Does Nebraska require severance pay?

No Nebraska statute requires private employers to pay severance. Nebraska has no state mini-WARN that would mandate pay-in-lieu of notice. The only layoff-notice regime that carries teeth in Nebraska 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 Nebraska unless your employment agreement, written severance plan, or company handbook makes it mandatory. Nebraska is an at-will employment state.

Does Nebraska have a mini-WARN statute?

No. Nebraska 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 Nebraska Department of Labor (NDOL) 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. Nebraska adds no shorter notice, no lower employer-size trigger, and no statutory severance mandate.

Does OWBPA apply in Nebraska?

Yes. OWBPA is federal (29 U.S.C. § 626(f)) and applies in all states. If you are age 40 or older and your Nebraska 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. The Nebraska Age Discrimination in Employment Act (Neb. Rev. Stat. § 48-1001 et seq.) separately prohibits age discrimination (40+) by employers with 20 or more employees — equivalent to the federal ADEA threshold. A release of state-law age claims under NADEA does not require OWBPA-compliant 21/45/7 procedures, but the federal ADEA release portion still does.

Can I collect Nebraska unemployment while receiving severance?

It depends on how the severance is structured. Nebraska's unemployment disqualification rules are at Neb. Rev. Stat. § 48-628. Annotations under § 48-628 explicitly address severance: a lump-sum severance allowance is intended to be PRORATED, with the proration designed to 'prevent a claimant from receiving double payments for the same period of time in unemployment benefits and severance compensation.' In practice, the Nebraska Department of Labor (NDOL) allocates lump-sum severance week-by-week at the claimant's normal weekly wage and reduces UI benefits dollar-for-dollar during the allocated weeks until the severance is exhausted — once exhausted, full UI resumes (subject to other eligibility). Practical takeaways: (a) file your Nebraska UI claim with NDOL on or shortly after your last day worked at neworks.nebraska.gov to establish your benefit year; (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 Nebraska UI maximum weekly benefit amount with NDOL before relying on net-of-benefits figures.

Are non-competes enforceable in Nebraska after a layoff?

Often NO for typical broad covenants — Nebraska is one of the most employee-friendly states for non-competes by judicial doctrine. Under the Nebraska Supreme Court's framework in Polly v. Ray D. Hilderman & Co., 225 Neb. 662, 407 N.W.2d 751 (1987), and CAE Vanguard, Inc. v. Newman, 246 Neb. 334, 518 N.W.2d 652 (1994), a non-compete restraining ORDINARY competition is VOID; non-competes are enforceable ONLY when they prevent the former employee from competing for ACTIVE customers with whom the employee did business and had personal contact while employed. This 'active customer' test is materially narrower than the typical reasonableness framework used in most states. Nebraska is also a 'strict' state for blue-penciling: Nebraska courts traditionally have very limited authority to rewrite overbroad covenants and tend to void them outright when the geographic or activity scope is too broad. Practical takeaway: in Nebraska, a typical broadly-drafted non-compete is often UNENFORCEABLE because it tries to bar ordinary competition — the non-compete release clause in your severance offer may be releasing little of real value if the agreement does not satisfy the Polly v. Hilderman active-customer test. Have an attorney review the covenant against Polly and CAE Vanguard before assigning value to the release.

What does the Polly v. Hilderman active-customer test actually mean?

