Unclaimed paychecks may sound like a bonus for employers, but Jordan Schwartz at Epstein Becker & Green explains they’re not as beneficial to a company as they may seem.
The issue of whether an employer can use the funds of an expired paycheck for the benefit of the company isn’t expressly covered in the Fair Labor Standards Act and Schwartz says different states contain “various nuances” of the law. However, what happens is that if an employee fails to cash or deposit a paycheck, it converts to “unclaimed property.” And, “despite the former employee’s delinquency in failing to cash or deposit the paycheck, the employer cannot simply pocket the unclaimed funds,” says Schwartz.
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