1. &
INSIGHTS
INNOVATIONS
Volume 7, Issue 5, June 2013
CompuPay is one of
the leading payroll, tax
filing and HR-related
service providers in the
country. Since 1980,
we have served the
business community
through affordable and
convenient payroll
solutions. CompuPay
has also established
relationships with
thousands of
accounting and
banking professionals,
allowing them to better
attract, serve and retain
business clients.
PAYROLL AND HR INFORMATION FOR THE BUSINESS COMMUNITY
Finders keepers, losers weepers. Almost
every child is familiar with the sentiment
that being in possession of an item makes
it yours. In the real world, especially in a
business setting, it rarely works that way.
So although it may seem like a logical
idea on the surface to absorb unclaimed
or abandoned property into a business’
assets, it is likely that doing so is illegal
and can put the business at risk.
Any business that cuts checks, pays
employees, receives security deposits, issues
credits, or handles any one of more than 75
categories of possible unclaimed property,
needs to know and understand the basics
of escheatment laws.
Escheatment is the term used for the
process of reporting and turning over all
forms of unclaimed or abandoned property
to a state authority. Enacted on a state-
by-state basis, escheatment laws ensure
that the individual states become the legal
owners of abandoned property. Congress,
in order to control the deposition of
unclaimed property among the states,
enacted the Uniform Disposition of
Unclaimed Property Act of 1954, followed
by the Uniform Unclaimed Property Act
of 1981, and most recently, the Uniform
Unclaimed Property Act of 1995. Although
only a handful of states have adopted the
1995 version of the Uniform Unclaimed
Property Act (UUPA), one or more versions
continued on page 2
The material contained in this document is for informational purposes only and is current as of the
date of publication. CompuPay is not a legal or financial advisor and makes no claims as such.
For financial or legal advice, please see a professional.
© 2013 BenefitMall®. All rights reserved. BenefitMall, the circle “B” logo and the corporate logo are
registered trademarks of Centerstone Insurance and Financial Services, Inc. California License #063979.
© 2013 CompuPay, A BenefitMall Company (800) 362-9519 www.compupay.com
Unclaimed Property
The basics of escheatment law for small business

2. &
INSIGHTS
INNOVATIONS
PAYROLL AND HR INFORMATION FOR THE BUSINESS COMMUNITY
of the UUPA have been enacted by most states.
Failure of a business to comply with UUPA laws
could result in criminal charges as well as steep
penalties and fines.
Defining Unclaimed Property
Although the factors determining whether or not
property is unclaimed varies greatly from state to
state, in general, there are several commonalities
in most state laws. The property in question, with
limited exceptions, is generally an intangible
item, such as uncashed checks, bank accounts,
stocks, bonds, benefits from insurance policies,
etc.; the holder of the property must be legally
obligated to and unable to locate the property
owner; and the property must remain unclaimed
for a period of time referred to as the “dormancy
period”.
Defined by state law, the dormancy period is
determined by the type of property and may
range from one to fifteen years. It is generally
measured from the date the holder comes into
possession of the unclaimed property to the date
the property must be reported to the state.
Reporting Unclaimed Property
Businesses are required to report and remit
unclaimed property to the state annually. As the
requirement to report is based on the property
owner’s state of residence, organizations may
need to submit reports to multiple states. The
BizFilings.com website contains a helpful lookup
of escheatment laws by state that provides detailed
information in escheatment laws and regulations
for each state and the District of Columbia.
Once the property is turned over to the state, the
state holds the property on behalf of the owner
and usually utilizes the property at its will until
it is claimed by the rightful owner.
Auditing Process and Consequence for
Compliance Failure
Unclaimed property can become a substantial
hidden liability for employers. In recent times,
states have turned to an aggressively enforcing
unclaimed property laws as the use of the property
helps to relieve the state’s financial burden.
Companies that do not report or underreport
unclaimed property to the state may find
themselves subject to an audit.
State agencies auditing businesses suspected of
noncompliance will examine the company’s
records and verify accuracy of reports filed for
the previous 10 to 15 years. Auditors will request
evidence substantiating that the property was
abandoned by its owner, and if the property
is unable to be cleared on a bank statement,
refunded, reissued, or adjusted, it may be
considered questionable by the examiner. An
informal preliminary audit report will also be
prepared to outline the findings and is the holder’s
last chance to provide documented proof that
the questionable property is no longer their
obligation.
page 2
continued on page 3
The material contained in this document is for informational purposes only and is current as of the
date of publication. CompuPay is not a legal or financial advisor and makes no claims as such.
For financial or legal advice, please see a professional.
© 2013 BenefitMall®. All rights reserved. BenefitMall, the circle “B” logo and the corporate logo are
registered trademarks of Centerstone Insurance and Financial Services, Inc. California License #063979.
© 2013 CompuPay, A BenefitMall Company (800) 362-9519 www.compupay.com

3. Additional information on the escheatment
process can be found at www.sec.gov. Inquiries
about specific laws or rules should be directed
to an attorney who specializes in securities law.
Visit the National Association of Unclaimed
Property Administrators website to discover if
your state may be holding unclaimed funds that
belong to you.
&
INSIGHTS
INNOVATIONS
PAYROLL AND HR INFORMATION FOR THE BUSINESS COMMUNITY
page 3
The material contained in this document is for informational purposes only and is current as of the
date of publication. CompuPay is not a legal or financial advisor and makes no claims as such.
For financial or legal advice, please see a professional.
© 2013 BenefitMall®. All rights reserved. BenefitMall, the circle “B” logo and the corporate logo are
registered trademarks of Centerstone Insurance and Financial Services, Inc. California License #063979.
© 2013 CompuPay, A BenefitMall Company (800) 362-9519 www.compupay.com
To find out how working with CompuPay
can help your business, please contact us
at (800) 362-9519 or info@compupay.com.