A few weeks ago, an acquaintance found out their boss died. Aside from the shock of the loss, they’d been left in limbo. Who was paying their wages, and what were they supposed to do about the suppliers calling up to renew contracts?
I’ve been in this situation, albeit with a client who passed mid-project. The amount of money owed was small, but the pain of getting it huge once family politics took over. Fortunately, I’d dealt with life insurance claims early in my career, so I had a vague understanding of what was going on. It was helped by talking to a lawyer.
This is what I sent them. It’s based on a reply I offered in a Reddit forum some time back, but I think it has worth. View this as a holding pattern, something to give you space and clarity before you press on with what comes next.
First and foremost: get legal advice
There are laws and legal precedents that affect what happens when someone dies. These vary from country to country, often from state to state. All I can offer is a view on what happens in England, as even the nations of the UK have subtle differences.
The Executor is your new boss
If the owner has a will the document should appoint an Executor. Their job is sort out what happens to the estate and could be a solicitor, family member or a trusted friend. The Executor is the only person who has authority to make decisions UNLESS the will says otherwise. Do not take any instructions from individual family members unless it has been cleared with the Executor.
If the owner has no will this is going to be a long and drawn-out process. It can take several years to settle the estates of people who die “intestate“, and usually involves the government and often the courts.
If the owner was a sole trader, it is possible the business has already ceased trading. That means you can’t buy or sell anything, or carry out any business activity. The Executor will be able to establish this.
Are you redundant?
If your boss was a sole trader it is likely your contract of employment ended the moment they died. This means you’re no longer an employee and are redundant. You’ll not be entitled to any notice pay, but you may be entitled to redundancy pay.
More important, you’re no longer in a position to make decisions, pay bills or help someone out. Whether you agree to keep things running while the will is sorted out is purely a personal decision. You’re under no obligation to help out.
You do not have authority to do anything
It doesn’t matter what job title you had, once the owner dies that’s it. You must not take any decisions, commit to any contracts, or perform any duties outside of your normal day-to-day work before you’ve heard from the Executor. All contracts (e.g. insurance, tenancies etc) have to be agreed by them. If you do agree to a contract you could find yourself having to pay its costs.
Money will be a problem
Prepare for disruption to payment of wages, cash flow and other activities that involve access to bank accounts. It can take weeks for banks to resolve issues around authority for payments.
Do not take on debt or distress because of non-payment of fees, wages and so on. Do not take out personal loans in the hope you may be paid. If you’re not paid on time, tell the Executor and consider looking for other work. If the owner was a sole trader, you may already be redundant.
Under some circumstances you contract of employment can carry on until the business formally winds up, or is transferred. This is something for employment lawyers to advise you on.
Paperwork, receipts and invoices
The Executor is likely to ask for all outstanding invoices, receipts and other bills. Get your expenses claims and timesheets sorted out quickly and submitted as soon as they’re asked for.
If the business owes you money (such as unpaid wages, expenses, and fees) get this lodged as quickly as possible. A statement of account, together with copies of unpaid invoices / expenses etc should be enough. Whether you get paid will depend on how much money is left in the estate and if you’re entitled to redundancy or other payments.
Remember you’re not alone
Treat those who contact you asking for help or clarification with respect and remember they will also have their own issues from the owner’s death. No matter how much pressure you’re put under, do not commit to anything unless you have it in writing from The Executor. Accounts Payable teams can become particularly difficult to deal with at this time, so don’t be afraid to hang up.
Look after yourself – no one else will
Remember the phases of grief and they can last for weeks and months. This applies to you as well as the family. Be wary of being overly helpful when there is little visible sign of wages being paid, contracts being agreed, or questions being answered. Many employees have been drawn into severe debt by well-meaning families in denial.