July 03, 2009 (Original publish date) • By Dennis Beaver
When Rick Adams of Lemoore was driving home close to 10 in the evening on May 14 he had no way of knowing that within a matter of weeks he would be directly responsible for an answer to an important legal issue that affects employers and the families of their employees. (Names have been changed.)
Oil field work is demanding and Rick was tired that evening. He might simply have fallen asleep at the wheel; no one knows for sure. His car drifted off the road and onto a farmer’s field, rolling over many times. If ever there was a time to wear a seatbelt, this was it. But Rick did not.
He left family, friends who loved him, and something of critical importance to his mom and son: a final paycheck.
Rick’s mother, Cindy and his son, Ken, assumed they could go to Rick’s employer, Adam, and simply pick up the check. And that’s what they tried to do the day after Rick died, needing money for the funeral. But Adam didn’t know his legal responsibilities and refused.
“I wasn’t trying to cause them any problems, I simply did not know what to do at that time, and told them I would talk with my lawyer, and that they should probably discuss this with their own attorney,” he told me.
Now, for my employer readers, do you know what to do with a deceased employee’s final paycheck? Vacation pay? Earned bonus? Other benefits?
Cindy e-mailed You and the Law a detailed summary of her efforts to obtain Rick’s final paycheck, concluding with these remarks:
“I have left Adam several messages, but to this date he has not released my son’s final paycheck or drilling bonus and we don’t know what to do. With Rick gone, we really need the money. We need to know our rights. Can you help us?”
Naturally, it would be simple to conclude that Adam wasn’t being terribly nice to Rick’s family, or that he might even be planning on keeping the poor man’s final pay for himself.
But nothing could have been further from the truth. I would learn a great deal about both men in speaking with Adam and his lawyer. “He treated Rick very much as his son, welcoming him back to work after the younger man was released from prison for drug and alcohol related matters,” I was told.
When Cindy’s e-mail came in, I decided to test clients who dropped into my office that day with her fact situation.
Most had one of two incorrect answers; (1) The family needs to hire an attorney and file a probate, or; (2) Just show up at the employer’s office and insist upon receiving the check. If they don’t give it to you, call the police.
Few employers know their obligations
“As this isn’t something which happens frequently, the sudden death of an employee easily creates an avalanche of questions and legal issues even experienced business owners aren’t able to deal without consulting their lawyer,” Fresno based Attorney Randy Krebechek commented when I ran the facts of this case by him.
“It is generally not necessary to retain a lawyer or to file a probate. Also, while some employers may just hand over that last paycheck, doing so can create major legal headaches and huge financial responsibility if it is given to the wrong person,” he points out.
“The law has a simplified procedure which makes it possible to quickly get that final paycheck into the hands of these people: (1) a spouse, (2) registered domestic partner, (3) conservator and, finally, (4) guardian. A simple form needs to be filled out, and it’s called the affidavit to collect compensation of deceased.”
“Let’s say a husband dies. If his wife presents this correctly filled-out form to the employer, the law requires immediately handing over that final paycheck. In fact, employers should not release final pay without having that affidavit in their possession,” Attorney Krebechek stressed.
“What is so important to understand is that no court approval is required, and obtaining final pay is completely independent of a probate which might later be filed. Again, this is for spouses, or those other three categories of people entitled to receive these funds immediately.”
What about children of the deceased?
“There is a slightly different procedure for heirs — typically children of the deceased. In Rick’s situation, if there is no will, property will be distributed to his heirs. If he only has one son, the son receives everything. If a paycheck is more than $5,000 and the child is under 18, then a guardian will be appointed by a probate court judge to collect and invest the money.
“Similar to the affidavit filed by a surviving spouse, one is also filed by those surviving children, no sooner than 40 days after the death. In your reader’s case, the only person who has a legal right to the final paycheck is the son. He would be considered Rick’s only heir.
“Employers have a right to rely on those affidavits and pay out the money, free of further legal responsibility. These procedures are to assist families in getting on with the business of living in a regular, orderly fashion without unnecessary delay.”
However, the Fresno attorney was quick to point out what can happen if a false affidavit is submitted to the employer in order to get their hands on money they are not entitled to.
“While the process is streamlined, someone with larceny in their heart could submit a false declaration. This is fraud and would easily lead to criminal prosecution as well as a substantial civil penalty.”
Dennis Beaver practices law in Bakersfield and enjoys hearing from his readers. Contact Dennis Beaver.