Payroll Disbursement – Unclaimed Wages

Objective :

Unclaimed wages represent a liability to the Hotel, and shall not be indiscriminately credited to income or the payroll account.

In the absence of conflicting local regulations, unclaimed wages will be held for a period of six (6) months. Then, if still unclaimed, unclaimed wages will be debited and the applicable salaries and wages account credited for the same amount.

Procedure :

1. Paying by Bank Transfer  

Unclaimed wages occur when the employee’s bank account has been closed. In this case, a journal entry supported by the bank’s credit advice/notice will be prepared to reinstate the disbursement amount and to establish the liability for unclaimed wages. Subsequent claims for payment by the employee shall be paid 

Disbursements will be charged to the unclaimed wages account, without exception. The General Leger will make an adjusting journal entry if the unclaimed amount has been previously credited the applicable salaries and wage account.

2.  Unclaimed cash wages and salaries will be processed and controlled as follows:

i. After payroll distribution, unclaimed payroll slip will be returned to Paymaster.

ii. Paymaster will mark beside each missing signature: “Transferred to unclaimed wage list (date).”

iii. Two copies of the unclaimed wage list will be prepared, with columns for employee names, ID numbers, pay amounts, and signatures (if claimed in cash). The Paymaster will retain a duplicate and forward the original to the Human Resources Manager.

iv. The Human Resources Manager will verify the returned pay Slip against the original list, keeping them for seven (7) working days, during which time employees may sign the list and claim their pay.

v. The Paymaster will deposit the unclaimed amounts (separate deposit) and credit the unclaimed wages account. He will forward the list, the individual employee pay slips and the duplicate bank deposit slip to the File Pending Payroll Paymaster. The Paymaster will verify unclaimed wages against the bank deposit slip, initial the slip and forward it to the Income Auditor.

vi. The Paymaster will maintain the list in date order, and reconcile the unclaimed wages account balance monthly, using the list. Wages unclaimed after six (6) months must be credited to the applicable salaries and wages account. The unclaimed wage list(s) supporting this transfer must be removed from the Payroll file and attached as supporting documentation to the journal entry.