Massachusetts Severance Pay laws & compensation compliance analysis

Massachusetts Severance Pay: What you need to know

ERISA supersedes almost all state laws that affect employee benefit plans. While Massachusetts law requires that severance pay be provided to employees who lose their jobs as a consequence of a corporate takeover, a federal district court in Massachusetts ruled that the state's severance pay requirement is preempted by the federal Employee Retirement Income Security Act (ERISA), the federal law that regulates employee benefit plans (Gray v. Quaker Fabric Corp., 809 F. Supp. 163 (1992)). This ruling has been affirmed by the United States Court of Appeals for the 1st Circuit (Simas v. Quaker Fabric Corp., 6 F3rd 849 (1993)). These decisions make the law unenforceableand are consistent with other U.S. Supreme Court rulings on ERISA preemption.
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Last reviewed on May 5, 2016.

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