Massachusetts Severance Pay Laws (2026): When Is Severance Required?

No Massachusetts law requires most employers to pay severance. The exceptions are narrow: M.G.L. c. 149, s. 183 and s. 184 call for a lump-sum severance payment to employees of certain large employers who lose their jobs around a change of control, though a federal appeals court held s. 183 preempted by federal law in 1993, and c. 149, s. 190(k) protects live-in domestic workers fired without cause.

Outside those cases, severance is whatever a contract, plan or policy promises, and the Supreme Judicial Court's reasoning in 2025 suggests a promise to pay it is enforced as a contract rather than under the Wage Act. For how other states handle severance and the full federal rules, see our severance pay laws by state guide.

Information last verified on October 8, 2026. This article has not been reviewed by a licensed lawyer.

Jurisdiction scope: This article covers Massachusetts law on severance pay: the change-of-control severance statutes (M.G.L. c. 149, s. 183 and s. 184), the domestic worker rule (c. 149, s. 190(k)), the Wage Act (c. 149, s. 148 and s. 150), the plant-closing provisions of c. 151A, s. 71A to 71G, and the unemployment rules in c. 151A, s. 1, with short notes on the federal rules that apply in Massachusetts. It does not cover when your final paycheck is due; see Massachusetts final paycheck laws. It does not cover unemployment benefit amounts or how to file; see Massachusetts unemployment benefits.

Is severance pay required in Massachusetts?

For most workers, no. Massachusetts has no statute that requires an employer to pay severance when it lays off or fires someone. A search of the Massachusetts General Laws for "severance" on the legislature's own site turned up only the change-of-control statutes, the domestic worker statute and a handful of public-employee and unrelated provisions, nothing creating a general private-sector entitlement. That was a keyword search of the legislature's tool, not a chapter-by-chapter read of the whole code.

The Wage Act's definition of wages in c. 149, s. 148 names holiday and vacation payments, not severance. Federal law does not fill the gap either: the U.S. Department of Labor says there is no requirement in the Fair Labor Standards Act for severance pay.

Massachusetts statutes call for severance in three situations, though a federal court has held the first one preempted by federal law (see below):

Severance after a change of control (c. 149, s. 183)

Section 183 is written as a severance mandate, but a federal appeals court has held it preempted by federal law (see below), and on its terms it applies only to a specific kind of corporate transaction. It covers employees of a "control transferor," which the statute limits to certain Massachusetts corporations, certain utilities, banks and trust companies, and certain foreign corporations. The employer must have had 50 or more full-time-equivalent employees in Massachusetts at some point in the 12 months before the transfer.

A transfer of control means someone acquires 50 percent or more of the employer's voting securities. Two groups of employees are covered:

• After the transfer: employees whose employment is terminated within 24 calendar months after the transfer of control (s. 183(b)).
• Before the transfer: employees terminated during the shorter of the 12 months before the transfer or the period between the buyer acquiring a 5 percent interest and completing the 50 percent acquisition (s. 183(c)).

How much and when

On its face, the statute entitles an eligible employee to:

"a one time lump sum payment from the control transferee equal to the product of twice his weekly compensation multiplied by each completed year of service"

The statute requires the new owner to pay within one regular pay period after the employee's last day for terminations after the transfer, or within four regular pay periods after the transfer for terminations before it.

Who is excluded

Under s. 183(d), the statute does not apply if:

• the employee has an express contract that provides a termination payment greater than the statutory amount;
• the employee worked for the control transferor for less than 3 years;
• control passed within a family (to a spouse, sibling, lineal descendants or a fiduciary); or
• control was obtained by enforcing a good-faith security interest, an assignment for the benefit of creditors, a receivership, a bankruptcy or another judicial process.

"Termination of employment" here means an involuntary termination consistent with the eligibility standards for unemployment benefits in c. 151A, s. 25. A voluntary resignation is not covered.

Notice and enforcement

The new owner must give each employee written notice of these rights within 30 days after the transfer is completed and notify the department the statute names; the Attorney General can fine a failure to do so up to $1,000 (s. 183(e)). Section 183(f) provides for enforcement with the Wage Act remedies in c. 149, s. 148 to 150, plus other civil remedies, and by the Attorney General.

