What should an employer do with an unclaimed final paycheck?


Issue:

One of your employees quit and then quickly moved without providing a forwarding address for his final paycheck. He has not contacted the company to inquire about the wages. What are your obligations with respect to the unpaid wages?

Answer:    

Employers generally may not keep the wages indefinitely. The procedure varies under state law, but in most cases, an employer must hold on to the wages for a certain period of time (e.g., one year from when wages become payable) and then turn the wages over to the state agency responsible for keeping unclaimed or abandoned property. For example, Texas employers would contact the Comptroller of Public Accounts. In other states, employers would contact the state treasurer.

Some states require employers to file a report of unclaimed wages. Also note that most states have searchable online databases where individuals can search for unclaimed wages and other property held by the state.

Source: National Association of Unclaimed Property Administrators, http://www.unclaimed.org.

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