How to Handle an Employee’s Death

April 26, 2016


As I am sure you have heard by this point, last week Prince, thought to be one of the greatest musicians of all times, died. As I discussed this tragedy with several people, a common theme seemed to emerge:

There seems to be a lot of famous people dying this year.

A Star Is Born, A Star Dies

Let’s look at some examples:

  • Prince
  • Merle Haggard
  • David Bowie
  • Antonin Scalia
  • Chyna
  • Alan Rickman

I could keep going, but the point is that death is abundant this year. (And we are only in April! At this rate, the “In Memory” reels on all the New Year’s specials will take up the whole show.)

(Think I am exaggerating, the BBC agrees, has some stats to argue the point, and offers some possible reasons this might be true.)

Death of a Salesman

All of this got me thinking.

When a celebrity dies, people come together as a collective to mourn him or her – even though they never actually met. But death does not only effect the stars, it comes eventually to us all. And a celebrity’s death does not alone cause a collective grief, most people’s passing causes pain and effects large groups of people.

This is especially true when the dead had a job.

When a worker dies, whether at work or away, their co-workers will mourn, their workload will become stagnant (if not properly managed), and they might still be owed some benefits. Just for starters.

I think to better illustrate my point, Justice Scalia is a good example. Think of all the issues that his passing caused the Supreme Court on top of the sadness it caused.

When a death comes to your workplace, you need to know how to handle it. On top of the emotional vulnerability felt by the rest of your employees, you have a lot of legal responsibilities that might need to be taken care of.

Make sure you know how to handle them the right way.

For starters, do the following:

  • Make sure you inform anyone that needs to be informed (think HR, clients that employee contacted regularly, etc.)
  • Create a plan to handle the employee’s workload until other, more permanent arrangements have been made in order to make sure nothing gets left undone. From a work standpoint, this is important because you want production to continue. However, from a legal standpoint, you may have considerations, such as a contract with a client that has an approaching deadline.
  • Consider offering some type of grief counseling to employees or provide information on your employee assistance program.
  • Consider attending the funeral, sending a company representative, sending a gift or card, and/or allowing employees to attend.

Outside of these concerns, there are a few specific considerations that we will talk about today in greater detail.

The Last Paycheck

One of the first things you might think of when considering the logistics after an employee dies is what you should do with their last paycheck.

Unless the employee died after the end of a pay period but before the next period begins, then there is a good chance they are going to be owed some money for the time they already worked.

This is an area that is largely controlled by state law. Before you ever get into a situation where you need to handle this, you should set up a plan and make sure your plan is in compliance with any law that applies to you.

Here are some considerations for you:

  • When does the payment have to be made?
  • To whom should you make the payment? (In the case of a death, the check will most likely need to be cut to the spouse of the deceased or to the estate beneficiary.)
  • How much will they be owed?
  • What about adding in accrued PTO or vacation time? This is another area that will depend on state law and/or what your employment agreement states, but if an employee earned any time off and never used it, then the chances are strong that it will need to be paid out.

Of course, these will all be answered on a case by case basis, but it is important to know what information you need to get in order to proceed and know how to get that information.

Uncashed Checks

Here is an interesting factor that could change everything for you:

Let’s say this particular employee didn’t have direct deposit and instead received paper checks. Now, let’s say they had gotten a check right before they died, but they never cashed it.

Now what?

Chances are, you will need to reissue the check – this time making it out to the beneficiary or personal representative (which is likely going to be defined by the state, so make sure you are sending it to the right person).

You might also consider having the representative sign something saying the check they received was for the employee’s last payment.

California’s Law

For an example of what a state might dictate in this type of situation, let’s look at California’s law on the subject.

California does not have an exact law defining terms for how to handle a final paycheck when an employee dies. However, they do have one for when an employee quits without notice.

However, the Society of Human Resource Management (better known as SHRM) states that in the absence of a specific law, the employer should follow the applicable law on paying employees who quit.

In California, the law states that an employee who quits without notice must be paid within 72 hours.

There are many other considerations to take when handling final payments (for example, I didn’t even get started talking about taxes…) However, that is a post for another time since there are a whole lot of other considerations you still need to be taking…

Benefits and Insurance

Outside of that final paycheck, there are a lot of things you need to take care of when an employee dies.

  • Life insurance payouts
  • Pension or other retirement plan, such as a 401(k)
  • Potentially (depending on how the employee died), workers’ compensation and/or accidental death and dismemberment insurance

It is important to be organized at all times. If an employee dies, chances are that the emotions will be running in overtime. Having files already together and easy to access will make the situation a lot easier for everyone involved, including you.

Once you have all your paperwork together, it is a good idea to sit down with the beneficiaries. This should be done after the funeral (since before the funeral they will be focused on other things) but as quickly as possible without being insensitive to the family’s grief.

This is a separate communication than the one you will do if you have to tell the family about the death (such as if it happened at work or a work event) or when you first communicate with them to offer your condolences (which you should do – and probably have a representative at the funeral as well if it is open).

It is not always possible or wise to do this, but when feasible, it might be a good way to make sure everything you need is taken care of.

Also make sure you end any health insurance benefits and appropriately pay out any money left in the employee’s HSA.

Follow the Normal Termination Routine

When everything else is said and done, you want to make sure all your termination procedures have been performed.

You want to make sure that the family or estate gets back all of the employees belongings. However, you also want to make arrangements to get back any of your property from the estate.

There are plenty of security and intellectual property considerations here – as well as just the general physical property considerations.

  • You want to make sure that the rest of your employees are safe by getting any security badges deactivated and returned.
  • You want to get back all of your intellectual property from files and laptops of the employee.
  • You want to make sure any physical property, such as a company car or a laptop, are returned.

Special Considerations for When an Employee Dies in the Workplace

It is always tragic when an employee dies, but when it happens at work or a work event, it can be extra tragic. When this is the situation, there are special considerations you may have to take into account.

Emergency Responses

When an employee dies at work, you should follow an emergency response plan in order to get medical professionals to the scene. Let them take care of the body. Also, you probably want to clear the area of any unnecessary employees.

Notifying the Right People

When the employee dies under your workplace, you might find yourself being the one having to notify the family. This is an awful position to be in, and should be handled correctly.

It is best to have a script to follow (but not read verbatim – you want to make sure you sound genuine since hopefully you are) so that you do not say something insensitive while winging it.

Hopefully you have a list of emergency contacts so that you know who to call and how to reach them.

Reporting Requirements

One of the most important things you need to be cognizant of if an employee dies at work is your reporting requirements.

With limited exceptions, you will have to report a death to the Occupational Safety and Health Administration (OSHA) or its state equivalent. You have to report even if you are exempt from normal record keeping under OSHA.

Under the federal law, you have certain requirements you need to do to be compliant with the law. Under a state plan, these requirements will be at least as tough, but could be more stringent.

Under Federal law:

  • You have eight hours to make your report from when the death occurred or when you learned or should have learned about it.
  • You must make the report by calling OSHA’s hotline or calling or going to your local OSHA office.
  • You must give all the necessary information in your report.

Some Final Thoughts

Whether it is a Hollywood star, a star employee, or anyone else, death is always sad. When one of your employees dies, you need to make sure you handle it the correct way.

Partnership Law Page


Ashley Shaw is an experienced Legal Writer with years of experience. After receiving her JD, she worked for years in a corporate environment writing on business and employment law topics

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