Question: What steps can our public agency take to prepare a procedure for handling the final paycheck and accrued leave cash-out for a deceased employee?
Answer: In the unfortunate event that an employee passes away, public agencies should already have a plan in place for issuing the final paycheck and any accrued leave cash out. The best way to prepare is to have new hires and active employees fill out a written designation to direct the agency to issue the final paycheck and accrued leave cash out to a designated beneficiary. Government Code section 53245 allows public agency employees to designate a person, corporation, trust, or estate that shall be entitled to all checks that would have been payable to the employee had they survived. The employee is allowed to change the designation at any time. Such a designation should be retained in the employee’s personnel file. Without such designation, the final paycheck and leave cash out become an asset of the deceased employee’s estate. In that situation, an agency generally must wait until a court-appointed representative of the estate contacts the agency or until a surviving spouse or registered domestic partner files a valid affidavit to claim the asset.