Handling Abandoned Final Paychecks and Employee Property

When an employee leaves a job—whether through resignation, termination, or job abandonment—California law has strict requirements regarding final wages and personal property left behind. Employers must follow proper procedures to ensure compliance with wage and hour laws and prevent potential legal complications. Here’s what employers need to know about handling unclaimed final paychecks and abandoned employee property.

Final Paychecks and Unclaimed Wages

Final Paycheck Deadlines in California

California law has strict rules on when final paychecks must be issued:

• Voluntary Resignation (72+ hours’ notice): The final paycheck must be provided on the employee’s last working day.

• Voluntary Resignation (less than 72 hours’ notice): The final paycheck must be issued within 72 hours of the resignation.

• Termination or Layoff: The final paycheck is due immediately upon termination.

Failure to provide the final paycheck on time can result in waiting time penalties—equal to the employee’s daily wage for each day the check is late, up to 30 days.

What Happens When the Final Paycheck is Not Claimed?

If an employee does not collect their final paycheck or it is returned as undeliverable, the employer must take specific steps to comply with California law:

1. Attempt to Contact the Employee: Employers should make reasonable efforts to notify the former employee about their final wages via phone, email, or certified mail.

2. Document All Communications: Keep records of all attempts to contact the employee and any responses received.

3. Hold the Paycheck for the Required Timeframe: Employers must retain unclaimed wages for at least one year before taking further action.

4. Send Unclaimed Wages to the State: After one year, unclaimed wages must be sent to the California State Controller’s Office – Unclaimed Property Division. Employers must file a report and remit the funds according to the state's escheatment laws.

Abandoned Employee Property

Handling Personal Items Left Behind

If an employee leaves personal belongings at the workplace and does not return to claim them, the employer should take the following steps:

1. Notify the Employee: Attempt to contact the former employee via phone, email, or certified mail, informing them of their abandoned property.

2. Give a Reasonable Timeframe for Pickup: Provide a deadline (typically 30-60 days) for the employee to retrieve their belongings.

3. Document the Process: Keep a log of all communication attempts and take inventory of the items left behind.

What to Do if the Property Remains Unclaimed?

If the employee does not retrieve their property within the designated timeframe:

• Employers may dispose of perishable items (such as food).

• For valuable property, the employer should store the items for a reasonable period before donating them or disposing of them properly.

• If the property is of significant value, the employer may need to comply with state unclaimed property laws, similar to unclaimed wages.

Final Thoughts

Handling unclaimed wages and abandoned property correctly is essential to avoid legal risks. Employers should maintain thorough documentation, follow all required timelines, and comply with California’s escheatment laws when necessary. By taking proactive steps, businesses can stay compliant and avoid unnecessary disputes with former employees.

For additional guidance, Infinium HR can help ensure you handle these situations correctly and in compliance with California law. Contact us today for expert HR support!