Death of an Employee: Who Receives the Final Paycheck, and When Is the Family Entitled to Compensation?

Quick Overview

• Employment ends automatically on the date of the employee’s death.
• The final paycheck does not always have to wait until the probate proceedings are concluded.
• Death in the workplace does not in itself constitute a work-related injury.
• In the event of death resulting from a work-related injury, the surviving family members may be entitled to several types of compensation.
• An employee is entitled to paid leave—and in some cases, additional unpaid leave—upon the death of a close relative.

Employment ends automatically on the date of death

According to Act No. 262/2006 Coll., the Labor Code, the employment relationship ends on the very day the employee dies. No notice of termination, agreement, or other written termination of the employment relationship is required. The actual date of death is decisive, not the date on which the employer learned of it. For example, if the family informs the employer several days later, the employer must retroactively correct the attendance and payroll records.

The employer will then finalize payroll and personnel records. The employer will calculate any unpaid wages or salary, any bonuses, and compensation for unused vacation time. At the same time, the employer should work with the family or the estate administrator to arrange for the return of work equipment, such as a laptop, phone, keys, or company car.

Who Receives the Final Pay and Unused Vacation Time

The final paycheck is not automatically sent to the heirs or to the deceased’s original bank account. The Labor Code contains a special provision under which wage and salary entitlements up to three times the average monthly earnings are transferred in the following order to:

1. the spouse or legally recognized partner,
2. children,
3. the parents.

The condition is that the person in question must have been living with the employee in a shared household at the time of the employee’s death. Thus, a family relationship or a shared permanent residence address alone is not sufficient. A shared household is defined as a long-term cohabitation in which the individuals jointly cover the costs of their needs. The word “gradually” indicates the order of priority. If, for example, the spouse of a deceased employee meets the conditions, the employer no longer pays the same benefit to her children or parents.

Any amount exceeding three times the average earnings becomes part of the estate. The estate generally also includes other payments that are not in the nature of wages or wage compensation, such as travel expenses that have not yet been reimbursed. In practice, the biggest challenge is proving that the deceased and the beneficiary shared a household. The employer may therefore request, for example, a sworn statement and other supporting documents. Until the matter is clarified, the employer should not automatically transfer the final paycheck to the deceased’s account.

Death at the Workplace Is Not Necessarily a Work-Related Injury

The fact that an employee died in an office, in a production hall, or during working hours does not automatically mean that it was a work-related accident.

According to the Labor Code ,a work-related injury is defined as harm to health or death that occurred independently of the employee’s will due to the sudden impact of external factors while performing work duties or in direct connection with them. The regular commute to and from work is not considered a work-related injury.

If an employee dies, for example, as a result of a long-term illness, it may not be considered a work-related injury even if the death occurred at work. Conversely, a heart attack or other sudden medical event cannot be automatically ruled out. The specific circumstances are decisive, such as extraordinary physical exertion, a stressful situation, and a medically proven connection to the performance of work.

Effective January 2026, the new Government Regulation No. 322/2025 Coll. applies.The employer must report fatal workplace accidents to the relevant labor inspectorate electronically via the State Labor Inspection Office portal. The employer must submit the report on the workplace accident no later than 15 business days from the date on which it became aware of the accident. An accident is also considered fatal if the employee dies as a result of it within one year of the incident.

What Compensation Can Survivors Receive

If an employee dies as a result of a work-related injury or occupational disease, the surviving family members may claim several separate forms of compensation. This is not limited to a one-time payment.

The Labor Code specifically provides for:

• reimbursement of necessary medical expenses and reasonable funeral costs,
• regular compensation for the survivors’ living expenses,
• a one-time payment for non-pecuniary damages,
• compensation for property damage.

Funeral expenses are reimbursed to the person who actually paid them. They may include the cost of the funeral, cemetery fees, travel expenses, or a portion of the cost of mourning attire as defined by law. Maintenance compensation is payable to persons whom the deceased actually supported or was obligated to support. If there was only one such person, the compensation is based on 50% of the deceased’s average earnings. If there are multiple dependents, the total is 80%. Any widow’s, widower’s, or orphan’s pension awarded is deducted from this compensation.

The spouse or partner, children, and parents are also entitled to a one-time compensation for non-pecuniary damage. The statutory minimum for this compensation is twenty times the published average wage. For the year 2026, the base amount, after statutory rounding, is 963,500 CZK. If the compensation is paid to both parents, it is divided between them. Other close relatives who can demonstrate an exceptionally close personal relationship with the deceased may also be eligible.

The most common misconception is the belief that every relative automatically receives all compensation. The group of eligible persons varies depending on the specific type of compensation, and it is always necessary to assess the specific family and economic relationships.

Leave in the Event of the Death of a Close Relative or an Employer

An employee is entitled to time off work upon the death of a close relative pursuant to Government Regulation No. 590/2006 Coll. In the event of the death of a spouse, partner, significant other, or child, the employee is entitled to two days of paid leave and an additional paid day to attend the funeral. In the event of the death of a parent, grandparent, grandchild, or sibling, the employee is entitled to one paid day off to attend the funeral and an additional paid day off if the employee is organizing the funeral.

Upon the death of a spouse, partner, child, grandchild, parent, grandparent, or sibling, an employee may take up to five additional days of leave without pay. Starting in June 2025, basic leave upon the death of a close relative will be granted in full days.

Different rules apply if the employer dies. The death of a managing director, partner, or company owner generally does not terminate employment relationships, as the company itself remains the employer. However, if the employer was an individual entrepreneur, employment relationships may terminate upon the entrepreneur’s death. An exception applies if the eligible person continues to operate the business or provide healthcare services. If the eligible person does not wish to continue, the employment relationships will terminate no later than three months after the employer’s death. The employer’s death alone does not automatically entitle employees to severance pay.

Summary

An employee’s employment relationship ends automatically on the date of their death. However, the employer must finalize payroll and personnel records and correctly determine to whom to pay the final wages and other entitlements.

Pay entitlements up to three times the average earnings may be claimed by a spouse or partner, children, or parents, provided they lived in the same household as the deceased. Other amounts generally form part of the estate.

If the death was related to a work-related injury or occupational disease, the survivors may claim reimbursement of funeral expenses, regular maintenance payments, and a lump-sum compensation. However, each case must be assessed individually, particularly based on the cause of death and the relationship of the survivors to the deceased.