Does Massachusetts require severance pay?

No Massachusetts statute generally requires private employers to pay severance for an ordinary layoff. The distinctive Massachusetts obligation is different: under the Massachusetts Noncompetition Agreement Act (Mass. Gen. Laws c. 149 § 24L), any enforceable post-employment non-compete must include a "garden leave clause" providing at least 50% of the employee's highest annualized base salary during the restricted period (or other mutually-agreed consideration specified in the agreement). That is not severance for a layoff — it is consideration tied to a non-compete. Note also that § 24L bars enforcement of non-competes against employees who were "terminated without cause or laid off," so a laid-off worker generally cannot be held to a non-compete in MA at all.

How is severance taxed in Massachusetts?

Massachusetts withholds at a flat 5% on all wages, including severance treated as supplemental wages, per Circular M (effective January 1, 2026). There is no separate supplemental rate — the same 5% applies to bonuses, severance, and regular pay. On top of that, the 4% surtax ("Fair Share Amendment") applies to Part B taxable income above $1,107,750 for tax year 2026 (inflation-indexed annually by MA DOR). Once your annualized regular wages plus the severance payment exceed the threshold, the marginal Massachusetts rate on amounts above $1,107,750 is 9%. Plus federal supplemental withholding of 22% (37% on cumulative amounts above $1,000,000 in the year) and FICA (Social Security 6.2% up to the wage base, Medicare 1.45% plus 0.9% additional Medicare above the threshold). State income tax is reconciled on Form 1 (MA Resident Income Tax Return).

Does Massachusetts have a mini-WARN?

Not in the enforceable sense that California, New York, New Jersey, or Illinois do. Mass. Gen. Laws c. 151A § 71B requires an employer closing a facility to report the closing to the Department of Unemployment Assistance — but the statute imposes no advance-notice obligation to affected employees and specifies no penalty for non-compliance. Mass. Gen. Laws c. 149 § 182 expresses a voluntary 90-day "good-faith effort" standard, but it applies only to companies financed by specifically enumerated MA quasi-public agencies and has no penalty for ordinary private employers. The operative layoff-notice regime in Massachusetts is therefore federal WARN (29 U.S.C. §§ 2101–2109): employers with 100+ full-time employees must give 60 days advance written notice for a mass layoff (50+ affected at a single site constituting 33% of the workforce, or 500+ regardless of percentage) or a plant closing, with back-pay liability for missed days.

Can I collect Massachusetts unemployment while receiving severance?

It depends on the structure of the severance. Per Massachusetts Department of Unemployment Assistance (DUA) guidance, severance paid unconditionally (without requiring you to sign a release of claims) is treated as "disqualifying remuneration" allocated to a specific period and will delay UI benefits for the weeks it covers — for example, six weeks of pay-in-lieu delays UI for six weeks. By contrast, severance conditioned on signing a release of claims is generally NOT treated as disqualifying remuneration and does not delay benefits, regardless of whether it is paid as a lump sum or in installments. Lump-sum payments tied to certain plant closings are also excluded. File your DUA claim as soon as you separate and disclose both the amount and the conditions attached to the severance; DUA makes the determination.

What is the Massachusetts Garden Leave Act and how does it interact with my severance?

The Massachusetts Noncompetition Agreement Act (Mass. Gen. Laws c. 149 § 24L), enacted in 2018, requires that any enforceable post-employment non-compete include a "garden leave clause" paying at least 50% of the employee's highest annualized base salary (averaged over the two years before termination) during the entire restricted period — paid pro-rata under MA wage-payment laws, and not unilaterally discontinued by the employer except on the employee's breach. The restricted period itself is capped at 12 months (24 months if the employee breached a fiduciary duty or unlawfully took employer property), and the agreement must be presented at the earlier of a formal offer or 10 business days before the employment start (or 10 business days before becoming effective if signed mid-employment). Critically for laid-off workers: § 24L bars enforcement of a non-compete against an employee who was "terminated without cause or laid off" — so if you are laid off in Massachusetts, your existing non-compete is generally unenforceable, and you do not need to bargain for garden-leave pay or a separate non-compete release as part of your severance. If your employer nonetheless offers severance specifically in exchange for a non-compete release, you can negotiate that consideration away because the underlying non-compete is already void.

