An Employee Death Benefit – a guide

An employee death benefit is a provision under the Labor Code designed to provide financial support to the family of a deceased employee during the period of mourning. It serves a protective, social, and compensatory function, and its payment is the employer’s obligation – regardless of the cause of the employee’s death.

The following guide outlines all the key rules concerning the right to an employee death benefit, its amount, the procedure for determining and paying it, as well as the most common practical issues that may arise.

What Is an Employee Death Benefit?

An employee death benefit is a cash payment made by the employer to the family members of a deceased employee. It applies if the employee died during the employment relationship or after its termination, provided they were receiving sickness-related benefits from the Social Insurance Institution (ZUS). This obligation arises from Article 93 of the Labour Code.

The most important features of the death benefit:

• the benefit is mandatory – it cannot be waived or excluded in the contract;
• it applies to every employment contract, regardless of working hours;
• its amount depends on the length of service with a given employer;
• the benefit is paid to the circle of entitled persons specified in the Act;
• It does not exclude the right to a funeral allowance. Both benefits can be received in parallel.

An employee death benefit is not the same as a funeral allowance. These are two different benefits with different purposes and legal bases.

When Is the Employee Death Benefit Due?

The employee death benefit is paid when:

1. the employee dies during the employment relationship, or
2. the employee dies after employment has ended but was receiving sickness benefits (e.g., sickness allowance, rehabilitation benefit).

The cause of death does not affect the right to the benefit.

Persons entitled to the employee death benefit

The following individuals qualify:

• the spouse of a deceased employee;
• children: own, adopted, spouse’s children;
• parents, but only if they meet the conditions for obtaining a survivor’s pension.

The benefit is divided equally among all entitled parties.

When is the employee death benefit not payable?

Employee death benefit is not paid if:

• the family has received a benefit from life insurance equal to or higher than the statutory employee death benefit. The employer is then exempt from the obligation.
• the deceased was not an employee and did not receive sickness-related benefits;
• the person applying does not belong to the circle of entitled persons (e.g. an informal partner).

If the insurance payout is lower, the employer must pay the difference.

Amount of the Employee Death Benefit

The amount depends on the employee’s length of service with the employer:

• under 10 years – one month’s salary;
• from 10 to 15 years – three months’ salary;
• over 15 years of age – six months’ salary.

What is included in the salary basis?

Some of the included factors:

• base salary;
• fixed allowances;
• statutory bonuses;
• overtime pay.

Not included:

• discretionary awards;
• non-salary benefits;
• payments from the Company Social Benefits Fund.

Procedure for Paying the Employee Death Benefit

1. Documents required from the family

The family should submit:

• death certificate;
• documents proving kinship (e.g. marriage certificate, birth certificate);
• a document confirming the right to a survivor’s pension (for parents);
• account number.

2. Employer’s obligations

The employer must:

• identify the entitled individuals ;
• determine the length of service of the deceased;
• determine the basis of remuneration;
• check the payouts from insurance policies;
• calculate and pay the benefit.

3. Payment date

It should happen immediately – usually within a few days.

Practical Examples

Example 1 – several eligible persons, different life situations

An employee who has been hired for 2 years dies suddenly. The death benefit is the equivalent of one month’s salary. Employee leaves behind a spouse and two children – one adult and studying, the other minor. According to the regulations, all three persons are entitled. The employer divides the death benefit equally between them. Each is entitled to 1/3 of the amount. It does not matter that one of the children is already an adult. Age does not affect the right to a death benefit.

Example 2 – No family members that meet the criteria

The employee did not have a spouse, children or parents who met the conditions for obtaining a death benefit. According to Article 93 of the Labour Code, the employer does not pay a death benefit to anyone. The funds are not transferred to the heirs as part of the inheritance. This is one of the most commonly misunderstood rules. The employee death benefit is not an element of the inheritance.

Example 3 – insurance payout exceeding the death benefit

The workplace financed the employee’s group life insurance. The family received 50 000 PLN from the policy. The death benefit would amount to 14 000 PLN. Since the insurance benefit is higher, the employer is not obliged to pay the death benefit. The family cannot demand additional payment.

Example 4 – death after termination of employment, but with the right to benefits

After the termination of the contract, the employee received a rehabilitation benefit. He died during this period. Although he was no longer an employee, the family is still entitled to the death benefit because he received sickness benefits from the Social Insurance Institution.

Example 5 – Dispute over the calculation due to salary components

The deceased received a base salary, quarterly bonuses, and a functional allowance. The employer tried to calculate the death benefit only on the basic salary. The family, with the help of a lawyer, proved that the statutory bonus and the functional allowance are elements of remuneration included in the death benefit base. The death benefit was recalculated, increasing it by several thousand zlotys.

Employer’s obligations

The employer is obliged to:

• the correct determination of the right to benefit;
• payment of the full amount in accordance with the law;
• maintain proper documentation;
• reliable information for the family.

Violations may result in civil liability.

Employee Death Benefit – Summary

An employee death benefit is one of the most important benefits to protect the family of a deceased employee. The employer is obliged to pay it in the appropriate amount. The family does not have to show any special prerequisites other than confirmation of kinship. In practice, the most common problems relate to documentation, determining the length of service and the relationship between death benefit and insurance benefits. In case of doubts, it is advisable to seek legal assistance to avoid denial or miscalculation of the benefit.

If you have questions regarding entitlement to a death benefit, if the employer refuses payment, or if you want to verify the accuracy of the calculations, contact our firm. We provide full case analysis, document preparation, and representation in employee benefit matters.

FAQ – Frequently Asked Questions About the Employee Death Benefit