Office of Payrol Administration

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Payments Owed by the City to Deceased Employees
When a City employee dies, the employee's family or beneficiaries may be entitled to certain payments. The family should first contact the employee's agency to see what payments, if any, are due. For the most part, the agency assists the family in providing the necessary forms and instructions for OPA to release the funds. In some situations, the agency may refer the family or other beneficiary to OPA for guidance.

Note: The procedure outlined below pertains only to situations where the decedent passes with a will or where there is Court administration. Where there is no will or letters of administration, SCPA §1310 will govern. In this situation, please request the applicable forms for processing the decedent’s unclaimed checks from the deceased employee’s agency.

Earned Wages
One payment might be for wages earned prior to death. This may be a partial or full payment for the time the employee worked during the pay period in which he or she died. If there is a will, which has been probated, final payment is made to the employee's executor, who must submit:

  • Original Letters Testamentary
  • A copy of the Original death certificate
  • A W-9 Form from the Executor

If there is no will (or there is a will which has not been probated), payments for wages are made to the next of kin, who may not be the deceased employee's designated beneficiaries. If there is court administration, the next of kin must have been designated as the administrator of the estate, who must submit:

  • Original Letters of Administration
  • A copy of the Original death certificate
  • A W-9 Form of the Recipient

Note: If there is no court administration, then the next of kin is entitled to collect payment for wages pursuant to the limitations set forth in the New York Surrogate Court Procedure Act (SCPA) §1310.

Accumulated Time and Leave
Payment for accrued annual leave and compensatory time will be made payable to the beneficiary designated on the Designation of Beneficiary Form on file with the deceased employee's agency. The beneficiary needs to provide:

  • His or her Social Security number
  • A copy of the death certificate
  • Proof of identity such as a marriage license, birth certificate, passport, or driver's license
  • A W-9 Form of the Recipient

Without a will or a Designation of Beneficiary Form on file with the agency, the next of kin must also provide Original Letters of Administration from the Surrogate’s Court that designates the next of kin as the Administrator. If payments are designated to be made to a minor, the legal parent or guardian must provide court guardianship papers before funds can be released.

Back Pay
If a payment is due for back pay resulting, for instance, from a contractual settlement, the payment will be issued to the estate or next of kin as in the case of final wage payment.

Payment Procedures
For any type of payment, the agency produces a paycheck in the deceased employee's name and sends it to OPA with an Undistributed Check form and Pay Order. OPA issues a replacement check payable to the employee's estate, beneficiary, or next of kin.

If the employee dies after a paycheck was issued to him or her but before the check is cashed, the check should be returned to the employee's agency. The agency will forward the check to OPA. A replacement check will be issued to the estate or next of kin.

Other Payments Owed to Deceased Employees
The above payments may not be all to which the family or beneficiaries of a deceased employee are entitled. Death benefits may be available from the employee's pension system, Deferred Compensation Plan, Union, or Management Benefits Fund. The employee's agency can advise the family or beneficiaries which organizations to contact.

Learn more about the pension plans
Learn about the Deferred Compensation Plan
Learn more about the Management Benefits Fund

Death and Taxes
Payments made on behalf of an employee after his or her death, only during the calendar year in which the death occurred, are not subject to employee withholding taxes but must be reported on a W-2 statement for Social Security and Medicare tax purposes.

This is not so in the case of a deceased uniformed employee or DoE teacher who, at the time of death, was on long-term Line of Duty Injury (LoDI) leave continuously for more than six months following the month of injury. In this case, wages and accrued leave are not subject to Social Security and Medicare tax, regardless of the calendar year in which payment is made, by virtue of the employee's long-term LoDI status.

Payments made in the year subsequent to the employee's death are not subject to either withholding taxes or Social Security and Medicare taxes. However, all payments made to the next of kin or beneficiary are subject to withholding taxes in the name of the recipient. Form 1099-MISC will be sent to the recipient for the year in which the payment was made.

Visit the IRS Web site


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