Wyoming Severance — No State Income Tax, Federal WARN, 2026

Wyoming WARN: what applies#

Wyoming has no state-level mini-WARN notice statute. The operative layoff-notice regime for Wyoming 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 Wyoming Department of Workforce Services 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. Wyoming adds no shorter notice, no lower employer-size trigger, and no statutory severance mandate.

How severance is taxed in Wyoming#

Wyoming has NO state income tax withholding on wages, severance, bonuses, commissions, or any other earned compensation. Wyoming has never adopted a broad-based state-level individual income tax; the Wyoming Constitution at Art. 15, Sec. 18 (added by 1974 referendum following the energy boom) limits the legislature's ability to impose one. Per the Tax Foundation's 2025 review, Wyoming is one of eight states with no individual income tax (Alaska, Florida, Nevada, New Hampshire — which repealed its remaining interest-and-dividends tax effective January 1, 2025 — South Dakota, Tennessee, Texas, and Wyoming). Severance paid to a Wyoming employee is therefore subject ONLY to federal taxes: the federal supplemental withholding rate is 22% on amounts under $1,000,000 cumulative for the year and 37% on amounts above (IRC § 3402(g); IRS Publication 15). Plus FICA: Social Security 6.2% up to the $184,500 wage base, Medicare 1.45% on all wages, and an additional 0.9% Medicare on wages above $200,000 single / $250,000 MFJ. NO state withholding applies on wages. Wyoming's state tax base is built on the mineral severance tax (oil, gas, coal, trona), sales and use tax (state rate 4.0%, plus optional county 1%–2% local sales tax), property tax, and various excise taxes — leveraging the state's extractive-industry economy. Wyoming has no state disability insurance, no statewide paid family leave premium, and no statewide transit tax.

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FAQ#

Does Wyoming require severance pay?

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

How is severance taxed in Wyoming?

Wyoming has NO state income tax withholding on wages — Wyoming has never adopted a broad-based individual income tax, and the Wyoming Constitution at Art. 15, Sec. 18 (added by 1974 referendum) limits the legislature's ability to impose one. Per the Tax Foundation's 2025 review, Wyoming is one of eight states with no individual income tax (Alaska, Florida, Nevada, New Hampshire as of January 1, 2025, South Dakota, Tennessee, Texas, and Wyoming). Severance paid to a Wyoming employee is therefore subject ONLY to federal taxes: the federal supplemental withholding rate is 22% on amounts under $1,000,000 cumulative for the year and 37% on amounts above (IRC § 3402(g); IRS Publication 15). Plus FICA: Social Security 6.2% up to the $184,500 wage base, Medicare 1.45% on all wages, and an additional 0.9% Medicare on wages above $200,000 single / $250,000 MFJ. No state withholding applies on wages. This makes Wyoming one of the most tax-favorable states for severance recipients — a $100,000 severance subject to 22% federal supplemental withholding plus FICA leaves you with approximately $70,350 (no state tax to add), compared to ~$64,650 in a 6% state-tax jurisdiction and ~$58,650 in NYC (NY 11.70% + NYC 4.25%). Wyoming has no state disability insurance, no statewide PFL premium, and no statewide transit tax.

Does Wyoming have a mini-WARN statute?

No. Wyoming 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 Wyoming Department 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. Wyoming adds no shorter notice, no lower employer-size trigger, and no statutory severance mandate.

Does OWBPA apply in Wyoming?

Yes. OWBPA is federal (29 U.S.C. § 626(f)) and applies in all states. If you are age 40 or older and your Wyoming 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 Wyoming Fair Employment Practices Act (W.S. § 27-9-101 et seq.) separately prohibits age discrimination (40+) by employers with 2 or more employees — a substantially lower threshold than the federal ADEA's 20-employee minimum, so virtually all Wyoming employers are covered by state law. A release of state-law age claims under WFEPA does not require OWBPA-compliant 21/45/7 procedures, but the federal ADEA release portion still does.

