Final Paycheck Distribution - When an employee has died, the final paycheck will be distributed to the surviving family members. The employer needs to explain the final payment in terms of hours worked, vacation and sick-time. If the check was automatically deposited, family members may be so distraught that they forget that the deposit will not be continued, resulting in possible checkbook failure. Financial concerns are not usually a high priority for the newly bereaved. Whether the deceased was an employee or a member of the family being insured by the employer, new forms will need to be processed.
Employers can assist by explaining different coverage options for the survivors.
If the deceased was insured under the employee's coverage, they need to be removed from the policy and the co-payment for their insurance changed. These tasks should be explained to the family gently and compassionately. It might be a good idea to offer the options in writing and suggest that the family keep the paperwork in a convenient place for future reference. 401K Savings Plan - When companies offer a 401K savings plan, appropriate changes will be needed for the bereaved. Depending on the plan and the government rulings, the funds can remain where they are, be rolled over to a new account or be distributed to the beneficiary.