Lump-Sum Payment of Accrued Vacation and Sick Time for Deceased Employees

Background

Customarily, state agencies and institutions of higher education issue final payments of compensation for a deceased state employee to an estate of the deceased. However, in rare circumstances these final payments may be issued to an authorized spouse. A spouse is authorized only if:

• A sworn written statement that is notarized (affidavit) is furnished to the paying agency.
  – and –
• The affidavit states:
  • The person who swears under oath (affiant) is the employee’s surviving spouse.
    – and –
  • No person has qualified as an executor of the will or as an administrator of the employee’s estate.

The transaction is made in good faith, and agencies are not required to determine if an affidavit is truthful. The person who accepts payment must answer to any person having prior right to the disbursement.

As in any legal matter, payroll officers should consult with their agency’s general counsel to resolve legal questions on disposition of final payments of compensation for deceased state employees.

Entitlement to Payment

If the deceased employee completed at least six months of continuous state employment, the estate or spouse of a deceased state employee is entitled to:

• The balance of the deceased employee’s accumulated vacation leave.
  – and –
• One-half of the employee’s sick leave (up to 336 hours).

The estate or spouse of the deceased state employee who completed fewer than six months of continuous service may be paid other types of compensation, but will not be paid for any accumulated leave.

Sources

Texas Estates Code Section 453.004; 34 Texas Administrative Code Section 5.44; Texas Government Code, Section 661.031-.038; IRS Publication 15 (Circular E) PDF, Employee’s Tax Guide; IRS Publication 15-A PDF, Employer’s Supplemental Tax Guide.