Are non-competes enforceable in Massachusetts after a layoff?

Generally no. Mass. Gen. Laws c. 149 § 24L expressly bars enforcement of a post-employment non-compete against any employee who was "terminated without cause or laid off." It also bars enforcement against employees classified as nonexempt under the FLSA, against interns or students in short-term employment, and against employees age 18 or younger. Customer non-solicitation, employee non-solicitation, and trade-secret protections are NOT governed by § 24L and remain enforceable under common law and Mass. Gen. Laws c. 93 § 42 (Massachusetts Defend Trade Secrets statute). If your severance agreement includes a "non-compete release," verify (1) whether you were laid off or terminated without cause (§ 24L likely voids the underlying non-compete), and (2) whether the agreement also tries to extract a non-solicitation or trade-secret waiver beyond § 24L's scope — those are still negotiable.

Massachusetts Severance — Garden Leave Act, 5% + 4% Surtax, 2026

By Severance Calculator Editorial · Updated May 12, 2026

Massachusetts WARN: what applies

Massachusetts does not have an enforceable mini-WARN. Mass. Gen. Laws c. 151A § 71B requires a covered employer closing a facility to report the closing to the Department of Unemployment Assistance (DUA) so that affected employees can be flagged for enhanced reemployment services — but it imposes no advance-notice obligation to employees and specifies no penalty for non-compliance. Mass. Gen. Laws c. 149 § 182 sets a voluntary "good-faith effort" 90-day standard, but only as a condition of receiving financing from specifically enumerated Massachusetts quasi-public agencies, with no penalty for ordinary employers. Accordingly, the operative layoff-notice regime for private employers in Massachusetts is federal WARN (29 U.S.C. §§ 2101–2109): employers with 100+ full-time employees must give 60 days advance written notice for a mass layoff (50+ affected at a single site of employment that constitutes 33% of the active workforce, or 500+ regardless of percentage) or a plant closing.

How severance is taxed in Massachusetts

Massachusetts has a flat 5% personal income tax on wages, bonuses, and severance under Mass. Gen. Laws c. 62. There is no separate supplemental rate — employers withhold 5% on supplemental amounts using the Circular M percentage-method tables. The 4% surtax (Mass. Const. amend. art. XLIV, the "Fair Share Amendment," effective tax year 2023) applies to Part B taxable income above an inflation-adjusted threshold of $1,107,750 for tax year 2026 — bringing the marginal rate on amounts above the threshold to 9%. The MA DOR Circular M 2026 percentage-method tables incorporate the surtax: if annualized regular wages plus supplemental payment exceed $1,107,750, the employer withholds 9% on the portion above the threshold and 5% on the rest. On top of MA withholding, severance is subject to the federal 22% supplemental rate (37% on cumulative amounts above $1,000,000 in a calendar year) and FICA.

Calculate your situation

Inputs default to Massachusetts; adjust to your specifics.

Your situation

Role level

Years of tenure

Base salary ($)

State of employment

Age

Severance benchmarks

Typical benchmark

$24,519

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	$24,519
Good	12.5	$40,865
Aggressive	20.0	$65,385

Tax breakdown (typical band)

Gross	$24,519
Federal supplemental	−$5,394
State supplemental	−$1,226
FICA — Social Security	−$1,520
FICA — Medicare	−$356
FICA — Additional Medicare	−$0
Net cash	$16,023

