Employee Status Changes: Two Major Milestones
Life events can impact an employee’s benefits and pay and may require updates to W-4s and other employment records. Below are considerations following two major employee milestones.
My employee recently got married. What do I need to consider?
If an employee gets married, you may need to make updates to the following records:
- Form updates. If the newly married employee chooses to update their tax filing status or bank account information, they may need to update their witholdings and direct deposit authorizations. They should also update any address changes or emergency contact information. Further, while not required, it is recommended that you note any name changes in Section 3 of the employee’s Form I-9. Consider asking the employee to provide documentation of a legal name change to keep with their I-9, but be consistent with how you typically handle I-9 documentation.
- Payroll changes. If the employee changes their last name, update payroll and other system information, such as their email address or security/identification badge. To avoid negatively impacting the employee’s earnings history, do this after you verify the employee has processed their name change with the Social Security Administration.
- Benefit plan changes. Generally, marriage is considered a qualifying event that may allow the employee to make changes to medical insurance, life insurance, retirement plans, and other benefits. Work with your insurance carrier and refer to your summary plan description for specific procedures and deadlines. Newly married employees may also want to update their beneficiaries. Note: All states recognize same-sex marriage and some states also recognize domestic partnerships. These arrangements must be afforded the same benefit considerations as traditional marriages. Check your state and local laws for more information.
An employee has passed away. What are my next steps?
An employee’s death can be traumatic for you and your staff. In addition to helping your employees manage their grief, consider how you will handle the employee’s final pay and benefits.
- Designate a contact person. Designate a company representative to remain in contact with the family. When the time is appropriate, collect the employee’s belongings from their work area and return them to the family. Also determine whether you will need to collect any company property, such as a laptop or keys, from the deceased employee.
- Manage grief. Refer employees to your company’s Employee Assistance Program (EAP), if applicable. An EAP can help your employees with the grieving process by providing support from trained professionals. If you don’t have an EAP, similar services may be offered under your company’s medical plan. If the family approves, provide details on funeral arrangements and understand that some of your employees may need time off for bereavement purposes.
- Transfer work responsibilities. If the employee was working directly with a client or on an important project, assign someone else to take over. Consider changing the employee’s incoming voicemail message and forward all emails and voicemails to the new contact.
- Final wages. Meet applicable final pay deadlines, including any requirement to pay accrued unused paid time off at the end of employment. Generally, the deceased employee’s final pay should be released to an authorized beneficiary or the estate of the employee. Understand any associated tax implications before issuing final payment and consider consulting with your tax advisor.
- Benefits. Identify beneficiaries listed on life insurance, health savings accounts, and retirement plans. Contact insurance carriers to inform them of the employee’s passing and determine next steps. Terminate any insurance, such as medical or dental, per policy requirements, assess whether continuation of coverage is available, and distribute any required paperwork to the family in the allotted timeframe.
Note: Should an employee pass away while on the job, immediately report the incident to 911, call the employee’s emergency contact, and report the incident to the Occupational Safety and Health Administration (a fatality on the job must be reported within eight hours).
Major life changes can have implications in the workplace. Periodically remind employees to keep their personal information up to date so that you can maintain accurate records.