|Amazingly, departing employees don't always collect all wages owed to them. Unfortunately, as a payroll professional, that becomes your problem.
And now, many states - given the current economic environment - are turning an ever vigilant eye towards unclaimed wages as a source of revenue that can be easily tapped with existing laws. All they have to do is to crackdown on enforcement - and they are doing just that.
Other reasons why unclaimed Property audits are on the rise:
- There is no statute of limitations
- Audits have historically resulted in large assessments – annual exposure is cumulative
- States frequently use contract third-party auditors on a contingent fee basis
Statistically, fewer than 1 in 5 businesses comply with laws for reporting and submitting unclaimed payroll checks and other property. For instance, there is currently $5.1 billion in unclaimed property being held by the state controller's office in the state of CA alone, so you can see whey audits are just around the corner.
Though non-compliance may be simply a matter of the company not being aware of their reporting responsibilities, it won't stop the huge fines and penalties for failing to report unclaimed wages.
Failure to comply with state regulations could now result in audit assessments, significant interest accumulations, and criminal penalties. And organizations with corporate headquarters in one state and employees in other states could be liable for penalties in all states that they have employees. Do you know your obligations?
- When are wages considered abandoned
- What is payroll's responsibility relating to abandoned wages
- The Escheatment rules in general and then as they pertain to the payroll department
- What are your requirements in notifying the employee that they have an un-cashed check?
- How long do you hold the check before it is escheated to the state?
- Which state are you required to escheat to?
- How to set up a system to handle unclaimed payroll checks routinely to avoid a costly audit
- How to establish proper procedures for tracking unclaimed wages correspondence
About Your Speaker
Dayna Reum, CPP, FPC, is a payroll professional with over 15 years experience in both teaching and handling payroll.
Ms. Reum holds both a Certified Payroll Professional and a Fundamental Payroll Certification designation, and is a frequent presenter on various payroll topics. Dayna has worked for companies such as PetSmart, Honeywell, and the American Payroll Association.
Dayna also serves on the National American Payroll Association on the national Strategic Leadership Task Force, has received a Citation of Merit and is a Gold Pin member of the APA. She is certified in HR hiring and firing practices, and is a Six-Sigma Greenbelt.
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