Emergency Contact or Legal Agent? Determining Who May Act For an Incapacitated Employee

When an employee suffers a serious illness, accident, or other incapacity, a spouse, parent, adult child, or emergency contact may ask the employer for information about compensation, benefits, leave, or personal property. The person may also attempt to give instructions on the employee’s behalf. 

An emergency-contact designation identifies whom the employer may notify. It does not, by itself, authorize that person to make decisions, obtain confidential records, change benefits, or manage the employee’s finances.

An Emergency Contact is Not Necessarily a Legal Agent

An employee may name a spouse as an emergency contact but appoint another person as agent under a power of attorney. Different individuals may hold financial and health care authority. A family relationship alone does not establish authority to act or receive confidential information.

An emergency-contact form should therefore be treated as contact information, not evidence of decision-making authority. Before accepting instructions or disclosing protected information, the employer should determine whether the requester has authority under a power of attorney, guardianship order, or other legal document.

The Scope of Authority Depends on the Document

A financial power of attorney allows an individual to appoint an agent to handle specified financial or property matters. The document may cover insurance, retirement plans, banking, or other transactions, and may be effective immediately or only after a stated event. HR should review the document itself to determine what authority the agent has.

A health care power of attorney authorizes an agent to make medical decisions when the individual cannot do so. It does not necessarily confer authority over compensation, benefit elections, retirement accounts, or other financial matters. A court-appointed guardian may also have authority, but the court order may limit that authority.

Wisconsin Law Governing Powers of Attorney & Guardianship

Wisconsin financial powers of attorney are governed by Chapter 244 of the Wisconsin Statutes. Unless the document expressly provides otherwise, a financial power of attorney is durable and generally continues despite the individual’s later incapacity. Wisconsin law also governs effectiveness, termination, and reliance on an acknowledged power of attorney.

Health care powers of attorney are governed by Chapter 155. Unless the document provides otherwise, the agent’s authority becomes effective after two physicians, or one physician and one qualified advanced practice clinician, personally examine the individual and sign a statement finding incapacity. The individual’s decisions continue to control while the individual has capacity.

Wisconsin guardianships are governed by Chapter 54. A guardian may exercise only powers authorized by statute or court order, and the individual retains rights not assigned to the guardian or otherwise limited by law. A court may appoint a guardian of the person, estate, or both.

If a requester claims authority as guardian, HR should obtain current letters of guardianship, the appointment order, and any later modifying order. The letters establish appointment and the order defines authority. A guardian of the person generally addresses personal welfare, while a guardian of the estate addresses property and financial affairs.

Appointment of a guardian does not necessarily revoke an existing power of attorney. A previously executed financial or health care power of attorney generally remains effective unless the court revokes or limits it for good cause. HR may therefore need to review both sets of documents.

These rules arise under state law, not a uniform federal standard. Employers outside Wisconsin should review applicable state law and the controlling documents.

Recommended Practices for Human Resource Professionals

When someone claims authority, HR should obtain the complete document, verify the requester’s identity, confirm the appointment, determine whether the authority is effective, and decide whether it covers the request.

For example, authority over insurance matters may not include authority to change a beneficiary designation. Authority to receive information may not include authority to make employment decisions. A health care power of attorney may authorize medical decisions without authorizing the agent to address payroll or retirement benefits.

HR should not independently determine that an employee is incapacitated. The governing document and state law may prescribe how incapacity must be established. If the document is incomplete, ambiguous, or does not clearly authorize the requested action, the employer should consult the plan administrator or legal counsel before proceeding.

Bottom Line

Incapacity may require prompt action, but urgency does not eliminate the need to verify authority. Before releasing protected information or accepting instructions, HR should confirm the requester’s identity, the source and effectiveness of the authority, and its application to the request. A consistent review process protects the employee and reduces legal and administrative risk to the employer.

This article, slightly modified to note recent updates, was featured online in the Great Lakes Employment Law Letter and published by BLR®—Business & Legal Resources. Reproduced here with the permission of BLR®—Business & Legal Resources.