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Dealing With Fraudulently Altered Safe Harbor Back Wage Checks

Bryan Little, FELS Chief Operating Officer

November 11, 2016

FELS has recently learned of an incident where a check issued by an agricultural employer to an (probably) former employee was altered by the recipient (who may or may not have been the intended recipient).  In this particular case, the payment amount was altered to a substantially larger amount than originally intended by the agricultural employer.

The requirements of AB 1513 for agricultural employers who want to avail themselves of the litigation “safe harbor” created by AB 1513 will present numerous opportunities for unscrupulous individuals to fraudulently alter checks issued and mailed in good faith by agricultural employers.  

California law offers protection to check issuers injured by such fraud.  Depending on the situation, the bank of the party writing the check, or the bank that negotiated the check may be legally responsible for the loss.  While we at FELS are not experts at banking law and check fraud, FELS recommends immediately notifying the bank on which the check was drawn about the forgery and demand that the bank restore all funds wrongly paid from it, and filing a police report with local law enforcement. You should also check any liability insurance policies you may have to see if it covers theft of this type.

FELS has found a useful resource that explains the numerous possibilities for check fraud and how the law assigns responsibility for indemnification of a defrauded party.  “The Check Guide” published online by the law firm Manatt, Phelps, & Phillips, LLC can give you a quick overview of your options if you suffer check fraud in the process of trying to make back wage payments.