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Final And Unclaimed Paychecks Laws In Michigan

>>> About Final Paychecks Laws In Michigan

State and federal law requires that employers give departing employees their final paycheck within a specified time period or - if a paycheck goes unclaimed - to follow state escheatment rules. The rules in Michigan for both are included below.

Michigan's Requirements For When To Send Final Paychecks

Michigan employers are required to provide the final paycheck on the next scheduled payday.

Q: Can A Final Paycheck Be Paid Via Direct Deposit?
A: Various states have requirements re how - and when - an employer must pay final wages. For instance, many states allow employers to pay final wages via direct deposit if an employee previously authorized direct deposit for wages, but these states often have rules regarding the timing of such payments. As such, definitely check with your legal counsel and/or your state's requirements.

What Should Be Included In A Final Paycheck In Michigan

The final paycheck should contain the employee's regular wages from the most recent pay period, plus other types of compensation such as commissions, bonuses, and accrued sick and vacation pay. Employers can withhold money from the employee's last paycheck if the employee owes your organization.

For More Info On Final Paychecks

For more about Final Paychecks, go to https://www.payrolltrainingcenter.com/payroll-requirements-for-terminated-employees-wt1000388


>>> About Unclaimed Paycheck Laws In Michigan

Amazingly, departing employees don't always collect all wages owed to them. Unfortunately, as a payroll professional, that becomes your problem.

Technically, unclaimed paychecks are subject to 'escheat' laws as unclaimed property under the laws of the state where the employee last worked. This means that employers are required to follow their state's laws for submitting unclaimed paychecks to the state. Not doing so can subject employers to fines and penalties.

Michigan's Requirements For Unclaimed Paychecks

The following are the reporting and recordkeeping requirements for Michigan's unclaimed paycheck laws:

• Recordkeeping Requirements
  Employers must retain a record of the names and last known addresses of payees for ten years after reporting to the state
• Reporting Requirements
  Michigan employers must report and remit unclaimed wages annually. Typically, the report for unclaimed wages must be sent before Nov. 1 of each year for wages unclaimed as of June 30 of that year

Q: What Should Employers Do If They Cannot Find The Ex-Employee?
A: Employers should make - and document - their efforts for contacting the ex-employee and, if they cannot do so, must submit the unclaimed paycheck to the state.

Q: Are There Penalties For Not Forwarding Uncashed Payroll Checks?
A: Yes. Failure to comply with state regulations can result in audit assessments, significant interest accumulations, and criminal penalties. In fact, many states are looking at unclaimed wages as a source of revenue - and your organization could be that source!

Q: Is My Organization Subject To Penalties From Other States?
A: Yes. The laws of the state where the employee last worked apply. Organizations with corporate headquarters in one state and employees in other states could be liable for penalties in all states that they have employees. As such, employers should return any uncashed paychecks to the state where the person last worked.

With regard to recordkeeping, Michigan employers should speak with their legal counsel to determine processes and procedures re how many attempts the employer should make to contact ex-employees.

For More Info On Unclaimed Paychecks

For more about Unclaimed Paychecks, go to https://www.payrolltrainingcenter.com/rules-for-unclaimed-paychecks-wt1000338

Recommended Training Courses For Final And Unclaimed Paychecks:

• Payroll Requirements For Terminated Employees
• Legal Requirements For Unclaimed Paychecks
• Paycheck Fundamentals Training & Certification Program
• Certificate Program For Payroll Specialists