Early Distribution of Paychecks

[Pamela M. Milazzo]

I have been told that the State of Maryland prohibits the early distribution of paychecks to employees. My questions is, does after 3:00pm the day before a check is dated constitute "early distribution", as a bank will date all deposits for the next day after that time. Also, is it prohibited to mail an employee his paycheck the day before so that it arrives on the date stamped on the check.

[Pattymd]

There is no law in any state which regulates the time of day by/at which paychecks must be distributed, nor when it can be mailed. However, the "3:00 end of the banking day" is not as common as it used to be. Many financial institutions will process deposits made as late as 5 or 6 p.m. If so, according to the concept of constructive receipt, the IRS would consider the payment made as of the earlier date, regardless of the date on the check. As a payroll professional with over 27 years of experience, I would never recommend early release. If your employer offers direct deposit, I would suggest you sign up for it; it solves both these problems.