I recommend talking with the payroll coordinator at the facility that you worked, you can also speak with the accounting department and ask that they confirm if the payroll check was cancelled, deposited, or rejected by your bank (for direct deposit). It could be possible that the money was deposited into an incorrect account number, therefore the misunderstanding.
I would not be concerned over suing them, as you would probably lose everything in legal fees and court filing costs. If you still get no resolve, I suggest you call the IRS directly and ask what paperwork you need to fill out to dispute the W2.
goodluck