The Polly v. Hilderman test (Polly v. Ray D. Hilderman & Co., 225 Neb. 662, 407 N.W.2d 751 (1987)) and its successor CAE Vanguard, Inc. v. Newman, 246 Neb. 334, 518 N.W.2d 652 (1994), establish that a Nebraska employer's legitimate, protectable interest in a non-compete is limited to preventing the former employee from soliciting or doing business with CUSTOMERS WITH WHOM THE EMPLOYEE HAD PERSONAL CONTACT AND BUSINESS DEALINGS during employment. A non-compete that tries to bar competition for ALL potential customers in a geographic area — or that simply prohibits the former employee from working in the industry — is void as a restraint on ordinary competition. In practice, a typical 'one-year non-compete prohibiting work in a similar role within 50 miles' would likely be voided under Polly because it sweeps in customers the employee never met. By contrast, a narrower 'one-year non-solicitation of customers the employee personally serviced during the prior 24 months' is more likely to survive. Nebraska's strict blue-pencil doctrine means courts tend to VOID overbroad covenants rather than rewrite them. The practical implication for severance valuation: a Nebraska employee asked to sign a non-compete release is often releasing a probably-unenforceable covenant — the release has lower marginal value than in states like Florida, Texas, or Massachusetts where reasonableness-test enforcement is the norm.

Nebraska Severance — Top 4.55% Tax, Polly Non-Competes, 2026

By Severance Calculator Editorial · Updated May 13, 2026

Nebraska WARN: what applies

Nebraska has no state-level mini-WARN notice statute. The operative layoff-notice regime for Nebraska 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 constituting 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 Nebraska Department of Labor (NDOL) Rapid Response unit, and the chief elected official of the local government. 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. Nebraska adds no shorter notice, no lower employer-size trigger, and no statutory severance mandate.

How severance is taxed in Nebraska

Nebraska's individual income tax operates under Neb. Rev. Stat. § 77-2715.03 with a four-bracket graduated structure. Under LB 754 of the 2023 Nebraska Legislature (signed by Governor Pillen May 31, 2023), Nebraska's top marginal rate is on a multi-year glidepath to 3.99% by 2027: 6.84% (through 2022) → 6.64% (2023) → 5.84% (2024) → 5.20% (2025) → 4.55% (2026) → 3.99% (2027 and beyond). The third bracket also drops from 5.01% (through 2025) to 4.55% (2026) before both brackets converge at 3.99% in 2027. Severance-recipient earners commonly fall into the top 4.55% bracket. Nebraska does NOT publish a separate flat supplemental withholding rate; the Nebraska Circular EN directs employers to apply the graduated method (wage bracket or percentage method tables) to all wages including supplemental wages, producing an effective ~4.55% rate for top-bracket earners. Nebraska does not impose any state-level local income tax on wages. On top of Nebraska state 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).

Calculate your situation

Inputs default to Nebraska; 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	−$984
FICA — Social Security	−$1,341
FICA — Medicare	−$314
FICA — Additional Medicare	−$0
Net cash	$14,236

