Employee deferral processed outside of payroll

Is it okay for one employees deferral to be processed outside of regular payroll (appx. a week after everyone else's)? This was an HCE who decided to max out their deferrals at the beginning of 2020 for the 2019 plan year.

Generally deferrals have to be withheld from amounts paid during the year. Was the pay and the deferral included in their 2019 W-2?

I don't see how someone can legally decide in 2020 to max out deferrals for a prior year.

5 hours ago, nerd-party-administrator said:

Is it okay for one employees deferral to be processed outside of regular payroll (appx. a week after everyone else's)? This was an HCE who decided to max out their deferrals at the beginning of 2020 for the 2019 plan year.

I have difficulty understanding your situation.  I think you are asking the wrong question; if you are saying that he wants to defer in 2020 and have it count for 2019, you should already know that is not possible.  Has nothing to do with being outside of "regular payroll".  If the "irregular" payroll was on 12/31/19 to pay a bonus, he certainly could have deferred from THAT payroll for 2019, but not in 2020.

The HCE would have had to make an election to defer, using any means permissible under the plan (clicks on a website, filling out a paper form, scrawling instructions on a piece of paper, email, or even orally) to a responsible person for the plan by 12/31/2019. If he or she did that, but the company did mot implement, then we can move on to other issues, but if he or she did not do it, there was no deferral for 2019.