Has anyone ever had problems with employees cashing checks after the business cutoff the day before payday? Over the past year or so while we are reviewing employee statements we have noticed a handful of employees that cash checks after the business day ends, 2:00 p.m., and are receiving funds from money they don't have. This is occuring on the day before payday so they know that they will have funds in the morning but since our policy does not permit tellers to pull up employee accounts, they are unaware that the checks they are cashing are not against available funds.

In the past we have had to have "one on one" discussions with employees to let them know that they cannot draw against funds that are not there, but it seems that more and more of them are doing this.

Any thoughts?

Are you talking about bank's staff? If that is the case, this would be very strange. Salary payment should be a direct deposit to staff account. And our systm does not allow the staff to overdraw his/her account period.

Frankly, I don't know why this would be "wrong". If your business day ends at 2:00, then at 2:01, the next business day would be under way. As long as the employee is using a teller that has cut over to the "next business day", it would be the same as being there at 9:00 a.m. on payday. Either way, the teller can't see the available funds so don't really know how that comes into play.
If employees are overdrawn as of the end of the business day because they went to a teller not yet on "next business day" or took more than their balance, even after their payroll deposit, then you have an issue.

A further thought...ask your tellers how many other business payroll checks they cash after your cutoff on Thursdays. If your area businesses are like ours, many issue Friday payroll checks to thier employees after 4:00 on Thursday because they know even if the employee runs straight to the bank to cash it, it won't be processed against their account until the next day--for which they will have deposited the funds to cover the payroll.