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Accounting firm leader talks unclaimed wage trends and best practices.

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TLDR:

In the article, Cathleen Bucholtz, Principal and Unclaimed Property Practice Leader at Baker Tilly, discusses trends and best practices regarding unclaimed wages. Some key points include:

  • Unclaimed property compliance is evolving, with trends such as shorter dormancy periods and new property types like virtual currency and payroll cards.
  • Employers must coordinate across the organization to accurately report all relevant property types, beyond just payroll, to minimize potential audit concerns.
  • Companies must track details of uncashed checks, work with third-party providers, and have robust policies and procedures to mitigate liability issues.
  • California has a unique reporting method for unclaimed wages, with a Voluntary Compliance Program.

Key Insights on Unclaimed Wages

Payroll professionals play a vital role in identifying, tracking, and reporting unclaimed wages to prevent liability issues. As unclaimed property compliance evolves, coordination across the organization is crucial to ensure accurate reporting. Trends in unclaimed wages include shorter dormancy periods and new property types like virtual currency and payroll cards.

Bucholtz emphasizes the importance of understanding state-specific reporting criteria and varying dormancy periods across states, maintaining strong processes to manage outstanding payroll, and working with third-party providers. She also highlights the need for robust policies and procedures to track unclaimed wages from issuance to reporting and to consolidate all records in a dedicated repository for audit purposes. Additionally, she warns against solely reporting payroll, as omitting other property types can attract state auditor scrutiny.

Regarding the use of artificial intelligence (AI) in unclaimed property processes, Bucholtz anticipates that AI will eventually play a role in automation and streamlining the process.

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