Held preempted by federal law

In Simas v. Quaker Fabric Corp. of Fall River, 6 F.3d 849 (1st Cir. 1993), the federal appeals court for Massachusetts held that s. 183 is preempted by the federal Employee Retirement Income Security Act (ERISA), because the payments it requires amount to an employee benefit plan. The court affirmed a judgment against two employees who sued their employer for the s. 183 payment after a takeover; the employer had moved the case from state court to federal court.

So a claim for this payment is unlikely to succeed, at least in federal court. Simas did not decide s. 184, and we found no court decision on it, so whether s. 184 can be enforced is untested. Talk to a lawyer before relying on either statute.

Severance after a contested shareholder meeting (c. 149, s. 184)

Section 184 is a companion rule for publicly registered corporations, meaning companies whose voting stock is registered under the federal Securities Exchange Act and that are subject to c. 156D, s. 8.06(b). It applies when the corporation is subject to what the statute calls a "contested meeting."

The statute says an employee terminated within the shorter of 12 calendar months after the contested meeting date or the period between that date and a transfer of control is entitled to:

"a one time lump-sum payment from the control transferor equal to the product of twice his weekly compensation multiplied by each completed year of service"

Here the employer itself pays, within one regular pay period after the employee's last day. Similar exclusions apply (a contract providing a greater termination payment, less than 3 years of service, family transfers, enforcement of a security interest or bankruptcy). Amounts paid under s. 184 are credited against anything owed under s. 183, so an employee does not collect twice. The employer must give written notice to employees within 10 business days of a contested meeting, and the Attorney General can fine a failure up to $1,000 (s. 184(e)). As noted above, no court decision we found has addressed whether s. 184 survives the ERISA preemption that Simas applied to s. 183, so treat it as untested.

Severance for live-in domestic workers (c. 149, s. 190(k))

Massachusetts gives live-in domestic workers a separate protection. When an employer terminates a live-in domestic worker without cause, it must provide written notice and at least 30 days of lodging, either on site or in comparable off-site conditions, or:

"severance pay in an amount equivalent to the domestic worker's average earnings during 2 weeks of employment"

This duty does not apply if the employer makes a good-faith written allegation, with a reasonable basis, that the worker abused, neglected or otherwise harmed the employer's family or household members. Section 190 is among the sections that c. 149, s. 150 lets a worker enforce by a private lawsuit after first filing a complaint with the Attorney General.

Does Massachusetts have a mini-WARN Act?

Not a mandatory one. The plant-closing provisions in M.G.L. c. 151A, s. 71A to 71G set up a reemployment assistance program, but they do not require advance notice of a layoff. Section 71A defines "advance notification" as:

"a voluntary declaration in writing given by the employer to the employee or to the employee's authorized collective bargaining agent that a plant closing will occur"

What the law does require is a report. Under s. 71B(a), an employer closing a facility "shall thereupon promptly report to the commissioner," who then certifies whether a plant closing occurred. The section we read sets no advance-notice period and no pay in lieu of notice. Section 71A defines the commissioner as the director of the department of career services, which operates today as the MassHire Department of Career Services.

Reemployment assistance benefits after a certified closing

For these provisions, a "facility" is a place of employment in Massachusetts with 50 or more employees in any month of the 6 months before certification, and a "plant closing" is a permanent cessation or reduction that permanently separates at least 90 percent of its employees within 6 months (s. 71A). Seasonal employers are excluded, and the employer must have owned or operated the facility for at least one year.

Workers terminated in a certified plant closing or covered partial closing may receive reemployment assistance benefits (s. 71F). The weekly amount is the difference between the weekly unemployment benefit and 75 percent of the worker's average weekly wage, subject to an indexed cap. The total is 13 weeks, reduced by the weeks of advance notice the employer gave and the weeks of separation pay the worker received, and the worker must take part in the reemployment assistance program when one is available.

That is the one place Massachusetts law links severance to plant closings: weeks of "separation pay," which s. 71A defines as an employer's or union's maintenance of an employee's wages after termination, shrink this extra benefit.

Federal WARN still applies

Federal WARN requires 60 days' written notice before a plant closing or mass layoff by employers with 100 or more employees, not counting part-time workers (or 100 or more employees, counting part-time workers, who together work at least 4,000 hours a week, not counting overtime), and allows back pay for up to 60 days for a violation (29 U.S.C. 2101, 2102, 2104). See our severance pay laws by state guide for the federal thresholds.

