We have an employee who requested that a small amount of each payroll be deposited into an account of which the employee is not an owner. The owner appears to be a relative or friend who shares the same address.

Is there any law or regulation that would prohibit part or all of a person's payroll being deposited to another person's account? We do have written authorization from the employee.

As far as I know there is nothing that prohibits you from doing this. However, I would not. You are setting a precedent for others to follow, and you open your payroll system to allow for non standard tranactions. Why not have the employee write the relative/friend a check each time. It makes it a clean transaction.