Company policy on lost paychecks?

Not sure if this belongs here but…

Does the place you work for have any kind of a policy on lost paychecks?
A few days ago one of my employees told me she lost a paycheck and asked if I could give her a new one. So I gave her my standard speil for re-cutting a paycheck.
Here’s your new paycheck but…
-If you find the old one I want it back (I’ll feel better if I destroy it.)
-If you’d like, I can call the bank and have it stopped, I’ll charge you what the bank charges me $35.
-The reason I’m giving you this option is becuase if it does clear the bank wheather it’s becuase you found it and cashed it by accident or someone stole it, or you endorsed it before you lost it, it doesn’t matter, you will have to pay be back for it.

I generally go on to tell them that it’s only worth stopping it if it’s a sizeable check and they really think they lost it, OTOH if the check is $65 and they where cleaning out their car and their almost sure they just tossed in the garbage, they might not want to do it, but I still remind them that if it clears the bank, they have to repay me.

I’ll mention right now, that both of the times this has happened, it’s happened to employees that I beleive to be honest and not trying to pull one over on me, (espcially considering that they where all small checks, nothing worth getting in trouble for).

So then I was thinking, I should probably have this all down in writting and have them sign something agreeing to pay me back if the check clears the bank, and confirming that I gave them the option of having the check stopped.

Then I thought that the best idea would to just have a policy, set it stone.
-Lose you’re check, want it reprinted, it’s $35 (so I can have the first one stopped).
Does that sound fair? Any laws spring to mind that would say I can’t do that (I know YANAL, but IANAL and I can still tell you that you’ll get in trouble for having a minor work 75 hours/wk during the school year at night in WI w/o a work permit)?
What’s your policy?

Out of curiosity, what’s your bank? $35 to stop a check seems like a lot.

Yea, all their charges are rather high, but I didn’t chose the bank, I just do the bookwork. We do have two banks and whenever possible I buy my change and desposit checks in to the cheaper one. But like I said, it’s not up to me.

:smack: To answer your question it’s Park Bank (

Your new policy sounds totally fair. You NEED to stop the check, and they need to pay for it. So you cut them a new check -$35.

What if you fire them or they quit and then “find” the check and cash it? I know you trust your employees but there’s no reason not to hold them liable for their lost check. Having them sign something saying they’ll pay you back seems kind of loosey-goosey. The quickest, easiest and most enforceable policy would be to state upfront that it’s $35 to re-cut a paycheck.

I have done this to my employees before. Not with an official policy or anything (we’re a 3-person shop. technically I only have 1 person as my employee, the other my partner). They were fine with it - they just wanted to be paid.

This is actually a much trickier question than it might first appear. There’s no
completely safe, yet practical way to handle this.

Coincidentally, I researched this precise issue under my state’s law a month ago. (My state is not your state, however.)

To answer this question, to the extent it is answerable, you need to look at the UCC (at least 3 sections relate), and your state’s wage and hours statute. UCC questions are usually easier to answer, because in most cases, each state’s law is the same.

No so here. Although I’m aware that Wisconsin has enacted the 1990 changes to the UCC (I’ve litigated a check endorsement case in Wisconsin), there’s a subsequent revision to one of the key sections that not every state has adopted. Not sure if Wisconsin has, and I’m not at the office. I also have no knowledge of Wisconsin’s wage and hours statutes.

So, other than warning you that a stop payment order is not always effective to protect you from liability under the first check, I can’t answer your question. If this is a regular problem for you, you need to speak with a Wisconsin attorney.

Usual disclaimer. Although IAAL, I’m not licensed in your state. I’m not your lawyer and you’re not my client. This is general information and not legal advice. See a lawyer licensed in your state for that.

My employer would print a new check, and ask you to return the other if found. You have protection from someone else cashing it, just like you always do. You wouldn’t need to stop payment, if you trust the employee. They would be the only person that can legaly cash the old check. Somebody else would be subject to the regular laws on cashing a stolen check. I would suggest even eating the cancelation fee if their a good employee and don’t make a habit of it. That is of course up to you, but it’s the little things that make for a good employee, employer relationship.

Huh? How’s that? I’ll bet if you have a check, written to you, I could get it cashed one way or another. Sure it’s not legal, but I’ll bet I could do it.

That may be the case, but I’d have to hunt them down and sue them. In the mean time I’m out the amount of the check.

Oh, and I don’t know about ALL banks, but I beleive at mine, the stop order is only in effect for six months, not that I would tell anyone that. Hopefully if they find it six months later they figure it was stopped and they throw it away.

Yeah, there are nightmare stories about this in the consumer forum on
Basically a guy will issue the duplicate check, then the employee will cash one check at the bank and another at a check cashing agency.
If the check cashing agency does their job properly, they are a lawful “holder in due course” and can, in fact, collect from the business owner.
Not that this would ever happen to you with the employees you happen to have, but if your business was, say, having former Enron executives detail customer’s cars, you might want to watch your back.
Come to think of it, with employees like that, I’d probably just get old-school and hand out the paystubs along with an envelope full of cash…

It sounds like you need to put expiration dates on your checks then.

It sounds like your employer should move to direct deposit. Then if there is ever a problem, you’re not liable for anything.

I know a guy who this happened to. Imagine his surprise when a check cashing place cashed it and came after him.

  1. Be careful about making deductions from peoples’ pay. Check with your state Department of Labor about how and when it’s legal.

  2. Make the person wait. If they are trying to pull a fast one, they will want to move quickly. If you tell them it will take a few weeks to issue a replacement check, they may “find” the lost check in the mean time. Also, the older the check is, the less likely a check cashing center is to cash it. Call a few check cashing centers and ask what their time limits are.

  3. Make the person sign a “lost check affidavit.” This will discourage people who are honest but desparate.

  4. Be wary of drifters, i.e. people who move frequently from residence to residence and from job to job, who don’t have a bank account but instead use check cashing centers.

At the last place I worked, we asked employees to sign a lost check affidavit, but we never made them wait more than 24 hours for a replacement check. And we didn’t charge them for the stop payment fees.

We’d wait a day for the check to turn up. If it didn’t, we’d do a stop payment. It was risky, but I remember only one time a check was cashed after the replacement was issued. The endorsement didn’t match the employee’s signature and a police report was filed.

Lord knows what happened to all those lost checks. Lots of them went through the wash, and the employees would bring in the pieces.

Nobody wants to be thought dishonest, and it’s not worth the bad feelings to treat employees like they’re thieves.

We’re a small business and try to keep our expenses as low as possable. I’ve only checked ONE direct deposit program, it would would cost us about one dollar per check (not including the EFT debit charge from our bank of fifteen cents I beleive). Just basing it on that, I can’t imagine anyone is going to come in cheaper then what it costs us to write a check. BTW we only have between 10 and 25 employees depending on the time of year.