Arkansas Severance Pay Laws (2026): Is Severance Required?

We found no Arkansas law that requires an employer to pay severance. In Arkansas, severance is owed when a company policy, contract or separation agreement promises it: the Arkansas Department of Labor and Licensing will take a wage claim for severance pay only if you give it "a copy of the company policy that states you will be paid for the type of pay you are claiming."

The Arkansas statute that most directly governs severance is an unemployment rule, Ark. Code 11-10-517(1), which delays benefits while separation pay lasts. For how other states handle severance and the federal rules in full, see our severance pay laws by state guide.

Information last verified on October 7, 2026. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers Arkansas law on severance pay: the absence of a state mandate or layoff-notice law, wage claims for promised severance with the Department of Labor and Licensing, and the unemployment rule on separation pay (Ark. Code 11-10-517(1)). Federal rules appear in short notes; the full federal layer is on our severance pay laws guide. For final-pay deadlines, see Arkansas final paycheck laws; for benefit amounts, see Arkansas unemployment benefits.

Is severance pay required in Arkansas?

We found no Arkansas law that requires it, but this finding has a limit worth knowing. The official Arkansas Code website could not be reached when we researched this page, so we could not search Title 11 of the Arkansas Code section by section.

The finding rests instead on four things: a search of statute titles in our own copy of the Arkansas Code for severance, separation and dismissal pay, which found no mandate; the Division of Workforce Services' 2026 unemployment handbook and WARN page, which describe no state layoff law; the Department of Labor and Licensing's wage-claim page, which requires a company policy before it will pursue severance; and the Court of Appeals' Martin decision, which treats severance as a payment set by agreement. The U.S. Department of Labor says the federal Fair Labor Standards Act does not require severance either.

No Arkansas WARN act: federal WARN applies

We found no Arkansas law requiring advance notice of a plant closing or mass layoff. The Division of Workforce Services says the Governor designated it "as the recipient of mandatory notices from employers of plant closings and layoffs under the Worker Adjustment and Retraining Notification Act (WARN)," the federal law.

Federal WARN requires 60 days' written notice from employers with 100 or more employees, not counting part-time employees (or 100 or more employees, counting part-time workers, who together work at least 4,000 hours a week, not counting overtime), before a covered plant closing or mass layoff, and an employer that skips it owes back pay and benefits for up to 60 days (29 U.S.C. 2101-2102, 2104). Our severance pay laws guide explains who is covered.

Unpaid promised severance in Arkansas

A wage claim with the Department of Labor and Licensing

The Labor Standards Section of the Arkansas Department of Labor and Licensing investigates wage claims, and its page lists severance pay among the kinds of pay it will consider, with conditions:

• You must show the promise. For vacation, sick, holiday, bonus or severance pay, you must provide a copy of the company policy saying you will be paid that type of pay.
• Dollar and salary limits. The section investigates claims from workers owed $2,000 or less. It does not take a claim if the amount in dispute is more than $2,000 or if you make more than $50,000 a year.
• One route only. You cannot pursue both a civil lawsuit and a wage claim for the same wages.

If the claim is valid, the section is authorized to take legal action to collect the wages. Its page does not state a deadline for filing, and we did not verify one.

Is severance "wages" for Arkansas double damages?

We could not confirm that it is. Ark. Code 11-4-405, as amended by Act 853 of 2019, requires an employer that discharges an employee to pay "all wages due by the next regular payday," and an employer that misses that payment by seven days after the next regular payday owes double the wages due.

We found no Arkansas statute or court decision holding that promised severance is "wages due" under that section, so this page does not say double damages apply to unpaid severance. We also did not confirm whether 11-4-405 has been amended since 2019. The rest of the final-pay rules are on Arkansas final paycheck laws.

Company plans and contracts

An ongoing company severance program can be a benefit plan under ERISA, the federal benefits law, which supersedes state laws that relate to covered plans (29 U.S.C. 1002(1), 1144(a)); the U.S. Department of Labor's Employee Benefits Security Administration may help with an employer-sponsored plan. A promise outside the wage-claim limits is a contract matter for the courts. Arkansas Code section 16-56-111 provides five years for actions to enforce written obligations, and section 16-56-105 provides three years for actions on a contract not in writing. Which period fits your promise is a question for a lawyer, and we read both sections in a 2020 copy of the code, so we did not confirm later amendments.

Severance and Arkansas unemployment benefits

Severance delays Arkansas unemployment benefits. Ark. Code 11-10-517(1) says: "Separation payments are disqualifying for the number of weeks following the date of the separation that equals the number of weeks of wages received in the separation payment."

How the weeks are counted, under the statute as the Court of Appeals quoted it:

• The employer specifies the weeks. The employer must state the total separation payment and the number of weeks it represents.
• If it does not, the Division of Workforce Services allocates the payment using your average weekly wage.
• A partial week counts as a full week.
• Not disqualifying: severance from the armed services, back pay paid to settle a claim or grievance, and supplemental unemployment benefits.

