HR Compliance

Staying Compliant After the Death of an Employee

By

Callie Johnson

| Feb 20, 2018

When an employee passes away, you need time to process your emotions. But as an HR professional, there are also timely actions you should take to help your workforce grieve, and a few things you’ll need to address to remain compliant. While the death of an employee is never easy, it’s important to ensure any compliance matters are handled consistently with your current policies but with added grace.

Initial Steps

Although your employee wasn’t actually terminated, it’s still a best practice to follow your existing termination checklist. The checklist will help you determine what security access the deceased had so you can disable or redirect it. It will also help with remembering what keys and technology (like a laptop or cellphone) the employee may have had. Be respectful of the employee’s family and ask for these items in as sensitive a manner as you can. You may work with your internal IT department to secure devices remotely, which can protect your sensitive data while you work to connect with the right family member.

In some instances, you’ll also need to obtain a death certificate from the family. This may seem like a uncomfortable request, but you’ll need the certificate before you can proceed with many of the following steps you need to take for the employee.

Paycheck

Check your state laws to make sure you’re following the correct procedure about paying final wages. For example, some states require you to pay out unused vacation. If your state doesn’t have a law, follow your company policy.

You’ll also need to find out who the deceased’s beneficiary is so you will know who should receive his or her final wages. This should be documented either in your HRIS system or on a form in the employee’s personnel or benefit file.  If a paycheck has already been issued, but not cashed, you should reissue the check to the deceased’s beneficiary or estate.

COBRA and Life Insurance

If the employee is covered on the benefit plans, their death is a COBRA-qualifying event. If you sponsor group health plans, you must offer a continuation of group health insurance for up to 36 months to the deceased’s surviving spouse and dependents. The family must be notified about coverage within 30 days of the deceased’s death.

Prepare any relevant information for life insurance claims, if the employee had a policy in effect. They will be dealing with so many decisions that pulling this information together for them before they request it can help give those grieving one less thing to worry about. Employers may also choose to include EAP information or other company sponsored grief resources for eligible family members.

Employee Retirement Income Security Act (ERISA)

The Employee Retirement Income Security Act of 1974 requires that retirement, pension and other plans provide survivor benefits to the surviving spouse of an employee who worked after reaching the earliest possible retirement date under the plan but passed away before retiring. Since this law only pertains to employees who were able to retire but hadn’t yet, you’ll need to refer to your company’s policies to ensure compliance if the deceased was of retirement age. Benefit administrators should contact their plan providers to confirm if there is any additional action required on the deceased employee’s behalf.

To learn more about how your business can start to build procedures for an employee’s death so you can navigate the difficult time as smoothly as possible, visit our blog, “4 Questions to Consider When Handling the Death of an Employee.”

 

About the Author

Callie Johnson

As a writer for Paycom, Callie Johnson creates content for the company’s various marketing and communications initiatives. Having earned her bachelor’s degrees in journalism from the University of Oklahoma and web design/development from Full Sail University, she has written for companies of all sizes. Outside of the office, she enjoys hand-lettering, going to the movies and spending time with her family and dogs.

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