Page 265 - Essentials of Payroll: Management and Accounting

ESSENTIALS of Payr oll: Management and Accounting
T IPS &T ECHNIQUES

If the human resources department is coordinating an employee lay-
off, it is best to notify the payroll supervisor at least a day in advance,
so this person can coordinate the proper calculation, printing, and
signing of termination payments before the layoffs are begun. By
doing so, an employer can hand out final paychecks at the time of
termination and not have to worry about state laws that sometimes
mandate immediate payments to employees. Also, by calculating
these payments in advance, there is less chance of incorporating a
calculation error, which is likelier to occur when under the pressure of
having a terminated employee waiting for his or her final payment.

next regularly scheduled pay date or the number of days listed in the
first column. If a state is not listed in the table, assume that the termi-
nation payment is required at the time of the next regularly scheduled

pay date. Also, note that many more states have adopted early-payment
laws for involuntary terminations, indicating a much greater degree of
interest in paying off employees who fall into this category.

Unclaimed Pay
Sometimes, when an employee is terminated or becomes aware of a

garnishment order that is about to be implemented against him or her,
he or she will disappear without taking receipt of a final paycheck.
These paychecks should not be cancelled and the funds retained by the
company; instead, individual state laws typically mandate some effort to
contact an employee; after a designated waiting period, the state takes
ownership of the pay. The length of the waiting period, by state, is as
shown in Exhibit 9.7.
Most states also require that these unclaimed pay amounts be listed
on an annual report that is filed with the state.

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