Introduction
Are you wondering what happens if you don’t pick up your check or what to do with uncashed payroll checks? It’s important to know the rules about this topic so you don’t accidentally break any laws.
Each state has laws regarding how employers must handle unclaimed property, including payroll checks. Below, we’ll discuss the rules specific to Arizona such as time limits, how you can claim old checks, and what to do with unclaimed checks as an employer.
Final Paycheck Rules in Arizona
Like some other states, Arizona has an “at will” policy for employment. This policy allows employers to terminate their employees at their own discretion, as long as it’s done for legal reasons. You should be able to find out whether or not this policy applies by consulting the job application or employee contract for the business.
When your employment ends, your employer must pay you within in a specified time period depending on the circumstance.
Voluntary resignation: If you voluntarily resign, your employer owes you all your final earned wages by the next standard payday within the pay period you resigned.
Involuntary resignation: If you’re laid off or otherwise involuntarily terminated at your job, your final check is due by the next regular payday or within 7 business days (whichever comes first).
You should receive your final check the way you normally do (via a check or direct deposit, for example). Alternatively, you have a right to request that your employer send you a check in the mail.
The wages on your check must include earned commission and overtime. Depending on your employment agreement, you may have access to additional earned commissions.
Unused Paid Time Off in Arizona
You may be wondering if your employer has to include your unused paid time off (PTO) with your final check. In Arizona, employers aren’t required to provide paid time off or vacation time.
If, however, they do decide to include unused PTO, they are not required to add your unused paid time off in your last check.
The employer must have a written policy that explains that they won’t pay out unused PTO. This information is usually included in the company handbook or employment manual.
How Long are Payroll Checks Valid?
Even if you don’t pick up your payroll check, it still belongs to you. If a certain amount of time has passed, your former employer is responsible for following the escheat laws in Arizona regarding the check. In Arizona, wages qualify as abandoned after one year.
The state will hold onto the money (which it will then consider “unclaimed property”) for you until you claim it.
Can an Employer Withhold Your Check?
An employer can withhold part of your paycheck if there is a dispute in reasonable “good faith” about how much you’re owed. This might involve recoupment, debt, a valid claim of reimbursement, or difficulty calculating commissions in time to reach the paycheck deadline.
But if a dispute arises, your employer still owes you the undisputed portion of your wages. They must pay this out within the legally allotted amount of time mentioned previously.
Reporting Laws for Unclaimed Property
Employers in Arizona are legally required to report and remit unclaimed paychecks to the Department of Revenue. They must file unclaimed property reports every year before November 1st, including any unclaimed money for the 12-month period before July 1st.
Your employer is legally required to attempt to contact you before they file an unclaimed report. If they’ve tried to reach you and are unsuccessful in contacting you, the money may qualify as unclaimed.
As long as the employer has no legal claim against you, they have a last known address for you on file, and the check is over $50, the state law requires them to send you a letter 120 days prior to assuming the property has been abandoned.
How to Claim Abandoned Property
You can check for any of your unclaimed property (including old paychecks) with azunclaimed.gov. Claiming abandoned property doesn’t come with a statute of limitations. You don’t have to hire a third-party company in order to find your unclaimed funds. To do so, you’ll simply prove your identity and answer a few questions.
What Else Qualifies as Unclaimed Property?
In addition to old paychecks, unclaimed property can mean state tax refunds, old bank account money, credit balances, deposits turned over by businesses, and more. You might have unclaimed property if you’ve changed addresses.
When someone passes on and their families aren’t aware of their assets, the property will qualify as unclaimed. This typically happens after the account has been inactive for three years. Creating an estate plan can ensure that your assets go to your family instead of qualifying as unclaimed property.
How to Handle Abandoned Checks
As an employer, how should you deal with an unclaimed payroll check? Once the business makes out the check, the money no longer belongs to the company. You have no right to void the check, even if the employee abandoned it.
Instead, you must keep the money available for them or submit it to the state of Arizona as detailed earlier. Failing to do so may count as a breach of fiduciary responsibility.
How to Tell if a Paycheck has been Cashed
If you’ve mailed a previous employee their last check and need to know whether or not they cashed it, let your accounting department know. They should be able to contact the bank to see whether the funds were withdrawn. Otherwise, the financial institution may be able to answer this question for you.
If you’re wondering how long you can wait to cash a personal check, they’re typically valid for a 6-month period from the date on the check. Whether you can cash it after that depends on the bank, however, as some will still cash the check for you after that period. Some companies specify a limit on the check, so look for this before taking any action.
Receive Help with Paycheck Issues in Arizona
Confused about how to handle a late paycheck, abandoned check, or any other employment related matters? Talk to one of our legal professionals today and get your questions answered.
Call our Employment Law team at (480) 464-1111 to discuss your case today.