flat rate. Unlike many states, the GA DOR does NOT publish a separate supplemental wage withholding rate — the same 5.19% applies to severance, bonuses, commissions, and regular wages. HB 111 also sets a glidepath of additional 0.10 percentage-point reductions per year, contingent on state-revenue triggers, toward a long-term target of 4.99%; Governor Kemp has proposed HB 1001 to accelerate the rate to 4.99% retroactive to January 2026, but that proposal had not been enacted as of May 2026 — confirm the live DOR Employer's Tax Guide at dor.georgia.gov before relying on the 5.19% figure for any specific pay date. On top of Georgia state withholding, severance is subject to the federal 22% supplemental rate (37% on cumulative amounts above $1,000,000 in the year) and FICA (Social Security 6.2% up to the wage base, Medicare 1.45% plus 0.9% additional Medicare on wages above $200,000 single or $250,000 married filing jointly). Georgia has no state disability insurance, no statewide paid family leave premium, and no transit tax. Year-end GA liability is reconciled on Form 500.

Does Georgia have a mini-WARN?

No. Unlike California, New York, New Jersey, or Illinois, Georgia has no state-law mini-WARN. The operative regime 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 constituting at least 33% of the active workforce, or 500+ regardless of percentage) or a plant closing. Notice must go to affected employees, the Georgia Department of Labor Rapid Response unit, and the chief elected local official. Failure to comply triggers back pay and benefits for the period notice was not given (up to 60 days), plus a $500/day civil penalty to the local government. Georgia adds no shorter notice, no lower employer-size trigger, and no statutory severance mandate.

Can I collect Georgia unemployment while receiving severance?

Generally no for the period severance covers. The Georgia Department of Labor's official Unemployment Insurance FAQ states that any payments received as a result of separation — including severance, separation pay, or wages in lieu of notice — must be reported when you file your claim, and that you are 'usually not eligible for unemployment insurance benefits during a period covered by severance pay paid to you by your employer.' GDOL further explains that if the weekly amount of severance exceeds your weekly unemployment benefit amount, you will not be eligible to receive UI for the period the payment covers. The 2026 GDOL maximum weekly benefit amount (WBA) is $365 (Georgia's WBA range is $55 to $365), and duration ranges from 14 to 26 weeks indexed to the state seasonally adjusted unemployment rate per O.C.G.A. § 34-8-193. GDOL adds an important caveat — 'the only way to know for sure whether severance pay is disqualifying is to file a claim,' because allocation is fact-specific and depends on how the employer characterizes and dates the payment in its UI response. Failure to report severance can trigger an overpayment determination and potential fraud charge. File your initial claim at dol.georgia.gov and disclose the severance amount, structure, and date you learned of the payment; GDOL makes the eligibility determination from the separation paperwork.

Are non-competes enforceable in Georgia after a layoff? (The Restrictive Covenants Act)

Sometimes — Georgia's 2011 Restrictive Covenants Act (O.C.G.A. § 13-8-50 et seq.) significantly liberalized non-compete enforcement compared to Georgia's pre-2011 common law, and is the dominant Georgia-specific severance issue. Five doctrinal points control. (1) Scope of covered employees: post-employment non-competes are enforceable under O.C.G.A. § 13-8-53(a) only against 'employees' who fit one of four categories defined in O.C.G.A. § 13-8-51 — managers (customarily exercising discretion and independent judgment, directing two or more employees), sales employees (customarily and regularly soliciting customers for products or services), 'key employees' (high-level employees with selected business information, customer relationships, or specialized training material to competitive advantage), or 'professionals' (employees with specialized knowledge from prolonged study). A non-compete against a worker outside these categories is not enforceable under the Act. (2) Two-year presumption: covenants of two years or less are presumptively reasonable in time under O.C.G.A. § 13-8-57(b); courts treat longer durations skeptically. (3) Reasonableness test: even within the covered classes, the covenant must be reasonable in time, geographic area, and scope of prohibited activities and must protect a legitimate business interest (trade secrets, confidential information, substantial customer relationships, goodwill, or specialized training). (4) Geographic scope: the Georgia Supreme Court held in N. Am. Senior Benefits, LLC v. Wimmer (Sept. 4, 2024) that O.C.G.A. § 13-8-53 does NOT require an EXPRESS geographic restriction — an implied geographic scope is sufficient if the covenant is geographically reasonable on the facts and provides fair notice of the maximum scope of the restraint. (5) Blue-pencil authority: this is the sharpest break from pre-2011 Georgia law. Under O.C.G.A. § 13-8-53(d) and § 13-8-54(b), Georgia courts have express statutory authority to MODIFY (not just strike) overbroad covenants to make them enforceable — the opposite of North Carolina's strict blue-pencil rule and a significant pro-employer feature. Practical implication for severance: in Georgia, if you were a manager, sales employee, key employee, or professional and the covenant runs two years or less, the 'non-compete release' clause in your severance offer often DOES have real value to give up — and even an overbroad covenant may not collapse, because a Georgia court can rewrite it to be enforceable. Have an attorney review the duration, geography (express or implied), and scope before signing.

What other Georgia laws affect a severance package?

Three are worth knowing about. (1) Georgia is a right-to-work state under O.C.G.A. §§ 34-6-21 through 34-6-28 (originally enacted 1947): no employee may be required to join or pay dues to a labor union as a condition of employment, and union-security clauses are unenforceable. The statute makes Georgia one of the more employer-favorable jurisdictions for labor relations, but it does not affect severance or wage rights directly. (2) Georgia has no state final-paycheck statute that broadly tracks the federal FLSA or state analogues elsewhere — there is no general state-law deadline for paying out earned wages on separation beyond what the employer's own policy or contract requires. However, the Georgia Wage and Hour Law (O.C.G.A. § 34-4-1 et seq.) and federal FLSA still apply to minimum-wage and overtime obligations through the last day worked; commissions and bonuses earned but unpaid at separation may be recoverable under contract or quantum meruit theories. Severance itself is not 'wages' for any Georgia statutory purpose unless your contract, established policy, or plan makes it so. (3) The Georgia Fair Employment Practices Act (O.C.G.A. § 45-19-20 et seq.) covers state-government employees but does NOT extend to most private employers — for private-sector discrimination claims, you rely on federal Title VII (15+ employees), the ADEA (20+ employees), the ADA (15+ employees), and 42 U.S.C. § 1981 (race, no employee minimum). A general release in your severance agreement giving up federal discrimination claims is generally enforceable if knowing and voluntary. OWBPA is federal and applies in Georgia: if you are age 40 or older and asked to waive age-discrimination claims, you get 21 days to consider (45 for group exits) and 7 days after signing to revoke.