Reporting Unclaimed Property
The state of Michigan is clamping down on your obligation to report unclaimed property. Here is a flyer sent to all businesses detailing the State’s stance on this issue.
Unclaimed property are assets (money mostly) that belong to someone else which are in your possession and have gone unclaimed (ie, they haven’t picked them up!). The most common of these are payroll checks. If an employee never picks up their check, you still owe them. And you will always owe them. Turning over the funds to the State of Michigan will properly take care of that obligation and it then becomes the State’s responsibility to hold and payout those funds once the property owner comes looking for their money.
There are time limits as to how long you can hold on to the unclaimed property before you are required to turn it over to the state of Michigan; the most common are payroll checks (1 year), vendor checks (3 years), and customer credit balances (3 years). Your company should institute a policy on how to handle these obligations and periodically assess your responsibility. Have your accounting staff check for these on an annual basis.
The State has made this a priority so I strongly suggest looking into this. They have the ability to assess some pretty steep fines and interest (this is really why they care about this, it’s a revenue generator for the State!). If you have any questions please contact us or visit the State’s website here.