What to Do When an Employee Dies: The Complete HR Guide

When an employee dies, HR has two jobs at once: take care of a family and a team, and get the money, the benefits and the paperwork right. Several of those steps have federal deadlines, and some run from the day of the death.

Here’s the order to work in. MORTL’s first 48 hours checklist is the one-page version to print.

• Confirm the death through the family’s chosen contact or the employee’s emergency contact before anyone acts on it.
• Name one HR contact for the family, and give them that one name and number.
• Tell the immediate team first, in person or on a call, before a company-wide message. Keep it to the facts the family has agreed to share. Never share the cause of death without the family’s permission.
• Secure access and records. Work with IT and legal to lock the employee’s accounts and keep the business records you’re required to keep. Don’t delete the account automatically.
• Update what runs on its own: recurring meetings, email auto-replies, client routing and payroll.

Employers covered by OSHA have to report a work-related death within 8 hours of the death, or of learning about it, to the nearest OSHA area office, by calling 1-800-321-6742, or online.^[2] The rule, 29 CFR 1904.39, doesn’t require a report for a crash on a public road outside a construction zone, a death on a plane, train, subway or bus, or a death more than 30 days after the incident.

Those deaths still go in your injury records if you keep them.^[2] Preserve the scene and the records, and bring in counsel and your workers’ compensation carrier the same day.

Before you cut the final check, ask your payroll provider or counsel two questions: who your state lets you pay a deceased employee’s wages to, such as a surviving spouse or the estate, and by when. The check covers the wages owed at death plus any accrued vacation pay your state or policy requires, and any other compensation, and the IRS treats all of it the same way on the tax forms below.^[1]

The IRS rule for wages paid after a death depends on the year you pay them:^[1]

• Paid in the same year as the death: withhold Social Security and Medicare tax, and report the payment on the employee’s W-2 only as Social Security wages in box 3 and Medicare wages in box 5, with the taxes withheld in boxes 4 and 6. Don’t include it in box 1.
• Paid in a later year: don’t report it on a W-2 and don’t withhold Social Security or Medicare tax.
• Either way: report the payment in box 3 of Form 1099-MISC, in the name and taxpayer identification number of the estate or beneficiary who received it. A reissued paycheck that was already available to the employee while alive is the exception and doesn’t go on a 1099-MISC.

Wages earned and paid before the death go on the W-2 as usual.^[1]

Notify the group life insurer, the retirement plan administrator and any other benefit providers, and send the family the claim forms with the name of a person they can call. Each plan pays its named beneficiaries under its own terms, so check the beneficiary on file before you tell the family who is owed what.

The death of a covered employee is a COBRA qualifying event.^[5] If your group health plan is covered by COBRA, a surviving spouse or dependent child who was on the plan the day before the death can elect to continue coverage for up to 36 months from the death.^[4][7] The deadlines are short:

• The employer has 30 days from the death to notify the plan administrator, or longer if a multiemployer plan’s terms allow.^[6]
• The administrator then has 14 days to notify the family of their rights, with the same multiemployer exception.^[6]

Federal COBRA doesn’t apply to a group health plan in a year when every employer maintaining it normally had fewer than 20 employees during the year before.^[3] Check whether your state has its own continuation law for smaller employers. Tell the family in writing what happens to their coverage, on which date, and what their options cost.

• Explain leave clearly. Apply your bereavement policy consistently and check state and local requirements. Bereavement leave laws by state lists the states that require it.
• Redistribute the work on purpose, with named owners and realistic deadlines, so it doesn’t fall on one person.
• Check in one by one. Managers offer individual time without assuming who was closest.
• Share support, including your employee assistance program if you have one.

MORTL’s manager card has the words for talking one on one with anyone on the team who’s grieving, and the return-to-work plan builder lays out a 30, 60 and 90-day plan for an employee coming back after a death.

MORTL for Employers gives HR a first 48 hours checklist, a bereavement policy template, and manager scripts, and gives every employee MORTL Premium all year. For the employee’s family, MORTL’s free guide for when someone dies covers the first days. See what’s included.