Compliance Just Got Easier: Stay ahead of regulatory changes with instant notifications on updates that matter.

LEARN MORE

FREE TRIAL UPGRADE!
Thank you for investing in EnvironmentalHazmatHuman ResourcesHuman Resources, Hazmat & Environmental related content. Click 'UPGRADE' to continue.
CANCEL
YOU'RE ALL SET!
Enjoy your limited-time access to the Compliance Network!
A confirmation welcome email has been sent to your email address from ComplianceNetwork@t.jjkellercompliancenetwork.com. Please check your spam/junk folder if you can't find it in your inbox.
YOU'RE ALL SET!
Thank you for your interest in EnvironmentalHazmatHuman ResourcesHuman Resources, Hazmat & Environmental related content.
WHOOPS!
You've reached your limit of free access, if you'd like more info, please contact us at 800-327-6868.
CLOSE
 
 

Deceased employees' final paychecks

RegSenseTerminationFinal PaychecksAgency PublicationCompliance DocsFocus AreaTalent Management & RecruitingHuman Resources

The death of an employee is not easy. Yet while providing the employee’s coworkers support related to their grief or shock is certainly important, so too are the administrative matters of the situation. How will you handle the employee’s final paycheck?

Check state law

Some states have specific statutes relating to deceased employees’ wages, and these laws can be complicated.

Louisiana law1, for example, states that employers may pay any wages or benefits due to a deceased employee to his/her surviving spouse, provided neither spouse has instituted a divorce proceeding. If there is no surviving spouse or if either spouse has instituted a divorce proceeding, the employer may pay the last wages and other benefits to any major (older than 18) child of the deceased employee.

If the employee has neither an eligible spouse nor an adult child, employers may make the check payable to the deceased employee’s estate. Before making the payment, though, employers must require the recipient to fill out a release document providing certain information in the presence of two witnesses. Within 10 calendar days of making the payment, employers must send an affidavit containing certain information to the Louisiana Department of Revenue.

IRS guidelines

If an employer pays an employee’s final wages in the same year the employee died, it must withhold social security and Medicare taxes. The final wages should be reported on the employee's Form W-2 only as social security and Medicare wages. The payment should not be shown in box 1, as wages due after an employee’s death are not subject to federal income tax.

If an employer pays final wages after the year of the employee’s death, the employer should not report the payment on Form W-2, and should not withhold social security and Medicare taxes.

1Louisiana Revised Statutes Sec. 9:1515

['Termination']
['Final Paychecks']
UPGRADE TO CONTINUE READING