Is It Illegal to Not Pay Employees on Time? 2026 Guide

Yes, failing to pay employees on time is illegal under both federal law and every state’s wage payment statutes. The consequences for employers who miss paydays range from civil penalties and liquidated damages to criminal prosecution in states that treat deliberate wage theft as a crime.

Most employers who miss a payroll assume the employee can just wait. That assumption is wrong and expensive. Under the Fair Labor Standards Act and state wage laws, late payment creates automatic liability that includes not just the unpaid wages but substantial additional penalties on top.

This guide covers what federal law requires, how each state’s paycheck timing laws work, what the specific penalty amounts are, how employees can recover what they are owed, and when late payment crosses into criminal territory.

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Both employers and employees will find the specific answers they need here.

Is It Illegal to Not Pay Employees on Time?

Yes, failing to pay employees on time is illegal under the Fair Labor Standards Act and the wage payment laws of all 50 states. The FLSA does not set a specific payday schedule but requires that wages be paid on the regular payday established by the employer. Missing that payday constitutes a violation of federal law.

The legal obligation to pay wages on time is not discretionary. It is a statutory requirement with real enforcement mechanisms. The U.S. Department of Labor’s Wage and Hour Division investigates employer violations and can recover unpaid wages plus an equal amount in liquidated damages under 29 U.S.C. 216(b).

State laws go further than federal law in most cases. Every state has a wage payment statute that sets specific payday frequency requirements and attaches penalties to violations. California, New York, Illinois, and Washington are among the states with the most aggressive enforcement frameworks and the highest financial consequences for employers who pay late.

Quick Legal Framework for On-Time Wage Payment:

• Federal law (FLSA): Requires payment on established regular payday; violation triggers back wages plus liquidated damages
• State laws: Set specific pay frequency requirements (weekly, biweekly, semimonthly, or monthly) and additional penalties
• Enforcement agencies: DOL Wage and Hour Division at federal level; state labor commissioners at state level
• Employee remedies: Civil lawsuit, DOL complaint, state wage claim, or all three
• Criminal exposure: In states with wage theft criminal statutes, willful non-payment can be prosecuted

The short answer is clear and absolute: not paying employees on time is illegal, and the legal consequences compound the longer payment is delayed.

Is It Illegal to Not Pay Your Employees on Time?

Yes, not paying your employees on time is illegal regardless of the reason an employer gives. Cash flow problems, disputes with clients, or administrative errors do not excuse late wage payment under federal or state law. The employee’s right to timely wages is unconditional.

This question is often asked by business owners who are experiencing financial difficulty and wonder whether hardship creates a legal exemption. It does not. The FLSA and state wage payment statutes treat the employee’s earned wages as a debt that must be paid on the established schedule regardless of the employer’s financial circumstances.

An employer who cannot make payroll has legal options, including seeking a business loan, working with employees to defer payment with their written agreement in some states, or in extreme cases initiating a bankruptcy proceeding. What the employer cannot do is simply not pay on the scheduled payday without legal consequence.

What Does Not Excuse Late Wage Payment:

• Cash flow shortage or temporary financial difficulty
• Dispute with a client who has not paid the employer
• Accounting or payroll processing error
• Employee alleged misconduct (wages still must be paid pending investigation)
• The employer believes the employee owes them money (deductions require separate legal process)
• Business closure or seasonal downturn

The only limited exception involves bona fide wage disputes where the amount owed is genuinely contested. Even then, the uncontested portion of wages must be paid on time.

Is Late Paycheck Illegal?

A late paycheck is illegal under both federal and state law. The moment an established payday passes without the full wages being paid, the employer has violated federal wage law and in most cases the applicable state wage payment statute simultaneously.

The federal FLSA requires payment of all earned wages on the employee’s regular payday. The statute does not specify how late is “too late” in terms of hours or days because any delay beyond the established payday is a violation. A paycheck delivered one day after payday is technically a violation, though enforcement resources typically focus on more significant and sustained non-payment.

State laws are often more specific than federal law about what constitutes a late paycheck. California Labor Code Section 204 specifies the exact days of the month by which wages must be paid for various pay periods. Violation of those specific dates creates immediate liability under California law, including the waiting time penalties under Section 203 for final paychecks.

