HR Management & Compliance

Are You Ready for When an Employee Dies?

A death in the workplace can feel like a death in the family. The following tips may help you navigate the needs of your company and your staff during the difficult time.

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Immediate Response

It’s generally best to contact the employee’s family as soon as possible to ask what information they feel comfortable sharing. You should notify employees about the death as soon as possible and let them know of any employee-assistance resources your company may offer.

If the employee had business relationships with individuals outside the organization, you’ll want to inform them in a simple and respectful manner. You should also address who will be handling phone calls and e-mails directed to the employee.

Company Property

Normal termination procedures should be followed for the employee, and company security procedures will dictate procedure. Arrangements should be made with the family’s point of contact for the return of all company equipment and the retrieval of the employee’s personal items.

Transition of Work

Visit with the deceased employee’s supervisors, close coworkers, vendors, and others about any major outstanding issues and tasks. To be respectful, avoid immediately advertising for a replacement. And when it’s time to hire a permanent replacement, be sensitive to your other employees’ need to remember their colleague.

Payroll

In almost all cases, a deceased employee had accrued some amount of salary, wages, or paid time off before his or her death. Many companies use direct deposit, and it may not be possible to stop an automatic deposit right away. If the deposit can be stopped, a paper paycheck should be issued in the employee’s name until the company is notified how the employee’s final affairs will be handled. As a general rule, you should not make the final paycheck payable to the surviving spouse or other beneficiaries.

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Before distributing any funds, it is very important to consult with an attorney to determine withholding requirements. If an estate will be opened, the paycheck should be made payable to the employee’s estate and released to the personal representative upon production of the court’s letters of appointment. In some cases, a formal estate may not be necessary. Depending on applicable state law, an individual may be able to claim the final paycheck by providing an affidavit to the employer.

Benefits

The company should process any benefit payments, including notifying any third-party administrators that may administer some of the benefit plans; locate beneficiary designation forms; and contact the beneficiaries to let them know how they can make a claim.

You should also direct your carrier to terminate the employee’s health insurance coverage as of the date of death. It’s important to remember that death counts as a Consolidated Omnibus Budget Reconciliation Act (COBRA)-qualifying event for a covered employee’s spouse and dependent children. If your organization must comply with COBRA, you should notify your health plan administrator of the employee’s death.

Breanna L. Young is an Estate Planning Attorney with Davis Brown Law Firm and contributes to the Iowa Employment Law Letter. She can be reached at or breannayoung@davisbrownlaw.com.

Jana L. Weiler is an Attorney with Davis Brown Law Firm and contributes to the Iowa Employment Law Letter. She may be reached at janaweiler@davisbrownlaw.com.