Are you complying with your reporting and notification obligations for unclaimed wages?

published in McAfee & Taft EmployerLINC | April 15, 2014

As employers, you have so many reporting requirements I know the last thing you want to hear is that there’s another one you may need to factor in. But, as lawyers it’s our job to sometimes be the bearer of bad news.

So, have you been complying with your reporting responsibilities under the Unclaimed Property Act, Okla. Stat. tit. 60, §§ 651 et seq.? The statue requires “[a] person holding property, tangible or intangible, presumed abandoned and subject to custody as unclaimed property under the Uniform Unclaimed Property Act,” to file a report with the Oklahoma State Treasurer concerning the abandoned property. Under the Act, a “person” includes businesses.

Unclaimed, but not forgotten

unclaimed-wagesRemember that laptop and bag of tools that was left behind when an employee never showed up for work again? Or what about that uncashed final paycheck? If the aggregate value of such unclaimed property is $50 or more, it must be reported.

The most common form of unclaimed property that is cause for concern for employers is unpaid wages. According to Oklahoma law, unpaid wages, “including wages represented by unpresented payroll checks” which have not been claimed for over a year, are presumed abandoned and thus must be reported to the State Treasurer. So, that uncashed paycheck you sent to that “no call/no show” former employee 13 months ago not only keeps your checkbook from balancing, but it requires you to file a report and to turn the property or funds over to the state. Failure to do so can be costly for employers.

Mandatory reporting requirements

The required reporting form is maintained by the Oklahoma State Treasurer’s office and can be accessed online here. The required contents of the report are located in the statute at section 661 and include: 1) the name and last known address of the person to whom the check belongs (if it is over $50); 2) a description of the property; and 3) when the check became payable and the last date of employment. And, the report must be verified. You need to file the report by November 1 of each year to include any property reportable as of the preceding July 1.

The fun does not end there. The statute also requires you send written notice of the unclaimed property (assuming it is for more than $50) to the former employee’s last known address at least 120 days prior to filing the report. You are also required to maintain records about the unclaimed property for at least four years after it has been reported.

Of course things can get even more complicated if the last known address of the former employee is in another state. In that case, you need to consult the state laws of the state where you believe the person to reside, and comply with the reporting requirements of that state.

Potential fines and penalties for noncompliance

In summary, make sure you are keeping track of unclaimed paychecks and property and that you are complying with reporting requirements. In Oklahoma, the fines for failing to comply with your obligations include paying interest at an annual rate of 10 percent from the date the property should have been paid in addition to a penalty ranging from $100 for each day the report has not been filed, up to $5,000.