Late Paycheck: Legal Status Summary:

The final paycheck rules are particularly strict in many states. California requires immediate payment for employees who are terminated, and the next payday for employees who resign with adequate notice.

Key Takeaway: A late paycheck violates both federal FLSA requirements and applicable state wage payment statutes the moment the established payday passes without full payment. There is no grace period under federal law.

What Happens If an Employer Pays Employees Late?

When an employer pays employees late, the legal consequences include liability for the unpaid wages, liquidated damages equal to the unpaid wages under federal law, state-specific penalty payments, and potential civil lawsuits from affected employees. In cases of willful and repeated violations, criminal prosecution is possible in many states.

The practical sequence of events after a missed payday typically begins with employee complaints. Employees can file complaints with the DOL’s Wage and Hour Division, with their state labor commissioner, or both simultaneously. An investigation can be triggered by a single complaint, and the agency will typically review payroll records for the full period allowed by the applicable statute of limitations.

The employer’s exposure compounds with time. Under the FLSA, the two-year statute of limitations for non-willful violations means the DOL or employees can recover wages from the past two years. For willful violations, the statute of limitations extends to three years under 29 U.S.C. 255(a). A pattern of late payments discovered during an investigation can result in back wage liability covering that entire period plus liquidated damages.

Consequences for Late Payment in Escalating Order:

• Immediate liability for the unpaid wages
• Liquidated damages equal to the unpaid wages (effectively doubling the debt) under FLSA 29 U.S.C. 216(b)
• State penalty payments on top of federal liability in states with separate penalty statutes
• DOL investigation and potential public finding of violation
• Employee civil lawsuit in federal or state court
• State labor commissioner enforcement action
• Criminal prosecution in states with wage theft criminal statutes for willful violations
• Reputational damage and difficulty attracting future employees

Most employers who face late payment claims settle the back wages and damages to avoid the cost and publicity of litigation.

How Late Can an Employer Pay You?

Under federal law, an employer cannot legally pay you even one day late beyond the established regular payday. There is no statutory grace period in the FLSA. Any payment after the established payday constitutes a violation of the employer’s legal obligation to pay wages when due.

State laws reinforce this standard and in many cases impose specific deadlines. California Labor Code Section 204 requires that wages earned in the first 15 days of a calendar month be paid by the 26th of that month, and wages earned in the second half of the month be paid by the 10th of the following month. These are hard deadlines with no built-in grace periods.

The practical reality is that DOL enforcement resources focus on more significant violations than a paycheck that was one day late due to a processing error. But that enforcement reality does not change the legal standard. Employees have the legal right to their full wages on the scheduled payday regardless of any processing delays on the employer’s end.

Payday Deadlines by State Type:

Federal law sets a floor. State laws often set higher frequency requirements that supersede the federal standard for employers in those states.

Can an Employer Withhold a Paycheck?

An employer cannot legally withhold an employee’s paycheck for wages already earned. Withholding earned wages is prohibited under both the FLSA and state wage payment statutes regardless of the employer’s reason.

Employers sometimes attempt to withhold paychecks as leverage in disputes, believing they can hold wages until the employee returns company property, repays a debt, or resolves a conflict. That practice is illegal. The FLSA prohibits deductions that reduce an employee’s wages below the applicable minimum wage, and state laws typically impose additional restrictions on any deductions from earned wages.

What employers can do legally is deduct specific amounts from wages with proper authorization or legal justification. Court-ordered garnishments, authorized voluntary deductions like health insurance premiums, and deductions for tools or uniforms that do not drop wages below minimum wage are permissible in most states with proper documentation.

Legal vs. Illegal Paycheck Actions:

California is particularly strict. Labor Code Section 221 prohibits employers from collecting or receiving any part of wages paid, and Section 222 prohibits withholding wages that are due. Violations expose employers to both civil and criminal liability.

Key Takeaway: An employer cannot legally withhold a paycheck for any reason related to a workplace dispute, unreturned property, or alleged employee debt. Earned wages must be paid on time regardless of any ongoing disagreement between employer and employee.

FLSA Late Payment Rules

The Fair Labor Standards Act requires employers to pay all covered employees their minimum wage and overtime at least by their regular payday for the covered pay period. The FLSA itself does not specify a particular pay frequency, but it requires that wages be paid on a regular and consistent schedule that is established in advance.

