What if Wages Are Unclaimed or Abandoned?
Employers are occasionally confronted with the problem of what to do with unclaimed wages. This situation arises when an employee leaves or is terminated and the employer prepares the final wage payment, but the employee never claims the payment. What should the employer do?
Most states have some type of provision for the disposition or handling of unclaimed or abandoned property, and, in fact, there is a uniform law on the subject, although many states have their own variations. The basic provisions of the uniform law (and most other state laws on the subject) require the employer to file a report of unclaimed property after a specific statutory period and then surrender it to the state. Other states follow “escheat” procedures, where the employer makes a report to the state and the state files suit for possession of the property. “Escheat” means the vesting of the state in the title to unclaimed property.
The lists below gives the statutory holding period for the 50 states, the District of Columbia and Puerto Rico. The statutory holding period refers to the length of time the property must be unclaimed before it is presumed abandoned.
Example : David terminated his employment with Ace/Rac Corporation in March 2006. Ace/Rac is located in Atlanta, Georgia. Ace/Rac prepared David's last wage payment, but David never returned to claim it. When the payment was mailed to David's last known address, it was returned. In March 2007, Georgia's one-year statutory holding period ends and Ace/Rac should treat David's wage payment as abandoned property.
HOLDING HOLDING
STATE PERIOD STATE PERIOD
Alabama 1 year. Montana 1 year.
Alaska 1 year. Nebraska 1 year.
Arizona 5 years. Nevada 1 year.
Arkansas 1 year. New Hampshire 1 year.
California 3 years. New Jersey 1 year.
Colorado 1 year. New Mexico 1 year.
Connecticut 3 years. New York 3 years.
Delaware 5 years. North Carolina 2 years.
D.C. 1 year. North Dakota 2 years.
Florida 1 year. Ohio 1 year.
Georgia 1 year. Oklahoma 1 year.
Hawaii 1 year. Oregon 3 years.
Idaho 1 year. Pennsylvania 3 years.
Illinois 5 years. Puerto Rico No provision.
Indiana 1 year. Rhode Island 1 year.
Iowa 1 year. South Carolina 1 year.
Kansas 1 year. South Dakota 1 year.
Kentucky 7 years. Tennessee 1 year.
Louisiana 1 year. Texas 1 year.
Maine 1 year. Utah 1 year.
Maryland 3 years. Vermont 1 year.
Massachusetts 3 years. Virginia 1 year.
Michigan 1 year. Washington 1 year.
Minnesota 1 year. West Virginia 1 year.
Mississippi 5 years. Wisconsin 1 year.
Missouri 5 years. Wyoming 1 year.
Reprinted with permission. © CCH
What if wages are unclaimed or abandoned? Employers are occasionally confronted with the problem of what to do with unclaimed wages.
What if wages are unclaimed or abandoned?
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