- Under the Employment Standards Act, an employer must pay wages owing by the later of seven days after employment ends or the next pay day.
- Accrued vacation pay must be paid whatever the reason employment ends, at 4% or 6% of wages depending on length of service.
- The Ministry's manual says an estate has no termination pay when employment ends because the employee died, but severance can differ if notice was given before death.
- Who receives the final pay and what proof the employer needs depends on your situation, so it is worth confirming with a lawyer.
When someone dies, their employer usually still owes them money: wages for the last days worked, accrued vacation pay and sometimes other amounts. If you are the executor, a family member or an employer trying to do the right thing, the practical questions are what is owed, how fast, and who it is paid to.
This article explains the Ontario Employment Standards Act rules that matter most, where the rules are less clear, and the paperwork an employer is likely to ask for. Every situation depends on the contract, the workplace and the facts, so treat this as a guide rather than advice.
Who gets paid when an employee dies
Who is entitled to receive the money the employer owed at death depends on the situation, so it is worth confirming with a lawyer. The Ministry of Labour's manual does not spell this out in so many words, so if the employer is unsure, a lawyer can confirm who has authority to receive the payment.
The executor's role includes settling unpaid debts and overpayments, including taxes owed to the CRA, before distributing what is left to the beneficiaries under the will.
What the Employment Standards Act says the employer owes
The table below sets out the main rules from the Ministry's Employment Standards Act materials. How they apply to a particular death depends on the facts, including the employee's length of service and what the employer did before the death.
| Item | What the rules say |
|---|---|
| Final wages | The employer must pay wages owing by the later of seven days after employment ends or the day that would have been the next pay day. |
| Vacation pay | Accrued vacation pay must be paid when employment ends, for any reason, on the same timing as wages. |
| Vacation pay rate | 4% of wages for under five years of employment, 6% for five years or more. |
| Deductions | An employer cannot withhold wages or make deductions unless a statute or court order allows it, or the employee gave written authorization. |
| Termination pay | The Ministry's manual says death frustrates the employment contract, so the estate has no entitlement to termination pay where employment ended because of the death. |
| Severance pay | Treated differently: the employer cannot rely on the frustration exemption if the employee died after receiving a notice of termination. |
The Ministry's manual does not expressly say that final wages and vacation pay go to the estate on death, so the point about who receives them rests on general practice rather than a stated rule.
Termination pay, severance pay and notice given before death
Families are sometimes surprised that termination pay is not owed when an employee dies. The Ministry's manual treats the death as ending the contract by frustration, and says the estate has no entitlement to termination pay in that case.
Severance is a separate question. If the employee had already received a notice of termination before dying, the employer cannot rely on the frustration exemption. If the employee was close to being let go, or had been given notice, it is worth asking a lawyer whether anything more is owed. How severance applies in your situation depends on the facts, so it is worth confirming with a lawyer.
Paperwork an employer may ask for
Employers and payroll providers usually set their own requirements before releasing money to an estate. Common requests include the following.
- A copy of the death certificate
- Proof that you can act for the estate, such as the will and, where the employer requires it, a court-issued certificate
- Your own identification
- Banking details for the estate account, not the deceased person's personal account
- The deceased person's employee number and Social Insurance Number, which the employer needs for payroll records
- Contact details for the lawyer handling the estate, if there is one
Whether the employer will accept a will alone or insist on a court document varies with the amount and the employer's policy. If a payment is small, some employers are flexible; if it is larger, expect more documentation. A lawyer can tell you which document fits your situation.
Other amounts to ask about
Final wages and vacation pay are not the only possible sources of money. Ask the employer about any group life insurance, pension entitlements, expense reimbursements and benefits that ended at death. This article does not cover group insurance paperwork, which varies by plan.
On pensions, FSRA material on the Pension Benefits Act says that a pension starting on or after January 1, 1988 to a member with a spouse who is not living separate and apart must be paid in joint and survivor form unless both waive before the first instalment, and the survivor pension cannot be less than 60 per cent of the pension in pay. Whether a surviving spouse is entitled to anything depends on the plan and the timing, so ask the plan administrator in writing.
What to do next
- Write to the employer, with a copy of the death certificate, to confirm the date employment ended and that you are the person handling the estate
- Ask for a written statement of final wages, accrued vacation pay and any other amounts, and how they were calculated
- Check that no deductions were taken without a legal basis or written authorization
- Note the payment deadline, which is the later of seven days after employment ended or the day that would have been the next pay day, and follow up if it passes
- Ask about group benefits and any pension separately
- Keep every letter and payroll record with the estate file
- Speak to a lawyer if the employer disputes what is owed, or if notice of termination was given before the death
Frequently asked questions
How fast must an employer pay a deceased employee's final wages?
Under the Employment Standards Act, wages owing are due by the later of seven days after employment ends or the day that would have been the next pay day. How this works when the employer needs to confirm who can receive the money depends on your situation, and you can ask the employer for the timing in writing.
Is vacation pay owed after an employee dies?
The Act requires accrued vacation pay to be paid when employment ends for any reason. It is 4% of wages for those with under five years of employment and 6% for five years or more.
Does the estate get termination pay?
The Ministry's manual says the estate has no entitlement to termination pay where employment ended because of the employee's death. Severance may be different if the employee had already received a notice of termination.
Can the employer take money off the final pay?
Generally not without legal authority. An employer cannot withhold wages or make deductions unless a statute or court order authorizes it, or the employee gave written authorization. If you see an unexplained deduction, ask for it in writing and get advice.
Sources
- Canada.ca – Represent someone who died — canada.ca
- Ontario.ca – ESA Policy and Interpretation Manual, O. Reg. 288/01 — ontario.ca
- Ontario.ca – ESA Policy and Interpretation Manual, Part V — ontario.ca
- Ontario.ca – ESA Policy and Interpretation Manual, Part XI — ontario.ca
- FSRA – Joint and Survivor Pension Waived – PBA s. 44 — fsrao.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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