May I have a policy in our employee handbook warning that after six months any uncashed paychecks will be cancelled and not reissued?

No. Employers may not take possession of uncashed payroll checks or refuse to reissue them. Wages remain the employee’s property, and employees may file a claim for unpaid wages within the applicable statute of limitations.

If the employee cannot be located, the wages escheat to the state under the Unclaimed Property Law (Code of Civil Procedure Section 1500 et seq.), administered by the State Controller’s Office.

Unclaimed wages escheat after one year from the date they become payable (Section 1513(a)(7)). Sections 1510 and 1511 provide additional inclusions and exclusions.