Can I collect Wyoming unemployment while receiving severance?

It depends on how the severance is structured. Wyoming's unemployment severance treatment lives at W.S. § 27-3-313 (Disqualifications from benefits) and related sections of the Wyoming Employment Security Law. In practice, the Wyoming Department of Workforce Services Unemployment Insurance Division treats severance pay based on allocation: severance designated as 'wages in lieu of notice' or salary continuation tied to a specific notice period typically offsets UI benefits week-by-week during the allocated weeks; a lump-sum severance not designated to specific weeks is more likely to be allocated to the separation date. Practical takeaways: (a) file your Wyoming UI claim with Wyoming DWS on or shortly after your last day worked at wyui.wyo.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) Wyoming's UI maximum weekly benefit amount is in the $629 range for 2026 — verify the live figure at dws.wyo.gov before relying on net-of-benefits figures.

Are non-competes enforceable in Wyoming after a layoff?

Often yes if reasonable. Wyoming has no statute governing employer non-competes; the controlling framework is the common-law 'reasonableness' standard articulated by the Wyoming Supreme Court in Tench v. Weaver, 374 P.2d 27 (Wyo. 1962) (foundational), refined and modernized in Hopper v. All Pet Animal Clinic, Inc., 861 P.2d 531 (Wyo. 1993) (the leading modern case), and CBM Geosolutions, Inc. v. Gas Sensing Technology Corp., 2009 WY 113 (refinement). Under Wyoming's reasonableness framework, a non-compete must (1) protect a legitimate business interest (trade secrets, confidential information, customer relationships, goodwill), (2) be reasonable in DURATION, (3) reasonable in GEOGRAPHIC scope, (4) reasonable in the SCOPE of restricted activities, (5) be supported by adequate consideration, and (6) not impose undue hardship on the employee or violate public policy. Wyoming courts have judicial blue-pencil authority to NARROW overbroad covenants (Hopper, 861 P.2d at 543). Continued at-will employment is generally sufficient consideration for a non-compete signed during ongoing employment under Wyoming law. Practical takeaway: in Wyoming, a post-separation non-compete reasonable in time, place, and scope is generally enforceable — so the non-compete release clause in your severance offer has real value. Have an attorney review duration, geography, and scope before signing.

Why is Wyoming one of the most tax-favorable states for severance?

Wyoming has never adopted a state-level individual income tax — wages, salaries, severance, bonuses, commissions, interest, dividends, and capital gains are all exempt from any Wyoming state income tax. The Wyoming Constitution at Art. 15, Sec. 18 (added by 1974 referendum) explicitly limits the legislature's ability to impose an income tax, reinforcing the no-income-tax status as a structural feature of Wyoming's tax base. The state tax base is built on the mineral severance tax (oil, gas, coal, trona — leveraging Wyoming's extractive-industry economy), sales and use tax (state 4.0%), property tax, and excise taxes. For severance recipients, this makes Wyoming one of the most tax-favorable states. For a $100,000 Wyoming severance, the after-tax outcome is approximately: $100,000 gross − $22,000 federal supplemental withholding (22%) − $6,200 Social Security (6.2% up to wage base) − $1,450 Medicare (1.45%) = ~$70,350 net (no state tax). Compare to: California ($63,750 net at 6.6% state), New York ($58,650 net at 11.70% state, more for NYC residents adding ~4.25%), Hawaii ($59,350 net at 11.0% state top bracket), Oregon ($62,350 net at 8% state), Vermont ($61,600 net at 8.75% state top bracket). For an executive-level $1,000,000+ severance hitting the federal 37% supplemental rate on amounts over $1M, Wyoming's zero-state-tax advantage is even more meaningful. Combined with no state estate tax, no statewide payroll-deduction PFL premium, and no state disability insurance premium, Wyoming is a structurally favorable jurisdiction for severance recipients on tax terms.