This version of the rule applies to initial claims filed on or after January 1, 2018. We read its text as quoted in a 2021 court opinion because the official code site could not be reached, so we did not confirm whether it has been amended since.

In Martin v. Director, Department of Workforce Services, 2021 Ark. App. 66, the severance agreement specified 12 weeks of pay. The Court of Appeals held that the disqualification ran 12 weeks from the final day of employment, not the 18 weeks the Board had applied, and reversed and remanded. The court also noted that Workforce Services forms say "severance pay" or "dismissal pay" while the statute says "separation pay," and treated them as the same thing.

The Division's 2026 claimant handbook says: "Severance pay, pay in lieu of notice, or continuing to be paid by an employer may affect benefits. Be sure to report any of this pay when filing a claim for benefits." Benefit amounts and filing are on Arkansas unemployment benefits.

What an Arkansas severance agreement can ask you to give up

Apart from the unemployment rule below, we did not establish whether Arkansas has any law limiting release, nondisclosure or non-disparagement terms in a separation agreement, or allowing or barring a release of unpaid-wage claims. The code could not be searched directly and a search of the 2025 session surfaced nothing, so this page does not say no such law exists.

A release in a severance agreement cannot take away your right to unemployment benefits. Ark. Code 11-10-107 makes an agreement by an individual to waive or release the right to unemployment benefits void, and bars an employer from requiring or accepting such a waiver from anyone in its employ. We read that section in an unofficial 2020 copy of the Arkansas Code and could not confirm the current text on an official source.

Non-compete terms in a severance agreement

Arkansas Code section 4-75-101 provides that a non-compete tied to employment is enforceable if the employer has a protectable business interest and the restriction is limited in time and scope to no more than necessary to defend that interest, and that a post-termination restriction of two years is presumptively reasonable. We read that text in a 2020 copy of the code because the official code site could not be reached, so we did not confirm later amendments.

Federal limits that apply in Arkansas

Our severance pay laws guide explains each of these:

• Workers 40 and older. A release of federal age-discrimination claims must give you at least 21 days to consider it (45 in a group layoff) and 7 days to revoke it after signing (29 U.S.C. 626(f)).
• Sexual harassment and assault. A nondisclosure or non-disparagement clause agreed to before a dispute arises cannot be enforced in court in a sexual assault or sexual harassment dispute (42 U.S.C. 19403).
• Labor-law rights. The NLRB's McLaren Macomb decision, 372 NLRB No. 58 (2023), bars severance agreements that require employees to broadly give up their rights under the National Labor Relations Act. The NLRB General Counsel said in memo GC 26-04 (August 26, 2026) that she is arguing to overrule it in an open case, so it remains Board law until the Board acts.

Because the unemployment delay turns on the weeks your agreement assigns to the payment, check that number before you sign and keep a copy of the company policy if you may need to file a wage claim.

Recent changes

A web search for 2025 Arkansas acts on severance, separation agreements, plant closings or mass layoffs surfaced none that apply; it was not a search of the Legislature's own bill index. The 2026 session was a fiscal session, and we did not check bills for the 2027 regular session.

Related

• Severance pay laws by state
• Arkansas unemployment benefits
• Arkansas final paycheck laws

Disclaimer: This article provides general legal information about Arkansas severance pay law (Ark. Code 11-10-517 and 11-4-405) and the federal laws that apply in Arkansas. It is not legal advice. The information was verified on October 7, 2026. For advice about your situation, contact the Arkansas Division of Workforce Services about unemployment, the Labor Standards Section of the Arkansas Department of Labor and Licensing about wage claims, a legal aid office, or a lawyer licensed in Arkansas.

Last updated: October 7, 2026.

Frequently Asked Questions

Is severance pay required by law in Arkansas?

We found no Arkansas law requiring it. The Department of Labor and Licensing takes a severance wage claim only if you provide the company policy promising that pay.

Does severance affect unemployment in Arkansas?

Yes. Under Ark. Code 11-10-517(1), separation pay disqualifies you for the number of weeks of wages it represents, counted from the date of separation.

How many weeks does severance delay Arkansas unemployment?

As many weeks as the payment represents, which the employer must specify. In Martin v. Director (2021 Ark. App. 66), a 12-week severance meant a 12-week disqualification.

Can I file a wage claim for unpaid severance in Arkansas?

Yes, if a company policy promises it, you are owed $2,000 or less, and you earn $50,000 or less a year. You cannot also sue for the same wages.

Does Arkansas have a state WARN Act?

We found none. The Division of Workforce Services receives notices under the federal WARN Act, which generally covers employers with 100 or more full-time employees.

How long do I have to sign a severance agreement in Arkansas?

We found no Arkansas rule on review periods. If you are 40 or older, federal law requires at least 21 days to consider a release of age-discrimination claims (45 in a group layoff) and 7 days to revoke it after signing (29 U.S.C. 626(f)).