Under the FLSA’s framework, the employer sets the regular payday. Once that payday is established, it becomes the legal payment deadline. An employer who pays biweekly on Fridays and misses a Friday payday has violated the FLSA regardless of the reason. The obligation runs with the payday, not with any separate notification requirement.

The FLSA covers employees engaged in interstate commerce or employed by an enterprise engaged in interstate commerce with annual sales of at least $500,000. This threshold encompasses the vast majority of private sector employers. Agricultural workers, domestic workers, and certain small employers have different coverage rules, but for most American workers the FLSA applies directly.

FLSA Coverage and Late Payment Obligations:

• Covered employers: Most private sector businesses with annual revenues over $500,000
• Covered employees: Workers engaged in interstate commerce, which is broadly interpreted
• Pay frequency requirement: Regular payday established by employer; no delay permitted
• Overtime: Must be paid at 1.5x the regular rate on the same regular payday schedule
• Statute of limitations: 2 years for non-willful violations; 3 years for willful violations
• Enforcement: DOL Wage and Hour Division; private lawsuits by employees

The DOL can initiate its own investigation without waiting for an employee complaint. Industry-wide investigations of sectors with high rates of wage violations, including restaurants, agriculture, construction, and retail, have resulted in multi-million dollar back wage recovery actions.

FLSA Liquidated Damages for Late Payment

FLSA liquidated damages effectively double the amount an employer owes when employees are not paid on time. Under 29 U.S.C. 216(b), employees who win a wage claim under the FLSA are entitled to recover the unpaid wages plus an equal amount as liquidated damages, unless the employer can prove a good faith defense.

The good faith defense under 29 U.S.C. 260 allows a court to reduce or eliminate liquidated damages if the employer demonstrates that it acted in good faith and had reasonable grounds for believing its conduct complied with the FLSA. This defense is difficult to establish. Simply not knowing about the FLSA or not understanding its requirements is not sufficient to establish good faith. The employer must show affirmative steps taken to comply with the law.

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The practical impact is significant. An employee owed $10,000 in late wages can recover $20,000 if the good faith defense fails. Multiply that across a workforce of 50 employees and the employer’s exposure reaches $1,000,000 for unpaid wages plus liquidated damages, before attorney fees.

FLSA Liquidated Damages Calculation Example:

Attorney fees are also recoverable by the prevailing employee under 29 U.S.C. 216(b). In class action cases, the combination of back wages, liquidated damages, and attorney fees has produced total recoveries exceeding $10 million in notable DOL enforcement actions.

What Is the Penalty for Paying Employees Late?

The penalty for paying employees late includes the unpaid wages themselves, FLSA liquidated damages equal to the unpaid wages, state-specific penalty payments, civil penalties assessed by the DOL, and in willful cases, criminal penalties under state wage theft statutes.

The DOL can assess civil money penalties of up to $2,014 per violation for willful or repeat violations of the FLSA’s minimum wage and overtime provisions under 29 U.S.C. 216(e). These per-violation penalties are separate from the back wages and liquidated damages owed to employees. They represent an additional financial consequence paid to the government rather than to the affected employees.

State penalties vary significantly. California’s waiting time penalties can add up to 30 days of the employee’s daily wages for failure to pay the final paycheck on time. For an employee earning $300 per day, that is $9,000 in penalty wages on top of the unpaid amount. New York allows recovery of up to 200 percent of unpaid wages as liquidated damages for willful violations under New York Labor Law Section 198.

Penalty Overview by Source:

These penalties can apply simultaneously. An employer in California with a federal FLSA violation and a California Labor Code violation faces both sets of penalties at the same time.

Key Takeaway: The total financial exposure for employers who pay employees late includes back wages, doubled FLSA liquidated damages, state-specific penalty wages, government civil penalties, and attorney fees, making the total cost far exceed the original unpaid wages.

State Laws on Late Paychecks

Every state has a wage payment statute that governs when wages must be paid. These state laws typically set minimum pay frequency requirements and attach their own penalties to violations, which stack on top of federal FLSA liability.

