The employer is incorrect in telling you that a PO box is not acceptable on a W-2 form.
I am giving you a link below to the instructions for filling out a W-2 form. Refer in particular to page 9 of these instructions, under the paragraph that gives instructions for boxes e and f on the W-2 form, which is used for the employee's name and address information.
It specifically states:
Include in the address, the number, street and apartment or suite number (or PO Box number if mail is not delivered to a street address).
You may want to show a copy of these instructions to your employer.
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Thank you jim