Termination Pay

When an individual’s employment comes to an end, for whatever reason, he or she is legally entitled to payment for all accrued overtime, compensatory time and regular earnings.  The employee also may be entitled to payment for accrued but unused sick leave or vacation time, or some other type of compensable leave, depending on the employer’s policies. The employer should include a provision in the personnel manual explaining termination pay.

Upon the death of an employee, some wages often will have been earned but not paid.  Generally, money that is owed to a deceased person must be paid to the executor or administrator of the estate. Pursuant to T.C.A. § 30-2-103, however, the employee may designate a beneficiary to receive payment of any wages that may be due the employee at the time of death, and employers are encouraged to advise their employees of this option. If the employee has not designated a beneficiary, the employer may pay limited amounts to the surviving spouse, and to surviving children, under the circumstances specified in the statute. The current limit is $10,000.