Pending: H.2127 would create a 60-day notice rule

H.2127 (194th General Court), "An Act relative to the notification of large job layoffs," would strike "voluntary" from the definition of advance notification and add a "mass layoff" category: 25 workers and 25 percent of the workforce, or at least 200 workers, within 30 days at a single site or municipality. It would require 60 days' written notice to the commissioner, including the elements federal WARN requires, before a plant closing, partial closing or mass layoff.

Status: pending, not law. On January 29, 2026 the bill was reported favorably by committee and referred to the House Committee on Ways and Means. The bill history showed no later action when we checked on October 8, 2026.

Is promised severance "wages" under the Massachusetts Wage Act?

Probably not, under current appellate reasoning. That matters because the Wage Act carries mandatory treble damages and a 3-year deadline, while a contract claim does not.

In Prozinski v. Northeast Real Estate Services, LLC, 59 Mass. App. Ct. 599 (2003), the Appeals Court held that severance pay is not wages under c. 149, s. 148. We rely here on how the Supreme Judicial Court described that case; we did not read the Prozinski opinion itself.

In Nunez v. Syncsort Inc., SJC-13709 (Mass. Oct. 22, 2025), the SJC held that retention bonuses contingent on staying employed to fixed dates are not wages. In doing so it listed Prozinski among the cases that "uniformly rejected" treating contingent pay as wages, describing it this way:

"Prozinski v. Northeast Real Estate Servs., LLC, 59 Mass. App. Ct. 599, 603 (2003) (severance pay not wages because contingent upon severance)"

You may see older commentary citing Juergens v. MicroGroup, Inc., 28 Mass. L. Rptr. 133 (Mass. Super. Ct. 2011), a Superior Court ruling on a motion to dismiss that declined to follow Prozinski and let a Wage Act severance claim proceed. It is a trial-court decision that predates Nunez and should not be read as the current rule.

The Attorney General's pay guide points the same way. It lists the pay the Wage Act protects as including "tips, earned vacation pay, promised holiday pay, and earned commissions that are definitely determined, due and payable," and severance is not on that list.

What this means for a claim

If your employer promised severance in a contract, offer letter, handbook or plan and did not pay, the claim is most likely for breach of contract. The general Massachusetts deadline for a breach-of-contract suit is six years after the claim accrues (G.L. c. 260, s. 2), but a severance plan governed by ERISA has its own claims procedure and deadlines, so act promptly. If the severance comes from a formal company plan, federal ERISA may govern it instead, because ERISA supersedes state laws that relate to covered employee benefit plans (29 U.S.C. 1144(a)).

The statutory severance under s. 183, s. 184 and s. 190 is different: those sections expressly carry the Wage Act remedies, discussed next, though s. 183 has been held preempted by ERISA.

How to claim statutory severance or unpaid wages

The Attorney General's Fair Labor Division handles complaints about unpaid wages; its pay guide lists the hotline as 617-727-3465. The guide also says workers can complain "even if they agreed to work for less than the law requires or agreed not to sue their employers."

Under c. 149, s. 150, a worker may file a civil lawsuit 90 days after filing a complaint with the Attorney General, or sooner with the Attorney General's written assent, and must sue "within 3 years after the violation" (the period is tolled while an Attorney General complaint is pending). A prevailing employee receives treble damages, plus costs and attorneys' fees.

The statutes extend those remedies to severance under s. 183, s. 184 and s. 190 (but see the ERISA preemption ruling on s. 183 above), and they apply to anything else that counts as wages, such as earned vacation pay. They likely do not apply to a plain contractual severance promise, for the reasons above.

When must severance be paid?

The Wage Act requires that "any employee discharged from such employment shall be paid in full on the day of his discharge" (c. 149, s. 148). That rule covers wages. Because promised severance is probably not wages, its timing is generally set by the agreement or plan that promises it. For when your final regular paycheck and accrued vacation are due, see Massachusetts final paycheck laws.

The change-of-control statutes set their own payment deadlines on their face: one regular pay period after the last day for post-transfer terminations under s. 183 and for s. 184, and four regular pay periods after the transfer for pre-transfer terminations under s. 183. Section 183 has been held preempted by ERISA (Simas), and s. 184 is untested.

