Death of an Employee – What do You Need to do?

The death of an employee is a stressful event, and there are many responsibilities a business owner has in the event of a death, whether it is due to a workplace event or outside work.

You’ll need proof of the authorised person you need to deal with for management of the deceased estate before paying any wages owed. You’ll need paperwork such as a grant of probate or a letter of administration to prove authorisation before making any payment.

As an employer, you’ll have to take care of many practical, compassionate and administrative tasks.

• Notify staff and make time for conversations about the death, particularly if it occurred at work.
• For a workplace incident, notify your work health and safety authority, police and next of kin if appropriate.
• Establish the identity of the authorised person you can communicate with about company property and monies owed to the employee. The next of kin is not necessarily the authorised contact; this would be the executor or estate administrator. Don’t pay employee wages to the next of kin before checking their authorisation in regard to the deceased estate.
• Work out if the employee had possession of any company property such as office keys, vehicles, equipment, tools, phone or computer. Retrieve all property from the next of kin before making any final payments.
• If you have an Employee Assistance Program (EAP) in place, get their help. If not, consider engaging an organisation to provide an EAP to help staff with the bereavement process and other human resources concerns. Alternatively, provide staff with resources for mental health support.
• Calculate the final pay. The final payment should include wages earned up to the last day worked, superannuation guarantee, annual and long service leave entitlements, outstanding rostered days off and any other applicable award provisions.
• Payments to deceased employees are categorised as death benefit employment termination payments (ETPs). The treatment differs according to whether the funds are paid to dependants, non-dependents or the estate’s trustee.

The rules around making and taxing the final payment due to the employee are complex. Talk to us before making the final payment, and we’ll make sure it is treated correctly and is paid to the correct recipient bank account.

Let us help you deal with this challenging situation.