I am getting "Box 15 employer ID should not be more than 16 characters in length with no spaces or dashes" on my W2. Can I ignore this warning?

You can ignore the warning - it won't affect your tax calculations - but you may not be able to e-file the return.

You can resolve this by removing any imported spaces or dashes and, if necessary drop however many characters you need to get to the 16-character limit.

If your state employer ID number is too long (too many digits, that is) to fit in the field, then just enter as many as you can in the box, and as space allows.  Your e-filed return will still go through just fine, as long as there are no other errors on your return.  Your state department of revenue will be able to easily identify your employer from their 9-digit federal EIN. 

The state employer ID number is really only a bureaucratic convenience for your state's department of revenue; it's simply not an essential element to the correct filing and processing of a valid personal income tax return (either state or federal).  Try to input it correctly if you can; but if you cannot, then it's not a problem. You can also omit any dashes and spaces.