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Date: May 12, 2009 
Bulletin Number: 908
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Subject

Non-Negotiated and/or Undeliverable New York State Payroll Checks

Purpose

To identify employees who have outstanding payroll checks that have not been negotiated and provide procedures for agencies to resolve the disposition of these checks.  A new Control-D report, NPAY539, is now available to identify employees who have non-negotiated payroll checks.

Affected Employees

Employees who have an outstanding net payroll check equal to or greater than $50 that was issued more than 60 days from the creation date of the Control-D report.

Effective Date(s)

Immediately.

Background

Section 102 of the Abandoned Property Law clarifies that uncashed checks become abandoned property after one year. As a result, timely resolution is essential.  But more importantly, if an uncashed check represents an inappropriately issued check, negative consequences can occur if it is not resolved.

Often an uncashed check is an indicator that the check was issued in error.  These checks need to be reversed to properly update charges to agency appropriations and adjust taxes.  Additionally, if a check that was issued in error is not reversed within one year, it will become abandoned property and be available to the payee.

It is the joint responsibility of OSC and agencies to take necessary action to prevent and resolve all such matters.

OSC Actions

OSC has produced a new Control-D report, NPAY539 (Non- Negotiated Payroll Checks), listing employees in agency order to whom checks have been issued that appear on an outstanding check report received by OSC Accounting Operations.

The Control-D report will identify employees who have a non-negotiated paycheck in an amount equal to or greater than $50 that is older than 60 days of the report run date.  Employees appearing multiple times on the report indicate several outstanding checks.

Beginning in June, the NPAY539 report will be updated and available during the first week of each month.

Agency Actions

The yearly outreach to employees who have uncashed paychecks for calendar year 2008 will commence in June 2009 by the Department of Taxation and Finance’s Division of the Treasury.  Agencies are requested to first verify the validity of checks dated 2008 on the Control-D report NPAY539.

Agencies should review the NPAY539 report monthly to identify employees with non-negotiated paychecks.

Agencies must ensure the payee is due the funds. If records indicate that the paycheck was delivered to the employee, the employee should be contacted and encouraged to negotiate the check.

If delivery of the paycheck had been attempted but failed, current procedures require that the agency return the check to the New York State Division of the Treasury within 30 days.  Checks appearing on the NPAY539 report that fall into this category must be returned immediately.  The check and Form AC 2714 (Undeliverable Payroll Check Report) may be mailed via the U.S. Postal Service to the Division of the Treasury at:

NYS Department of Taxation and Finance
Division of the Treasury
Attn: Depository Control
PO Box 22119
Albany, NY 12201-2119

For agencies utilizing couriers or overnight mail service, the check and Form AC 2714 should be delivered to:

NYS Department of Taxation and Finance
Division of the Treasury
Attn: Depository Control
110 State Street, 2nd floor
Albany, NY 12207

Checks listed on the NPAY539 report that represent erroneously issued checks must be returned to OSC immediately via Form AC 230 (Report of Check Returned For Refund Or Exchange).

As a reminder, when a valid payroll check is undeliverable due to the agency’s inability to locate the employee, the following procedures must be followed:

  • The check must be secured by the appropriate Business Unit.
  • Within 30 days of the check date, the agency is required to make two (2) attempts to locate the employee and deliver the check.
  • If, after 30 days, the check cannot be delivered to the employee, the check must be returned to New York State Department of Taxation and Finance, Division of the Treasury, using Form AC 2714 (Undeliverable Payroll Check Report) as indicated above.

Questions

Questions regarding this bulletin may be directed to the Payroll Deduction mailbox.