What are your financial responsibilities in the funeral of your employee’s family?

By Isabelle Coetzee

When your in-home employee, such as your housekeeper or gardener, loses a loved one, your heart will go out to them, and you may feel compelled to contribute financially towards the costs of the funeral.

However, this comes with a lot of uncertainty. How much should you contribute? What’s too little, and what’s too much? We consider where this tradition comes from, and how you should handle these questions.  

Tip: If you or your employee is struggling with debt, complete the form on this page to sort it out.

Funerals are traditionally a community affair 

According to Reagan Mitchell, director of WealthyMe, there is no legal obligation for an employer to cover or contribute towards their employees’ death benefits.

“This is a cultural tradition that exists largely in non-white communities which has been present for many decades. In these communities, people tend to have closer ties and deeper relationships,” says Mitchell.

“Because of this, when someone passes away, not only does the family mourn, but the entire community mourns. Out of respect for the deceased, the community will bid farewell by attending memorial and funeral services,” he explains.

Mitchell says that most people in non-white communities have limited financial resources, with most earning minimum wages. He says that, as a result, the community almost always chips in to alleviate the financial pressure on the family.

“While there is no legal obligation to contribute, employers usually make a donation for memorial service refreshments or transport and, in some instances, the burial as well,” says Mitchell.

“For employers who really want to assist their full-time in-home staff, I would recommend purchasing a funeral policy, which could start from as little as R100 per month. The lump sum pay out when someone passes is significant enough and goes a long way in assisting the employee,” he adds.

READ MORE: Can you answer these 5 awkward questions about funeral cover?

How to decide how much you will contribute  

Mitchell says that, as the employer, you first need to be aware that your gardeners and housekeepers perceive you to be rich, or well-off, because you are their employer.

“Many employees don’t understand the principle of relativity when it comes to financial obligations and responsibilities,” says Mitchell.

“As an employer, you have a better standard of living compared to your employees. But you invariably have a much higher base cost and you may also just be making it through the month by the skin of your teeth. When your employees understand this, they will adjust their expectations,” he explains.

“The best way to ensure that you are remunerating them fairly is to review the pay scales for housekeepers and gardeners and pay them in accordance with those scales,” advises Mitchell. 

He believes that a little extra generosity won’t hurt, considering that most people who lost their jobs in South Africa during the pandemic are low-income earners.

“When it comes to assisting financially, I think it is prudent to take into consideration the duration the employee has been working for the family, as well as managing the expectation of continuous bailing out. Fairness and clear communication will keep the relationship intact,” explains Mitchell.

READ MORE: Everyone needs a financial adviser, not just the wealthy

What should you do?

Mitchell says that the best option is to provide your employees with a benefit that, at the bare minimum, covers only the employee and not extended family.

“Have a discussion with your employees to ascertain whether or not they have provisions in place through community structures and formal financial services companies,” says Michell.

Reach out to a financial advisor who can assist in determining the average cost of a funeral, assess their current provision against what is required and consider contributing towards a funeral policy to cover the shortfall,” he suggests.

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