Payroll 210 Badge #02 - Death of an Employee-Payroll 210 Badge #2

Payroll 210 Badge #2 - PowerPoint

Pdf Summary

This WASBO Badge #2 module outlines district procedures when an employee dies, focusing on communication, preparation, final pay, leave cash-outs, benefits, and required notifications. Internally, HR/Communications should ensure key departments are notified before any districtwide message. Externally, the district should promptly coordinate with the spouse or designated family member, setting a meeting at their convenience and providing written materials (sample letter and final pay estimate) to reduce confusion during a difficult time.<br /><br />Before meeting the family, staff should confirm the last day worked and date of death, verify all leave is posted, determine benefits end dates, and enter the termination in SEBB MyAccount. The district should prepare SEBB Worksheet C-5 (Surviving Dependent Notification), gather continuation-of-coverage information, and prepare documents requiring signatures. A “Claim and Proof of Death” form should be notarized before releasing the final paycheck, and payroll records must be retained for year-end processing.<br /><br />Payroll processing may require system changes such as updating the employee record to “Estate of…,” removing direct deposit (final pay by paper check), setting federal income tax withholding to exempt, stopping leave accruals, revising contract pay to actual dates worked/paid, and entering employment/retirement end dates. Leave cash-outs must follow WAC/CBA terms: sick leave may be payable upon death up to 180 days at a 4:1 ratio (not to VEBA), while vacation/personal leave depend on CBA language.<br /><br />The module summarizes IRS rules: if wages are paid in the same year as death, FIT is not withheld on final wages, but FICA/Medicare are withheld and reported; final pay is excluded from W-2 Box 1 but included in Boxes 3/5. If paid after the year of death, FIT/FICA/Medicare are not withheld and wages are not reported on the W-2. In both cases, a 1099-MISC is issued to the estate/beneficiary for the gross final payment (Box 3).<br /><br />Finally, districts must discuss other benefits (MetLife life insurance, LTD, FSA/HSA, 403(b), voluntary deductions), contact DRS to report the death, and use a checklist to document notifications, forms (W-9), death certificate handling, and receipt of payments.

Keywords

employee death procedures

district communication protocol

final paycheck processing

leave cash-out rules

SEBB MyAccount termination

SEBB Worksheet C-5 surviving dependent notification

Claim and Proof of Death notarization

IRS final wages withholding rules

W-2 and 1099-MISC reporting for deceased employee

benefits continuation and DRS death reporting