Procedure for Unclaimed Paychecks in California
The California State Controller's Office reported in 2010 that it holds more than$5.7 billion in unclaimed property belonging to at least 11.6 million Californians -- including unclaimed paychecks. California laws regarding unclaimed property require entities, such as banks, employers and insurance companies , to surrender unclaimed property to the state after specific waiting periods, rather than converting it to their own use.
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Reporting Deadlines for Unclaimed Paychecks
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By November 1 of each year the holder of unclaimed paychecks must notify the Controller's Office of the existence of the unclaimed property. Reporters can use standard forms supplied by the National Association of Unclaimed Property Administrators. Between Oct. 31 and April 30 the check holder must diligently attempt to notify the employee about the unclaimed paycheck. The Controller's office's website provides samples of due diligence letters. Under Section 1513 of the California Code of Civil Procedure, holders of unclaimed wages or salaries in excess of $50 must turn the funds over to the State of California's Controller one year from the date the wages were due.
Controller's Office Activities
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Before 2007, the controller could not use state resources to locate and contact the paycheck's owners. Since 2007, changes in the law permit the state to locate and notify workers about wages they may have not realized were still due them. The state has an official "Locator Unit" dedicated to finding owners of unclaimed property. The Controller's office begins in collection efforts while the paycheck is still in the possession of the issuer, using information the check holder supplies in the mandatory Nov. 1 report. The Controller's Office monitors compliance with the state's unclaimed-property laws. The office maintains an online record of unclaimed property and processes claims by owners. Since 2007 the state's activities have resulted in successful claims for over $1 billion dollars worth of unclaimed property. [
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Locating And Claiming Unclaimed Paychecks
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If a worker suspects that there may be an outstanding paycheck due her, she can locate all unclaimed property reported to the state by contacting the State Controller's office by telephone or the internet. Searches can be done using just a surname. The state website lists unclaimed property reported to the state or surrendered to the state. If a search yields unclaimed property, the property owner can initiate a claim by clicking on the "Property ID" number shown for each item in the search results. The link leads to a printable claim form with instructions on completion and submission to the Controller's office. Claims for paychecks valued at $1,000 or more must be notarized.
Penalties for Non-Compliance
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Under Section 1576 of the State Code of Civil Procedure, an organization that deliberately fails to notify the state timely regarding unclaimed paychecks, fails to attempt to locate the check's owner or even fails to use the proper reporting format specified in section 1530 can incur fines of $100 for each day of non-compliance. The maximum fine is $10,000. If, however, the check holder fails to report or deliver the unclaimed property to the state, the fine is a minimum of $5,000 and could reach a maximum of $50,000. The Controller could also assess interest on the value of the property while it was kept improperly in the holder's possession.
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References
- California State Controller's Office: Claimiing Property Held by the State
- California State Controller's Office: Reporting Unclaimed Property
- California State Controller's Office: Unclaimed Property
- California State Controller's Office: Property Reporting Cycle
- California State Controller's Office: Unclaimed Property Message to Californians
- California State Controller's Office: Unclaimed Property Law and Regulations
Resources
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