If your employee loses a paycheck, there's no one-size-fits-all answer as to how you should handle it. The rules are different depending on your state's laws and whether the check was lost before or after the worker received it. It's a good idea to establish a policy for lost checks before the problem arises, however.
If the employer is at fault for the paycheck not arriving – writing the address wrong, for example – then he must replace it. Other situations are less clear, but it's probably wise to replace the check in most cases.
Advertisement Article continues below this adYour employees aren't paid until the direct deposit hits the bank or they have their paychecks in hand. If your state law mandates how often an employee gets paid – once a month, every other week, weekly – you're supposed to deliver the checks by the designated payday. If employees receive their pay late because you mailed them on payday, they may have grounds for legal action.
If the paycheck doesn't arrive at all, what happens next depends on the reason. If you're at fault – you wrote the wrong address or stuck the check in the wrong envelope – your employee is entitled to a replacement check. If the employee is wrong, for example because she gave you the wrong mailing address, there's a good chance you're legally off the hook. Talk to your company lawyer or the state labor department about your state's labor rules.
Advertisement Article continues below this adEven if the loss isn't your fault – your employee threw the check in the trash by accident, the envelope fell out of his pocket – you've still got an employee who didn't get paid. Replacing the check can be a hassle, but it might be worth doing to keep your employee satisfied.
Banks charge a fee for stopping a check. You may think it's fair to deduct the fee from the new paycheck, but the law may disagree. Many states say you can't make deductions unless the employee signs off on them. In that case, ask the employee to pay you the money separately rather than deduct it.
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It's smart to have a written policy in place before any paychecks go AWOL. That way your staff knows what to expect, and you don't have to wing it while an angry employee demands her money. The guidelines should tell your employees what the law requires and what happens if the loss is their fault. Include the policy in your employee handbook so employees, if they read it, will know in advance what to expect.