The majority of states require wages to be paid at least semimonthly for most employees. Some states require weekly pay for certain categories of workers, particularly hourly or manual labor employees. New York’s Labor Law Section 191 requires manual workers to be paid weekly. Colorado, Connecticut, Massachusetts, and several other states have similar weekly pay requirements for specific employee categories.

State wage payment statutes also address final paycheck timing, which is often the most litigated late payment issue. When an employee is terminated, many states require payment of the final paycheck immediately or within a very short window. California requires immediate final payment for terminated employees. Nevada requires immediate payment for involuntary termination. Massachusetts requires immediate payment for discharged employees and the next payday for those who resign.

State Pay Frequency and Final Paycheck Rules:

These rules represent minimum state requirements. Employers can always pay more frequently but cannot pay less frequently than the state mandate.

Payday Frequency Laws by State

Payday frequency laws by state establish the minimum schedule on which employers must pay their employees. These laws vary significantly across the country, and employers with operations in multiple states must comply with the most restrictive requirement in each state where they have employees.

States with the most frequent mandatory pay requirements include Connecticut, Massachusetts, and New York, which require weekly pay for certain categories of workers. California requires semimonthly pay for most employees. Texas requires semimonthly pay for exempt and nonexempt employees, with monthly pay permitted only for certain executive employees.

The practical impact for multi-state employers is that a single payroll schedule may not satisfy all state requirements. A company with employees in New York (weekly for manual workers) and Texas (semimonthly) cannot use a single monthly payroll schedule and comply with both states’ laws simultaneously.

Payday Frequency Requirements: State Comparison:

Failure to meet the applicable state pay frequency requirement is a violation of state law independent of whether the employer also violated federal law. State penalties apply on top of FLSA liability.

California Late Paycheck Law

California has the most aggressive late paycheck enforcement framework in the country, combining specific statutory payment deadlines, significant waiting time penalties, and a private right of action that makes it easy for employees to sue for late wages.

California Labor Code Section 204 establishes specific semimonthly payment deadlines. Wages earned between the 1st and 15th of the month must be paid by the 26th of that month. Wages earned between the 16th and end of the month must be paid by the 10th of the following month. These are hard deadlines. Payment one day after the deadline constitutes a violation.

The California Labor Commissioner’s Office enforces these deadlines aggressively. Employees can file wage claims with the Labor Commissioner free of charge, and the Commissioner’s office will investigate and hold hearings to recover unpaid wages. The process is relatively fast compared to federal DOL enforcement, with many claims resolved within six to twelve months.

California Late Pay Penalties:

• Back wages owed to employee: 100% of unpaid amount
• Waiting time penalty (Section 203): Up to 30 additional days of the employee’s daily wage for willful failure to pay final paycheck on time
• PAGA penalties (Private Attorneys General Act): $100 per employee per pay period for initial violation; $200 per employee per pay period for subsequent violations
• Attorney fees: Recoverable by prevailing employee
• Civil penalty to the state: Additional amounts under Labor Code enforcement

For a California employee earning $200 per day who is not paid their final paycheck for 30 days, the waiting time penalty alone adds $6,000 to the employer’s liability before any other damages are calculated.

Waiting Time Penalty California

California’s waiting time penalty under Labor Code Section 203 is one of the most financially significant late payment remedies in the country. It applies specifically to final paychecks that are not paid on time when an employee leaves a job, whether through termination or resignation.

Section 203 provides that if an employer willfully fails to pay the final wages of a discharged employee immediately, or fails to pay the wages of an employee who quits within the required timeframe, the wages continue as a penalty from the date they were due until paid, at the employee’s daily rate of pay, for up to 30 calendar days.

The term “willfully” in Section 203 has been interpreted broadly by California courts. The employer does not need to intend to violate the law. The willfulness element is satisfied if the employer knew wages were due and simply failed to pay them on time. Ignorance of the final pay deadline does not satisfy the willfulness requirement.

California Waiting Time Penalty Calculation:

The 30-day cap means the maximum waiting time penalty is 30 times the employee’s daily rate. For high-earning employees, this penalty alone can be substantial even before considering back wages, PAGA penalties, and attorney fees.

New York Late Paycheck Law

New York’s wage payment framework imposes pay frequency requirements, provides significant liquidated damages for willful violations, and includes specific rules for manual workers that are among the strictest in the country.

