When an employee experiences a major life event—such as a marriage, the birth or adoption of a child, a divorce or a death — there are steps you should or must take related to their pay, benefits and records.
How you respond matters. A thoughtful, consistent approach can help you support your employee and/or their family while also complying with applicable laws and keeping employment records up to date.
For all life events
Make it easy for employees to report life changes. Provide clear, written guidance that explains:
- How to report a life event
- What documentation is required (if any)
- Any deadlines for reporting
For example, under federal law:
- Employees must be given at least 60 days to report their divorce to the group health plan administrator. The federal law (COBRA) applies to employers with 20 or more employees, but many states have similar laws that cover smaller employers (commonly known as Mini-COBRA laws).
- Employees generally have 30 days to notify the group health plan administrator if they wish to add a new spouse or dependent because of marriage, birth, adoption, or placement for adoption.
- Newly married couples must give their employers a new Form W-4 (Employee's Withholding Certificate) within 10 days, according to the IRS.
Treat all personal information as confidential. Only share details with those who need it to update payroll, benefits or employment records.
Once you’re notified of a life event, review whether updates are needed for:
- Payroll and tax withholding
- Benefits enrollment
- Emergency contacts
- Employee records
Marriage
Ask the employee to:
- Update their name or address, if applicable.
- Submit a new Form W‑4
- Update direct deposit information if needed.
- Review health coverage and beneficiaries for retirement and life insurance plans.
- Confirm emergency contact information.
Birth or adoption of a child
If an employee is planning to welcome a new child:
- Offer congratulations and support.
- Inform them about potential benefits, such as paid leave, dependent care accounts or other applicable programs.
- Share available resources, including EAP support or flexible work arrangements.
Once the child is here, ask the employee to:
- Submit a new Form W‑4 if they want to adjust tax withholding.
- Review and update health coverage.
- Review and update beneficiaries.
Keep in mind that some leave and benefits laws require employers to notify employees of their rights.
Divorce
If an employee reports a divorce:
- Acknowledge the situation with empathy and respect their privacy.
- Remind them of available support resources.
Ask the employee to:
- Update their name, address and other personal details, if applicable.
- Submit a new Form W‑4.
- Update direct deposit information if needed.
- Review health coverage and beneficiaries.
- Confirm emergency contact information.
You may also need to address any court orders, such as garnishments or qualified domestic relations orders (QDROs), as applicable.
Death of an employee
If an employee passes away:
- Notify appropriate internal stakeholders while limiting details to protect privacy.
- Communicate with employees in a respectful and sensitive manner.
- Offer support resources, such as an EAP.
- Contact the employee’s family to convey your condolences, provide a single point of contact with your organization whom they can rely on for support or to answer questions, and respectfully discuss next steps for final pay and benefits.
- If you are subject to federal or state COBRA health continuation requirements, report the employee’s death to the group health plan administrator within the specified timeframe.
You should also:
- Disable system and building access.
- Update employment records.
- Notify other benefit plan administrators.
- Process final pay in accordance with applicable laws.
State laws vary on how final wages must be handled after an employee’s death. Requirements may depend on factors such as the existence of a surviving spouse, dependents or an estate. For example:
|
State |
How to handle wages after an employee’s death |
|
California |
The California Probate Code sections 13600-13606 establish a process for paying out up to a certain amount of a deceased employee’s wages to a surviving spouse. The process involves an affidavit or declaration containing certain elements, verification of the surviving spouse’s identity, and payment of wages. |
|
Oregon |
The state requires that all wages earned by an employee, up to $10,000, be paid to the employee’s surviving spouse, or if there is no surviving spouse, the dependent children (divided equally among the children), to the same extent as if the wages had been earned by such surviving spouse or dependent children. Any wages in excess of $10,000 would be paid to the estate. |
You may also need to:
- Follow federal and state tax reporting requirements.
- Retain employment records for the required period.
Consider consulting legal counsel to help navigate this situation.
Conclusion
Employee life events require a careful balance of empathy, privacy and compliance. By establishing clear processes and responding thoughtfully, you can support your employees while ensuring payroll, benefits and records remain accurate.
