Handling the Death of an Employee in Your Small Business - SmallBizDaily

Last updated: 11-21-2020

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Handling the Death of an Employee in Your Small Business - SmallBizDaily

Whether an employee dies suddenly – perhaps as the result of an accident or COVID-19 – or if the death was anticipated, their passing will impact the workplace. Coworkers will mourn their colleague, and workflow will almost certainly be affected. It will take time for everyone to adjust to the absence. 

It’s natural for everyone to feel some level of distress when learning of a colleague’s passing, but people who worked closely with that individual are likely to need more time and space than the remainder of your staff. Inform these people individually if you can, preferably in a private setting. After close associates have been informed of your employee’s death, it’s normally acceptable to make a general announcement. 

Find time to memorialize the employee in some way. Not only will this help your employees navigate the grieving process, it can help mitigate the consequences of difficult emotions while showing care and respect. 

Consider hosting an after-hours memorial if you can’t take time out of the workday, relying on the departed person’s closest colleagues. There are many ideas formemorializing a colleaguewhile honoring their memory in a way that feels respectful and appropriate.

If you haven’t been in close contact with the employee’s family yet, make time to do so, offering sincere condolences and letting them know that you’re available to speak when they are. You might need to help them with matters including wages still owed and other financial details. If you need to issue a final paycheck, ask the employee’s beneficiary to fill out IRS Form W-9, and then issue the wages, along with compensation for any accrued time off.

In addition to offering your condolences and helping with practical matters, ask if members of your staff are welcome at the memorial or funeral. While some families prefer to make private arrangements,others will appreciatea show of support, and your employees may find some closure by attending the funeral. 

If employees are able to attend the funeral, give them the day off, and consider making arrangements for ridesharing, cabs, and other transportation as appropriate. 

Just as you would when an employee leaves your business for another reason, you’ll need to update your website, email, and other communication systems, forwarding the employee’s contacts to yourself or another individual who can cover their responsibilities. 

In addition, disable their security badge and any passwords they used to enter your business location and access other assets. Remember to remove the decedent from your company’s payroll software once their final paycheck has been issued to their beneficiary. 

Hold onto all paperwork for the legally required period. Tax records should be retained for four years, and payroll records should be retained for three years.

Wrongful deaths aren’t intentional, however a wrongful death claim may be filed, usually by close family members, and only in cases where misconduct or negligence on the part of another party are involved.Skaug Lawmentions the importance of hiring knowledgeable legal counsel in the event that a wrongful death suit is filed, particularly when accountability may not lie with your company. They go on to say that family members generally have two years from the date of death in which to file a lawsuit.

If your company is clearly accountable for the employee’s death, an experienced lawyer can help you navigate proceedings and ensure that the family receives compensation that is due. Expenses surrounding wrongful death lawsuits can involve:

If the deceased employee’s family files a wrongful death lawsuit, try not to take it personally. General liability insurance, workers compensation, and premises liability insurance may be able to help. For example, if workers’ compensation is involved, the exclusive remedy statute may apply, and your lawyer may be able to help you bring the matter to a quick conclusion. 

It takes time – sometimes weeks or even months – torecover from an employee’s death, as each individual plays an important role in a small business like yours. If possible, wait until after memorial services to begin the search for a replacement. Doing all you can toreassure and comfort employeeswhile looking after your business’s essential functions will help you all move through this difficult time with as much grace as is possible. 


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