Severance and Massachusetts unemployment benefits

Severance usually delays unemployment benefits in Massachusetts. Under c. 151A, s. 1(r)(3), "remuneration" includes payments received:

"as termination, severance or dismissal pay, or as payment in lieu of dismissal notice, whether or not notice is required"

So you are generally not in total unemployment for the weeks severance covers. The same definition excludes three kinds of payments:

• statutory change-of-control severance under c. 149, s. 183(b) and (c) and s. 184(b);
• payments for unused vacation or sick leave; and
• lump-sum severance paid in connection with a plant closing, which the definition ties to a facility of 50 or more employees where at least 50 percent are separated, as determined by the commissioner.

If benefits are denied for weeks you receive severance or pay in lieu of notice, your benefit year is extended by the number of weeks you were disqualified, up to 52 weeks (s. 1(c)). Separately, the definition of "retirement benefit" used for the pension offset does not include severance pay (s. 29).

The state's unemployment eligibility page says, "Income from severance, vacation time, sick time, and pensions may impact your benefit amount." Report any severance when you file. For benefit amounts and how to apply, see Massachusetts unemployment benefits.

Payments in exchange for a release

In White v. Commissioner of the Department of Employment & Training, 40 Mass. App. Ct. 249 (1996), the Appeals Court held that a lump sum paid under a "transition financial support agreement" only in exchange for a broad release of all claims was not severance pay under s. 1(r)(3). The court focused on the payment's main purpose, obtaining the release, and said its reasoning was limited to the facts and terms of that agreement. It does not mean every release-based payment is ignored for unemployment; the Department of Unemployment Assistance decides each case.

What a Massachusetts severance agreement can and cannot require

Releasing Wage Act claims

A severance or separation agreement cannot quietly sweep away Wage Act claims. In Crocker v. Townsend Oil Co., 464 Mass. 1 (2012), the SJC held that a release of existing Wage Act claims is enforceable only if:

"the release must be plainly worded and understandable to the average individual, and it must specifically refer to the rights and claims under the Wage Act that the employee is waiving"

A general release alone does not do it. Crocker involved a termination agreement with workers who said they had been misclassified as independent contractors, and the court left open whether a waiver of future Wage Act claims could ever be valid, calling that "far more problematic." The Wage Act itself says no employer may "by a special contract with an employee or by any other means exempt himself" from s. 148 or s. 150.

Because severance itself is probably not wages, Crocker matters most for anything else the release might cover: unpaid final wages, earned vacation pay and commissions.

A release in a severance agreement also cannot take away your right to unemployment benefits. Under M.G.L. c. 151A, s. 35, "no agreement by an individual to waive his right to benefits or any other right under this chapter" is valid, and no employer may "require any waiver by an employee of any right hereunder."

Confidentiality and non-disparagement terms

We found no general Massachusetts statute limiting nondisclosure or non-disparagement clauses in private severance agreements. That rests on a keyword search of the General Laws, not a full read, so treat it as unconfirmed. The one statute that surfaced, c. 41, s. 98H, applies only to a law enforcement agency's settlement of a misconduct complaint against an officer, which "shall not include a nondisclosure, non-disparagement or other similar clause" unless the complainant asks for one in writing.

Two sets of NDA bills are in the legislature. H.10, "An Act relative to nondisclosure agreements," had a joint committee hearing on November 4, 2025, with nothing later on its history page. H.2006 and H.2007, which concern NDAs relating to sexual harassment and discrimination, accompanied a study order (H.5281) on March 26, 2026 and were not enacted. None of these bills is law.

Non-compete terms in a severance agreement

The Massachusetts Noncompetition Agreement Act does not cover a non-compete made in connection with a separation if you are expressly given seven business days to rescind your acceptance (M.G.L. c. 149, s. 24L(a)), so the Act's limits do not protect you under such a clause. Check for that rescission window before you sign.

Federal limits that also apply

If you are 40 or older, a release of federal age-discrimination claims must give you at least 21 days to consider it (45 days in a group program) and 7 days to revoke it after signing (29 U.S.C. 626(f)). The National Labor Relations Board held in McLaren Macomb, 372 NLRB No. 58 (2023), that offering severance conditioned on broad confidentiality and non-disparagement terms can violate the NLRA; its General Counsel is now arguing to overrule that decision in a pending case. Our severance pay laws by state guide covers both.

