Employer withholding 401K Match?

Unfortunately I'm not well versed in 401ks and regulatory policies, however my employer is supposed to make an end of year match of 1.5%.  After not seeing it this month I checked with payroll and they stated:

"You won’t see that until a later date.  For 2017’s match, you should see it in your account by March.  You’ll receive a notice ahead of time from *COMPANY NAME* advising of the exact date of the match and how much it will be."

Now our posted benefit notice is - 

Company Match

*Company Name*  will match up to 3% on the first 6% you contribute to the plan (on a pre-tax or Roth basis).  The first 1.5% will be reflected on your bi-weekly paystub.  The additional 1.5% is contributed for eligible employees* by the company following the close of the plan year.

You are always 100% vested in any contributions you make, and any company match that is contributed on your behalf.

You are always 100% vested in any contributions you make, and any company match that is contributed on your behalf.

*Regular salaried employees who are active as of December 31 of the plan year.

(Yes, the line is posted twice...)

However, I read that as the end of the 401k plan year is December 31st...  So I'm basically losing out on 3-4 months of interest for a benefit that I earned last year. 

Is this normal? Legal? Ethical?

Yes to all the above.  Companies have until their federal income tax due date (including extension) to deposit profit sharing/safe harbor contributions/discretionary matching contributions into your account.

I know it feels like losing 3-4 months interest, but you also might be losing 3-4 months of losses.

I can't help but point out but "following the close of the plan year" doesn't mean right after the close simply at some point in 2018.  As point out by others there are deadlines but it doesn't have to be within days of 12/31. 

If the company files an extension, they may have until September to make the contribution.

And I know one advisor that tells his clients that for Safe Harbor Match, they have until December.  Of course it cannot be deducted on the tax return for the prior year.