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FYI: California Employment Cases Have New Path for Unclaimed Funds

The Department of Industrial Relations (DIR) traditionally managed and distributed unclaimed funds to employees from California employment class action lawsuits. However, the DIR recently announced it will no longer accept checks from settlement administrators, plaintiffs, or defendants arising from private litigation in which the Labor Commissioner was not involved. As a result, any checks the DIR receives dated after Oct. 15, 2018 will be returned.

This means that unclaimed funds in California employment settlements with no designated cy presrecipient or reversion to the defendant will be handled by the California State Controller’s Office’s Unclaimed Property Division. Therefore, California employment settlement agreements must detail how unclaimed funds will be handled, exclusive of the DIR.

California’s Unclaimed Property Law requires entities holding property belonging to another person  to pay those funds to the Unclaimed Property Fund.  The goal of California’s Unclaimed Property Law is to reunite lost and abandoned property with its rightful owner. If a settlement fund still contains money belonging to specific class members in an employment case after the check cashing deadline has passed, those funds should be electronically transferred to California’s Unclaimed Property Fund. Transferring funds to California’s Unclaimed Property Fund is a multi-step process that requires a settlement administrator with experience handling residual funds in employment settlements.

Hands In
Mark Rapazzini
Mark Rapazzini consults with clients in the consumer, food and beverage, labor and employment, finance and mass tort practice areas. He has over 25 years of legal experience in cases ranging from individual personal injury litigation to class actions and complex mass torts. Mark also has over fourteen years of experience managing complex claims administration matters and has managed and supervised the administration of employment, securities, consumer, property, and various other types of class action settlements.


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