Does Massachusetts have a state WARN Act for restaurant closures?

Massachusetts does not have its own state WARN Act. Massachusetts restaurant owners are only subject to the federal WARN Act, which requires 60 days advance notice for employers with 100 or more full-time employees conducting a mass layoff or plant closing. However, Massachusetts has strong wage payment laws and final paycheck requirements that apply regardless of WARN Act obligations.

How do I surrender a Massachusetts liquor license when closing my restaurant?

Massachusetts liquor licenses are issued by the Alcoholic Beverages Control Commission (ABCC) and local licensing authorities. To surrender a license, notify both the ABCC and your local licensing board, return the original license certificate, and pay any outstanding fees. Massachusetts liquor licenses are valuable assets and can often be sold or transferred to a buyer, which requires ABCC and local board approval.

What are Massachusetts final paycheck requirements when closing a restaurant?

Massachusetts has one of the strictest final paycheck laws in the country. For terminated employees, final wages must be paid on the day of termination. For employees who resign, final wages are due on the next regular payday. Massachusetts also requires payment of all accrued vacation upon termination. Failure to comply can result in triple damages plus attorney fees under the Massachusetts Wage Act.

How to Close a Restaurant in Massachusetts

Massachusetts is one of the most regulated states in the country for restaurant operations, and closing a restaurant here is no exception. The state has its own WARN Act, strict final paycheck requirements, a complex ABCC license system with significant secondary market value, and a Department of Revenue that requires specific clearance before entity dissolution. Here is the complete guide.

Massachusetts ABCC License

Restaurant liquor licenses in Massachusetts are issued by local licensing authorities (city or town) and overseen by the Alcoholic Beverages Control Commission (ABCC). Massachusetts caps the number of licenses by municipality, similar to New Jersey, which gives licenses in Boston, Cambridge, and other desirable markets significant secondary market value. A full liquor license in Boston can sell for $300,000 to over $500,000.

Do not surrender a Massachusetts liquor license without first consulting a licensed broker. The transfer process requires ABCC approval and typically takes 60 to 120 days. If you are closing and not immediately selling the license, you can apply to place it in escrow while you find a buyer. Contact the local licensing authority first, as they have jurisdiction over the initial approval.

Massachusetts Final Paycheck Law

Massachusetts has one of the strictest final paycheck laws in the country. Under Massachusetts General Laws Chapter 149, Section 148, if you discharge an employee, you must pay all wages owed on the day of discharge. This includes all earned wages, commissions, and -- critically -- all accrued vacation time. Massachusetts treats accrued vacation as earned wages, meaning you cannot avoid vacation payout by policy language. If an employee has 40 hours of accrued vacation, you owe them that payment on their last day.

This is a significant cost that many Massachusetts restaurant owners do not plan for. Calculate your total accrued vacation liability before you set a closing date.

Massachusetts WARN Act

Massachusetts has its own WARN Act, the Massachusetts Plant Closing Law (MGL Chapter 151A, Section 71A). It applies to employers with 50 or more employees who lay off 50 or more employees within a 30-day period. The required notice period is 90 days -- longer than the federal 60-day requirement. Massachusetts also requires that the notice be filed with the Executive Office of Labor and Workforce Development. Multi-location operators in Massachusetts need to count all employees across all Massachusetts locations.

Massachusetts Sales Tax

File a final sales tax return with the Massachusetts Department of Revenue. Massachusetts's sales tax rate is 6.25% statewide. Cancel your sales tax registration through MassTaxConnect. The Department of Revenue will conduct a final review of your account and issue a tax clearance certificate.

Massachusetts Secretary of State Dissolution

To dissolve a Massachusetts LLC, file a Certificate of Cancellation with the Massachusetts Secretary of the Commonwealth. For a Massachusetts corporation, file Articles of Dissolution. Massachusetts requires a tax clearance certificate from the Department of Revenue before dissolution is approved. The filing fee is $100 for LLCs -- the highest in the five-state group covered here.

The Correct Sequence

Initiate the ABCC license transfer or escrow process first -- it takes the longest. Calculate and budget for accrued vacation liability. Notify employees per the Massachusetts WARN Act timeline if applicable. Pay all wages including accrued vacation on the last day of operation. File final sales tax return and cancel your MassTaxConnect account. Obtain tax clearance from the Department of Revenue. File dissolution with the Secretary of the Commonwealth. For the full cost picture, see What Does It Actually Cost to Close a Restaurant.