There’s no doubt that the death of an employee is a traumatic and difficult experience for a business and everyone who works there. Even while the deceased’s colleagues are experiencing their grief, they also must concern themselves with making the proper arrangements. Not only must they find a replacement to fill the employee’s position, but they must also take care of the necessary HR procedures—all while struggling to process their loss.
Should your company experience the tragic loss of an employee, here are a few tips to help the resulting human resources proceedings go smoothly. That way, your medical practice can focus on supporting each other through a difficult time instead of worrying about the HR logistics.
Look up state laws
Regulations for handling the wages of a deceased employee are chiefly governed by state law, and therefore can vary widely across the country. That’s why it’s wise to begin by consulting the laws on this subject in your state.
For example, state law will tell you exactly what is owed to the deceased employee, and who should receive it. It’s not just wages that need to be considered, but also things like vacation pay or any bonuses earned.
The recipient is often the deceased’s surviving spouse, but there may be specific laws about how to identify other beneficiaries if not. If no one claims the wages, look again to state law to find out where they should be paid instead.
Discern the method of payment
It’s important to note that there may be a specific method of payment required in this circumstance, which may be different from the method in which the employee received wages while living. State law will dictate the rules on this matter.
For example, if the employee had been receiving wages via direct deposit, their last wages may also be paid out this way—or not. State law might instead require that it be paid by mail before a certain date, or even by in-person delivery to the beneficiary.
It’s also important to note that if the employee had been issued any checks that were not cashed before their death, those checks must be re-issued to the beneficiary so that money may be claimed.
Take care of the taxes
Taxation is the final aspect of a deceased employee’s wages that your practice must take care of. If you’re making the tax payments during the same fiscal year that the employee passed away, you must withhold FUTA tax, Social Security, and Medicare taxes. However, it’s not required that you withhold any federal income tax.
If you’re making the tax payments in the fiscal year following the employee’s death, none of the aforementioned tax payments must be made. Again, check state laws on this matter as well, since there could be additional requirements.