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 Nebraska require severance pay?: No Nebraska statute requires private employers to pay severance. Nebraska has no state mini-WARN that would mandate pay-in-lieu of notice. The only layoff-notice regime that carries teeth in Nebraska 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 Nebraska unless your employment agreement, written severance plan, or company handbook makes it mandatory. Nebraska is an at-will employment state.
How is severance taxed in Nebraska?: Nebraska's individual income tax operates under Neb. Rev. Stat. § 77-2715.03 with a four-bracket graduated structure. Under LB 754 of the 2023 Nebraska Legislature, Nebraska's top marginal rate has been on a multi-year glidepath: 5.84% (2024) → 5.20% (2025) → 4.55% (2026) → 3.99% (2027 and beyond). Severance-recipient earners commonly fall into the top 4.55% bracket for 2026. Nebraska does NOT publish a separate flat supplemental withholding rate; the Nebraska Circular EN directs employers to apply the graduated method (wage bracket or percentage method tables) to all wages including supplemental wages (severance, bonuses, commissions), producing an effective ~4.55% rate for top-bracket earners. Nebraska does not impose any state-level local income tax on wages. On top of Nebraska state 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 Nebraska liability is reconciled on Form 1040N.
Does Nebraska have a mini-WARN statute?: No. Nebraska 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 Nebraska Department of Labor (NDOL) 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. Nebraska adds no shorter notice, no lower employer-size trigger, and no statutory severance mandate.
Does OWBPA apply in Nebraska?: Yes. OWBPA is federal (29 U.S.C. § 626(f)) and applies in all states. If you are age 40 or older and your Nebraska 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. The Nebraska Age Discrimination in Employment Act (Neb. Rev. Stat. § 48-1001 et seq.) separately prohibits age discrimination (40+) by employers with 20 or more employees — equivalent to the federal ADEA threshold. A release of state-law age claims under NADEA does not require OWBPA-compliant 21/45/7 procedures, but the federal ADEA release portion still does.
Can I collect Nebraska unemployment while receiving severance?: It depends on how the severance is structured. Nebraska's unemployment disqualification rules are at Neb. Rev. Stat. § 48-628. Annotations under § 48-628 explicitly address severance: a lump-sum severance allowance is intended to be PRORATED, with the proration designed to 'prevent a claimant from receiving double payments for the same period of time in unemployment benefits and severance compensation.' In practice, the Nebraska Department of Labor (NDOL) allocates lump-sum severance week-by-week at the claimant's normal weekly wage and reduces UI benefits dollar-for-dollar during the allocated weeks until the severance is exhausted — once exhausted, full UI resumes (subject to other eligibility). Practical takeaways: (a) file your Nebraska UI claim with NDOL on or shortly after your last day worked at neworks.nebraska.gov to establish your benefit year; (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 Nebraska UI maximum weekly benefit amount with NDOL before relying on net-of-benefits figures.
Are non-competes enforceable in Nebraska after a layoff?: Often NO for typical broad covenants — Nebraska is one of the most employee-friendly states for non-competes by judicial doctrine. Under the Nebraska Supreme Court's framework in Polly v. Ray D. Hilderman & Co., 225 Neb. 662, 407 N.W.2d 751 (1987), and CAE Vanguard, Inc. v. Newman, 246 Neb. 334, 518 N.W.2d 652 (1994), a non-compete restraining ORDINARY competition is VOID; non-competes are enforceable ONLY when they prevent the former employee from competing for ACTIVE customers with whom the employee did business and had personal contact while employed. This 'active customer' test is materially narrower than the typical reasonableness framework used in most states. Nebraska is also a 'strict' state for blue-penciling: Nebraska courts traditionally have very limited authority to rewrite overbroad covenants and tend to void them outright when the geographic or activity scope is too broad. Practical takeaway: in Nebraska, a typical broadly-drafted non-compete is often UNENFORCEABLE because it tries to bar ordinary competition — the non-compete release clause in your severance offer may be releasing little of real value if the agreement does not satisfy the Polly v. Hilderman active-customer test. Have an attorney review the covenant against Polly and CAE Vanguard before assigning value to the release.
What does the Polly v. Hilderman active-customer test actually mean?: The Polly v. Hilderman test (Polly v. Ray D. Hilderman & Co., 225 Neb. 662, 407 N.W.2d 751 (1987)) and its successor CAE Vanguard, Inc. v. Newman, 246 Neb. 334, 518 N.W.2d 652 (1994), establish that a Nebraska employer's legitimate, protectable interest in a non-compete is limited to preventing the former employee from soliciting or doing business with CUSTOMERS WITH WHOM THE EMPLOYEE HAD PERSONAL CONTACT AND BUSINESS DEALINGS during employment. A non-compete that tries to bar competition for ALL potential customers in a geographic area — or that simply prohibits the former employee from working in the industry — is void as a restraint on ordinary competition. In practice, a typical 'one-year non-compete prohibiting work in a similar role within 50 miles' would likely be voided under Polly because it sweeps in customers the employee never met. By contrast, a narrower 'one-year non-solicitation of customers the employee personally serviced during the prior 24 months' is more likely to survive. Nebraska's strict blue-pencil doctrine means courts tend to VOID overbroad covenants rather than rewrite them. The practical implication for severance valuation: a Nebraska employee asked to sign a non-compete release is often releasing a probably-unenforceable covenant — the release has lower marginal value than in states like Florida, Texas, or Massachusetts where reasonableness-test enforcement is the norm.