Under California law, payroll checks and other forms of unclaimed property can be turned over to the state after a certain period of inactivity by the rightful owner. For some forms of property, the threshold is three years, but for payroll checks, the period of inactivity is only one year. The law is intended to allow the state to reunite the property with its rightful owner and prevent the property from falling into the wrong hands.
Before notifying the state of the unclaimed funds, the business that issued the unclaimed payroll check is required to send written notice to the person whom the check is made out to, notifying them their funds are about to be turned over to the state. The notice must include a form that the check's addressee has to fill out, sign and mail back if they wish to receive their check. If the owner sends in the completed form, the funds are not turned over to the state; however, if the form isn't returned, the check is turned over to the state controller.
Among the rights and protections that owners of unclaimed payroll checks have are the right to file a claim on the funds at any time for free with the state's Unclaimed Property Division and the right to receive written or electronic confirmation of receipt of the claim within 30 days of when it was received by the state. Also, if the check's addressee files a claim, the Unclaimed Property Division must issue an approval, denial or request more information on the claim within 180 days of receiving it.
If a claim on a payroll check is denied by the state or returned for additional documentation, the claiming party can request an appeal of the decision, but the appeal request has to be filed within 30 days of the date of the denial or the claim return.
- check in macro image by Alexey Klementiev from Fotolia.com