New York Labor Law Section 191 requires manual workers to be paid weekly. Clerical and other workers must be paid semimonthly. Executive, administrative, and professional employees may be paid monthly with written authorization. Failure to meet the applicable frequency requirement for a worker’s category is an independent violation of New York law.

New York Labor Law Section 198 provides for liquidated damages of up to 200 percent of the unpaid wages for willful violations. Courts have applied this provision to cases where employers failed to pay wages on the required schedule. A New York manual worker who was paid biweekly instead of weekly, and who lost wages as a result, can recover the unpaid amount plus up to 200 percent as additional damages.

New York Late Pay Penalties:

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• Back wages: 100% of unpaid wages
• Liquidated damages for willful violation: Up to 200% of unpaid wages
• Attorney fees: Recoverable by prevailing employee under Labor Law Section 198
• Civil penalties: Assessed by the New York Department of Labor
• Manual worker weekly pay violation: Each biweekly payment instead of weekly constitutes a separate violation

New York courts have held that paying manual workers biweekly instead of weekly, even if the correct total amount is eventually paid, still constitutes a violation of Section 191 because the worker was deprived of access to their earned wages for the intervening week.

Texas Paycheck Timing Law

Texas requires employers to pay wages at least twice per month under Texas Labor Code Chapter 61, with a limited exception for certain executive employees who may be paid monthly. Texas’s paycheck timing requirements are enforced by the Texas Workforce Commission.

Under Texas Labor Code Section 61.011, wages must be paid on regularly scheduled paydays that are no less frequent than semimonthly. The specific days must be designated in advance by the employer and communicated to employees. Changing the pay schedule is permissible but requires adequate advance notice to employees.

Texas Labor Code Section 61.014 governs final paycheck timing. Employees who are discharged must receive their final paycheck within six calendar days of the date of discharge. Employees who voluntarily resign receive their final paycheck on the next regularly scheduled payday following the resignation date.

Texas Wage Payment Key Rules:

Texas does not provide for liquidated damages in the same way the FLSA does at the state law level. However, employees can pursue FLSA claims simultaneously with state claims, recovering federal liquidated damages even when Texas state law does not provide for them directly.

Is Wage Theft a Crime?

Wage theft is a crime in many U.S. states when the non-payment is willful and meets specific dollar thresholds that elevate the conduct from a civil matter to a criminal offense. The criminalization of wage theft has expanded significantly over the past decade as states have recognized that deliberate non-payment of wages is not meaningfully different from other forms of theft.

California Penal Code Section 487 can be applied to wage theft when the amount withheld exceeds $950, treating it as grand theft and a potential felony. The Los Angeles City Attorney and the California Labor Commissioner have jointly pursued criminal wage theft prosecutions in the restaurant, garment, and construction industries.

New York Penal Law makes wage theft a felony when it exceeds $1,000 in a 12-month period. New York City’s wage theft law, enacted in 2011 and strengthened subsequently, treats the willful failure to pay wages as a misdemeanor for amounts under $1,000 and a felony for larger amounts.

State Criminal Wage Theft Laws:

Criminal prosecution for wage theft is most common in industries with documented patterns of abuse and in cases involving multiple employees over extended periods.

Criminal Charges for Not Paying Employees

Criminal charges for not paying employees are available in most states and are increasingly being pursued by state attorneys general and local prosecutors as awareness of wage theft as a form of employee exploitation has grown.

The criminal pathway requires proof of willfulness beyond a reasonable doubt. An employer who missed payroll due to a genuine accounting error is unlikely to face criminal prosecution. An employer who systematically withheld wages from dozens of workers over months while continuing to operate the business and pay other expenses has demonstrated the willful intent that criminal wage theft statutes require.

High-profile criminal wage theft prosecutions have occurred in California, New York, Texas, and Illinois in recent years. The most common targets are restaurant owners, construction subcontractors, and garment manufacturers who have documented patterns of paying below minimum wage, withholding final paychecks, or paying with checks that bounce repeatedly.

