Without a will, here’s how to handle a deceased employee’s final paycheck

Q           We have an employee who recently passed away. He wasn’t married, didn’t have a will, and didn’t have company life insurance or death benefits. How do we handle his final paycheck? Do we continue with our regular payroll procedures, should we wait for the beneficiary for his estate to be identified, or something else?

State law typically dictates how to process a deceased employee’s final paycheck. You should generally wait to pay wages owed, however, until a court appoints a beneficiary or personal representative for the employee’s estate. This helps avoid claims for improper distribution of assets.

State laws usually include provisions for payment of a deceased employee’s wages regarding (1) the maximum amount payable, (2) to whom wages are payable, and (3) the conditions of payment. In West Virginia, for example, in the event of an employee’s death, up to $800 should be paid directly to the decedent’s next-of-kin outside of probate proceedings. Any wages still owed beyond the $800 payment made to the decedent’s next-of-kin should then be paid to the decedent’s estate.

In addition to the deceased employee’s wages, any vacation or other accrued paid time off they accumulated may need to be paid out. Payment for such benefits should be paid according to state law. When state law is silent regarding how such time should be paid, your policies from your company handbook or manual regarding payment of this time governs the manner of such payment.