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Davis Brown Employment and Labor Law Blog

Unclaimed Property Held by an Employer - May 8, 2020

The termination of an employee can raise many issues, including what to do with personal property a former employee leaves at the workplace such as photos and frames, personal tchotchkes, lunch boxes, tools, and even uncashed final paychecks. Right now, with many companies facing difficult decisions to lay off employees or close offices due to the public health emergency, we are answering a number of calls from employers wondering what they can and should do with any personal property left at the office as well as the final paycheck.

Return to Owner

Employers should make efforts to return the former employee’s property to them—reach out via phone or email and find a time when the employee can come to pick up their belongings. Employers may want to arrange to return the personal property at the same time the employee is returning any company-owned property (cell phones, laptops, and other technology, company credit cards, etc.). Make sure to keep a record of your efforts—note phone calls, emails, texts, etc. including copies of the communications.

There may be instances where employers are unable to locate the former employee or are otherwise unable to return property. If this occurs, Iowa law contains several steps that employers must follow for the abandoned property.

Identify Abandoned Property

Each year before June 30, the employer should identify any “abandoned property” in its possession. The time period for property being considered abandoned depends on the type of property.

  • Wages are presumed abandoned if they have not been claimed within one year.
  • Most other tangible property, including computers, cell phones, decorations, and other personal effects, are presumed abandoned if they have not been claimed within three years.

From a practical standpoint, employers must inventory property left behind and date the property before moving the property to secure storage. It is recommended to calendar a 3-year reminder for the second step. Employers should keep a copy of the inventory with other documentation regarding their attempts to reach the employee to return the property.

Final Notice to Owner

Between July 1 and September 30 of the year in which the property is considered to be abandoned, the employer must send a “final notice” letter to the owner’s last-known address (unless the aggregate value of the owner’s property is less than $50). The letter must give the owner at least 30 days to collect the property. A sample letter is available on the Iowa Treasurer’s website.

Report and Deliver to the Treasurer’s Office

If the owner still fails to collect the property, then on or before November 1, the employer must file an electronic report with the Iowa Treasurer’s Office.

If the abandoned property is a paycheck or other funds, the employer must remit the funds to the Treasurer’s Office no later than November 1. Employers may make payment via wire, ACH, or mailing a physical check. If the employer sends a check, a print copy of the electronic report and a copy of the final notice to the owner should be enclosed, and the employer’s FEIN should be included on the check.

If the abandoned property is personal effects or other personal property, the employer must hold the property in safekeeping pending further instruction from the Treasurer’s Office.

The Big Picture

Nothing about this situation is easy for employers or their employees, including handling abandoned property. We recommend a little leeway when it comes to your normal process for handling personal effects left at the worksite to allow for safety concerns or transportation difficulties right now, but the obligations to notify the owner and report abandoned property to the state remain unchanged.

Davis Brown Law Firm blogs, legal updates, and other content are for educational and informational purposes only. This is not legal advice and it does not create an attorney/client relationship between Davis Brown and readers. Each circumstance is different; readers should consult an attorney to understand how this content relates to their personal situation. You should not use Davis Brown blogs or content as a substitute for legal advice from a licensed attorney in your state. Reproduction of Davis Brown content without written consent is prohibited.