Handling the Death of an Employee

While nobody wants to think about tragic situations such as the death of an employee, it’s best to have a list of items to take care of should one of your employees pass away. Having a plan of action in place will help you stay organized and ensure all necessary items are addressed properly.

Prior to the death of an employee, and on an at least annual basis, it is recommended that you have employees review and update personnel forms.  These forms include emergency contacts, their life insurance and 401k forms, and health medical savings accounts.  There are many life events that can occur throughout your employees’ time with your company that can affect how their end of life benefits are administered (when applicable) such as separation, divorce, or death within their family resulting in a change of beneficiary information.

Upon notification of the death of an employee, you should first notify any employees and/or executives within your organization with the most critical need to know first. This includes HR and the employee’s direct supervisor.  After the first notifications are made, you should then make an announcement to the remaining employees in your company letting them know that more details will be provided when they become available (such as funeral details).  Be understanding and compassionate toward employees who may experience grief or shock upon hearing about their colleague’s death.

It’s a good idea to appoint one person within your company to be the point of contact for both coworkers as well as the family of the deceased employee. This person can act as a liaison sharing information provided by the family, such as funeral arrangements, wishes the family may have, etc. This will also prevent the family from being contacted by several people from your organization.  This person must be familiar with HIPAA and can only share information with employees that the family has authorized to be released or has been made public through an obituary for the deceased employee.

If possible, you should provide time off to your employees to grieve as well as to be able to attend the funeral services of their colleague. If it’s not feasible, perhaps coordinate a memorial in the office to give the employees a time to remember the deceased and find some closure.

There are also a number of business items that will need to be taken care of following the death of an employee. Any final wages owed to the employee should be paid by your payroll department in the same manner as any other employees leaving employment with the company. You should confirm state laws regarding final pay and associated tax issues or perhaps consult with a tax adviser. Based on state law and/or company policy, you may also need to provide compensation for accrued vacation, sick, or other paid time off that had been accrued but not paid out.

If the employee was enrolled in benefits with your company you should terminate coverage and offer COBRA when required by law to any surviving dependents of the employee. You should provide beneficiaries of the employee with information regarding life insurance and 401k. You will also need to obtain copies of the death certificate to provide to benefit carriers.

You may also need to notify customers or clients that worked directly with the employee. If the employee had a close working relationship with customers, you should provide this notification prior to the funeral service to allow the customers to also attend the funeral service should they choose to. 

Provide customers with updated contact information within your company so that they know who to work with in the future. Arrange to have the employee’s phone calls, voicemails, and emails forwarded to someone else within the company to ensure customer needs are taken care of.

Family members of the deceased employees should be provided with any personal belongings that the employee had in the office.  This should be coordinated with a member of the family but may be best done by sending a package to the family with the belongings or by having a close colleague deliver the belongings to the family member directly.

You should also follow your normal employee termination procedures to make sure any additional items are taken care of.

Remember that your employees may need to grieve for some time after the death of their friend and coworker.  Be understanding of this and perhaps refer the employees to your Employee Assistance Program if you have one in place.