Criminal Prosecution Pathway for Wage Theft:

• Employee reports to state labor commissioner or state attorney general
• Investigation reviews payroll records, bank statements, and employee statements
• If willful non-payment is established for amounts above the criminal threshold, criminal referral is made
• Prosecution is filed by state attorney general, district attorney, or city attorney
• Conviction can result in fines, restitution orders requiring full payment to all victims, probation, and prison time
• Federal prosecution is also possible under 18 U.S.C. 664 for benefit plan violations and under 18 U.S.C. 1343 for wire fraud-based wage theft schemes

The combination of criminal prosecution, civil wage claims, and DOL enforcement can pursue the same employer simultaneously through multiple legal tracks.

Key Takeaway: Wage theft is a criminal offense in most states when it is willful and meets applicable dollar thresholds. Criminal prosecutions are increasing, and employers who systematically withhold wages face both civil and criminal consequences.

How to Report an Employer for Not Paying on Time

Employees who have not been paid on time can report the violation to multiple agencies simultaneously, and doing so is free, protected from retaliation, and often effective at recovering unpaid wages quickly.

The first reporting option is the U.S. Department of Labor’s Wage and Hour Division. Employees can file a complaint online through the DOL’s website, by phone, or in person at a local WHD office. The WHD investigates the complaint, reviews employer payroll records, and can recover back wages plus liquidated damages on behalf of all affected employees at no cost to the individual. The process is confidential, and the FLSA prohibits retaliation against employees who file complaints.

The second option is the state labor commissioner or state department of labor, which enforces state wage payment statutes. State agencies often move faster than the federal DOL on straightforward late payment claims. California’s Labor Commissioner’s Office, for example, conducts hearings and issues orders within a relatively short timeframe.

Reporting Options for Late Wage Claims:

Retaliation by an employer for filing a wage complaint is itself illegal under 29 U.S.C. 215(a)(3) of the FLSA and equivalent state statutes. An employee who is fired, demoted, or otherwise penalized for filing a wage complaint has a separate legal claim for retaliation on top of the original wage claim.

Frequently Asked Questions

Is it illegal for an employer to pay employees late in the United States?

Yes, paying employees late is illegal under the Fair Labor Standards Act and the wage payment statutes of all 50 states.
The FLSA requires payment of all earned wages on the established regular payday, and any delay constitutes a violation of federal law.
State laws impose additional requirements and penalties on top of federal law, with California and New York among the strictest states.

What is the penalty for an employer who pays wages late?

The penalty includes unpaid wages plus equal liquidated damages under FLSA 29 U.S.C. 216(b), effectively doubling what the employer owes.
State-specific penalties add to this, including California’s waiting time penalties of up to 30 days of daily wages for late final paychecks and New York’s liquidated damages of up to 200 percent of unpaid wages for willful violations.
The DOL can also assess civil money penalties of up to $2,014 per violation for willful or repeat federal violations.

Can an employee sue their employer for a late paycheck?

Yes, employees can file a private lawsuit against their employer for late wages under both the FLSA and state wage payment statutes.
A successful lawsuit can recover unpaid wages, liquidated damages equal to the unpaid wages, attorney fees, and in some states additional state penalty amounts.
Employees can also pursue DOL complaints and state labor commissioner claims simultaneously with or instead of a private lawsuit.

Is not paying employees considered wage theft?

Not paying employees their earned wages on time is classified as wage theft under many state and federal frameworks.
Wage theft becomes a criminal offense in most states when the non-payment is willful and exceeds specific dollar thresholds, ranging from $300 in Florida to $1,000 in New York for felony-level charges.
Civil wage theft remedies including back wages, liquidated damages, and penalties are available regardless of whether the non-payment rises to criminal level.

How do you report an employer for not paying wages on time?

Employees can report late wage violations to the DOL’s Wage and Hour Division, their state labor commissioner, or both simultaneously.
Both federal and state reporting processes are free, confidential, and protected from employer retaliation under FLSA Section 15(a)(3) and equivalent state statutes.
Employees can also hire a private attorney on a contingency fee basis to pursue a civil lawsuit without paying any upfront legal fees.

The law on employee pay timing is clear and unambiguous. Paying employees late is illegal, the penalties are significant, and enforcement happens through multiple independent channels. Understanding the specific rules that apply in your state is the most important step for both employers and employees.

Bookmark this guide for future reference. The state-by-state differences in pay frequency requirements, penalty amounts, and criminal thresholds are the details that determine your actual legal position in any wage dispute in 2026.

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