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 Massachusetts require severance pay?: No Massachusetts statute generally requires private employers to pay severance for an ordinary layoff. The distinctive Massachusetts obligation is different: under the Massachusetts Noncompetition Agreement Act (Mass. Gen. Laws c. 149 § 24L), any enforceable post-employment non-compete must include a "garden leave clause" providing at least 50% of the employee's highest annualized base salary during the restricted period (or other mutually-agreed consideration specified in the agreement). That is not severance for a layoff — it is consideration tied to a non-compete. Note also that § 24L bars enforcement of non-competes against employees who were "terminated without cause or laid off," so a laid-off worker generally cannot be held to a non-compete in MA at all.
How is severance taxed in Massachusetts?: Massachusetts withholds at a flat 5% on all wages, including severance treated as supplemental wages, per Circular M (effective January 1, 2026). There is no separate supplemental rate — the same 5% applies to bonuses, severance, and regular pay. On top of that, the 4% surtax ("Fair Share Amendment") applies to Part B taxable income above $1,107,750 for tax year 2026 (inflation-indexed annually by MA DOR). Once your annualized regular wages plus the severance payment exceed the threshold, the marginal Massachusetts rate on amounts above $1,107,750 is 9%. Plus federal supplemental withholding of 22% (37% on cumulative amounts above $1,000,000 in the year) and FICA (Social Security 6.2% up to the wage base, Medicare 1.45% plus 0.9% additional Medicare above the threshold). State income tax is reconciled on Form 1 (MA Resident Income Tax Return).
Does Massachusetts have a mini-WARN?: Not in the enforceable sense that California, New York, New Jersey, or Illinois do. Mass. Gen. Laws c. 151A § 71B requires an employer closing a facility to report the closing to the Department of Unemployment Assistance — but the statute imposes no advance-notice obligation to affected employees and specifies no penalty for non-compliance. Mass. Gen. Laws c. 149 § 182 expresses a voluntary 90-day "good-faith effort" standard, but it applies only to companies financed by specifically enumerated MA quasi-public agencies and has no penalty for ordinary private employers. The operative layoff-notice regime in Massachusetts is therefore federal WARN (29 U.S.C. §§ 2101–2109): employers with 100+ full-time employees must give 60 days advance written notice for a mass layoff (50+ affected at a single site constituting 33% of the workforce, or 500+ regardless of percentage) or a plant closing, with back-pay liability for missed days.
Can I collect Massachusetts unemployment while receiving severance?: It depends on the structure of the severance. Per Massachusetts Department of Unemployment Assistance (DUA) guidance, severance paid unconditionally (without requiring you to sign a release of claims) is treated as "disqualifying remuneration" allocated to a specific period and will delay UI benefits for the weeks it covers — for example, six weeks of pay-in-lieu delays UI for six weeks. By contrast, severance conditioned on signing a release of claims is generally NOT treated as disqualifying remuneration and does not delay benefits, regardless of whether it is paid as a lump sum or in installments. Lump-sum payments tied to certain plant closings are also excluded. File your DUA claim as soon as you separate and disclose both the amount and the conditions attached to the severance; DUA makes the determination.
What is the Massachusetts Garden Leave Act and how does it interact with my severance?: The Massachusetts Noncompetition Agreement Act (Mass. Gen. Laws c. 149 § 24L), enacted in 2018, requires that any enforceable post-employment non-compete include a "garden leave clause" paying at least 50% of the employee's highest annualized base salary (averaged over the two years before termination) during the entire restricted period — paid pro-rata under MA wage-payment laws, and not unilaterally discontinued by the employer except on the employee's breach. The restricted period itself is capped at 12 months (24 months if the employee breached a fiduciary duty or unlawfully took employer property), and the agreement must be presented at the earlier of a formal offer or 10 business days before the employment start (or 10 business days before becoming effective if signed mid-employment). Critically for laid-off workers: § 24L bars enforcement of a non-compete against an employee who was "terminated without cause or laid off" — so if you are laid off in Massachusetts, your existing non-compete is generally unenforceable, and you do not need to bargain for garden-leave pay or a separate non-compete release as part of your severance. If your employer nonetheless offers severance specifically in exchange for a non-compete release, you can negotiate that consideration away because the underlying non-compete is already void.
Are non-competes enforceable in Massachusetts after a layoff?: Generally no. Mass. Gen. Laws c. 149 § 24L expressly bars enforcement of a post-employment non-compete against any employee who was "terminated without cause or laid off." It also bars enforcement against employees classified as nonexempt under the FLSA, against interns or students in short-term employment, and against employees age 18 or younger. Customer non-solicitation, employee non-solicitation, and trade-secret protections are NOT governed by § 24L and remain enforceable under common law and Mass. Gen. Laws c. 93 § 42 (Massachusetts Defend Trade Secrets statute). If your severance agreement includes a "non-compete release," verify (1) whether you were laid off or terminated without cause (§ 24L likely voids the underlying non-compete), and (2) whether the agreement also tries to extract a non-solicitation or trade-secret waiver beyond § 24L's scope — those are still negotiable.