In the state of Massachusetts, uncashed checks greater than three years of age are considered “unclaimed” and must be turned over to the Commonwealth. The reporting and remittance of all unclaimed wages is due no later than November 1st of each year.

On or before September 1st, all employers must perform due diligence and mail a notification to the last known address of each employee that has unclaimed wages with a value of $100.00 or more.  This notification must contain information on how to claim the wages before they are remitted to the Commonwealth.

This is a perfect time to reach out to those employees still receiving a live check to ask the question, why not direct deposit?

Some employees may feel it takes the fun out of payday, or are concerned that they will lose their record of receipt “pay stub”. Some just aren’t able to obtain a free bank account on their own.  Employees should be reassured that their employer can still issue paper pay stubs or vouchers with all pay information including current deductions and year-to-date totals listed. Employers should consider offering other options such as a payroll debit card for those that may not be able to open an account on their own.

At a minimum, take this opportunity to remind them of the many benefits of direct deposit:

  • No more worrying about lost or stolen checks.
  • No longer having to rush to the bank at lunch time.
  • Immediate access to cash.
  • Ability to make deposits to more than one account.

Payroll direct deposit can significantly reduce the administration and distribution costs associated with paying an employee.  Direct deposit eliminates the need for stop-payment charges, simplifies payroll bank reconciliations and filing and remitting of unclaimed wages. With direct deposit, employers often experience an increase in employee productivity since on paydays employees no longer need to leave work to go to the bank.

Employers with high direct deposit participation will significantly reduce the amount of unclaimed wages that need to be remitted each year. Today, a number of states allow an electronic wage payment program as the only means of payment.  If your organization chooses to adopt this program, in the allowable states, the remittance of unclaimed wages will diminish over time.

Please keep in mind each state has different aging requirements as to when unclaimed wages are considered abandoned. Please refer to your state web page for further information or view the guidelines for Massachusetts.