Reading a Massachusetts severance offer

Ask first whether your situation fits one of the statutory rules: a sale or change of control of a large employer within the windows in s. 183 or s. 184, or live-in domestic work under s. 190(k). If it does, the statute sets an amount and a contract displaces it only by providing more, though s. 183 has been held preempted by ERISA (Simas) and s. 184 is untested, so get legal advice before counting on either.

Otherwise, read what the release covers. Under Crocker, a release reaches Wage Act claims only if it names them, so check whether the agreement mentions the Wage Act before you sign. Keep the offer letter, handbook or plan that describes severance, since an unpaid promise is likely enforced as a contract. Our severance pay laws by state guide has general guidance on reading and negotiating an offer.

Related

• Severance pay laws by state
• Massachusetts final paycheck laws
• Massachusetts unemployment benefits
• Massachusetts at-will employment laws

Disclaimer: This article provides general legal information about Massachusetts severance pay law (M.G.L. c. 149, s. 148, 150, 183, 184 and 190, and c. 151A) and the federal laws that apply in Massachusetts. It is not legal advice. The information was verified on October 8, 2026. For advice about your situation, contact the Attorney General's Fair Labor Division, the Department of Unemployment Assistance, a legal aid office or a lawyer licensed in Massachusetts.

Last updated: October 8, 2026.

Frequently Asked Questions

Is severance pay required by law in Massachusetts?

Not in general. Massachusetts statutes call for severance only in narrow cases: employees of certain large employers terminated around a change of control (M.G.L. c. 149, s. 183 and s. 184) and live-in domestic workers fired without cause (c. 149, s. 190(k)). A federal appeals court held s. 183 preempted by ERISA in 1993 (Simas v. Quaker Fabric), and s. 184 is untested. Otherwise severance depends on a contract, plan or policy.

How much severance does Massachusetts law require after a merger or takeover?

On its face, c. 149, s. 183 calls for a one-time lump sum equal to twice weekly compensation multiplied by each completed year of service, for covered employers with 50 or more full-time-equivalent employees in Massachusetts, excluding employees with less than 3 years of service. But in Simas v. Quaker Fabric Corp. of Fall River, 6 F.3d 849 (1st Cir. 1993), a federal appeals court held s. 183 preempted by ERISA, so a claim for it is unlikely to succeed, at least in federal court. Talk to a lawyer before relying on it.

Is severance considered wages under the Massachusetts Wage Act?

Probably not. In Nunez v. Syncsort (SJC, Oct. 22, 2025), the Supreme Judicial Court cited Prozinski (2003) for the rule that severance pay is not wages because it is contingent upon severance. The statutory severance in c. 149, s. 183, s. 184 and s. 190 is different: those sections carry Wage Act remedies by their terms, though s. 183 has been held preempted by ERISA.

Does Massachusetts have a mini-WARN Act?

Not a mandatory one. M.G.L. c. 151A, s. 71A defines advance notice of a plant closing as voluntary, and s. 71B requires the employer to report a closing to the state. H.2127, which would require 60 days' notice, was in House Ways and Means as of October 8, 2026.

Can I collect unemployment while receiving severance in Massachusetts?

Generally not for the weeks the severance covers, because c. 151A, s. 1(r)(3) counts severance and pay in lieu of notice as remuneration. Statutory change-of-control payments and certain plant-closing lump sums are excluded, and your benefit year can be extended by up to 52 weeks for the weeks you were disqualified (s. 1(c)).

Does signing a release mean my severance will not affect unemployment?

Not automatically. In White (1996), the Appeals Court held that a lump sum paid only in exchange for a broad release was not severance pay, but it limited that reasoning to the facts and terms of that agreement. The Department of Unemployment Assistance decides each case.

Can a Massachusetts severance agreement waive my Wage Act claims?

Only if the release is plainly worded, understandable to the average person and specifically refers to the Wage Act rights being waived (Crocker v. Townsend Oil Co., 464 Mass. 1 (2012)). A general release does not waive Wage Act claims.

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

We found no Massachusetts statute setting a review period for a private severance agreement. If you are 40 or older, federal law requires at least 21 days to consider a release of age claims (45 in a group program) and 7 days to revoke it (29 U.S.C. 626(f)).