OS Payroll Consulting
There is currently $5.1 billion in unclaimed
property being held by the state
The $5.1 billion belongs to 8.2 million
individuals and businesses.
What is Unclaimed Property
Unclaimed property laws are one of the
original consumer protection programs
It is not a Tax
The state benevolently steps into the
shoes of the „lost owner‟ and takes
ownership of the property until the rightful
owner is found
What is Unclaimed Property?
Inheritances, Bank Accounts
Uncashed Payroll Checks
Uncashed Vendor Checks
Credit balances in A/R
When is Property Considered
Definition of “Abandoned Property” varies
California considers property abandoned
after one year from becoming payable
Dormancy Period – Also varies from state-
What Companies are Affected
by Unclaimed Property?
Every company has unclaimed property.
High audit risk companies include the
Characteristics of High Risk
High employee turn-over.
High visibility in the market place.
Large amount of vendors.
Large A/R credit balances.
Unclaimed Property Audits
Unclaimed Property Audits are a hot topic
for states for the following reasons:
No statute of limitations.
Audits result in large assessments – annual
exposure is cumulative.
Audit projections and extrapolations.
States frequently use contract third-party
auditors on a contingent fee basis.
What Variations Can You
Expect in an Unclaimed
May not take revenue growth or corporate
changes into account.
Reliance on Miscellaneous Income and
General Ledger rather than source data.
Penalties and Interest.
Record Retention Requirements
Notification Requirements (due diligence)
If the employer has in its records an address for the
owner of wages valued at $50 or more, the employer
shall make reasonable efforts to notify the employee
by mail that the wages will escheat to the state if they
The notice shall be mailed not less than 6 nor more
than 12 mths before the time when the owner‟s
property becomes reportable to the state
Reporting Requirements (annually).
Reports due by November 1 for each year
ending as of June 30 to the State
Report requires identification of the
property and the former employee and the
dates when the property became payable
to the employee.
Property valued at less than $50 may be
reported in the aggregate
Property reported as unclaimed is
delivered to the State Controller with the
The Controller may at reasonable times
and with notice examine the records of
any employer .
Any employer that willfully fails to render any
report or perform other required duties shall
be fined $100 for each day a report is
withheld or duty not performed but not more
Fines of $5,000 to $50,000 can also be
assessed against employers that refuse to
deliver the wages to the state, and interest
can be charged for late payment