One of our core products at Level is our on-demand pay feature. With a few taps in the Level app you can access a portion of your accrued but unpaid income at any time, ahead of payday. This feature is often more generally referred to as Early Wage Access (EWA).

When you request access to a portion of your earned income in Level, those funds arrive in your bank account in seconds. At the end of the month, you do not have to make any repayments, the amounts accessed are automatically deducted from your net salary on payday.

Level users have described that experience as ‘unbelievably slick’ and even ‘magical’. We often get asked how this works.

This article is an attempt to demystify the technology and processes that makes on-demand pay work, because we believe people have more trust in things they can understand.

What isn’t on-demand pay?

It is important to be clear from the outset that this is not a form of credit. It is not a loan that is repaid on payday. On-demand pay provides workers with ‘access to accrued but unpaid wages’.

Put another way, Level converts hours worked into cleared funds in your bank account, upon your request.

In order to do this Level partners with responsible employers, to obtain the data required to establish your accrued but unpaid wages at any point in time and to ensure withdrawals are deducted from your normal salary on payday.

Keeping time

In order to track your accrued unpaid wages, Level requires certain data about your salary / hourly rate and how many hours you have worked at any point in time during the month. Level establishes that data through a secure data connection with the employer’s HR systems.

Each employer’s systems are different. We have a range of technical and operational methods of establishing that reliable, secure data connection to suit the individual employer’s requirements.

It is important to note that this data is only transferred to Level for employees who have opted into the Level on-demand pay scheme and provided their consent for Level to access data.

For more information about the Data Privacy considerations in relation to launching an on-demand pay scheme, please get in touch.

Availability

Having established your accrued unpaid wages, Level provides you with a balance that is available for you to advance at any time in the Level app. This is typically expressed as a fixed percentage of those accrued unpaid wages, as agreed with your employer.

The amount you have available is displayed to you in the Level app. This updates automatically for every day/shift you work.

You can request any amount up to your limit at any time and Level will transfer that sum to your account instantly.

What happens on pay day?

When onboarding a new employer client, Level establishes technical and operational processes with the employer to make deductions of salary that’s already been accessed directly from each employee’s salary payment.

On payday, any withdrawals from your salary you have already received are deducted from your normal net pay. This is done automatically, without any action needed on your part. On your normal payday, you will receive your normal salary payment, less any salary already paid to you through Level before payday.

Conclusion

The ability to advance the wages you have earned at any time during your pay cycle, is a unique and innovative service. But it does not have to be a ‘black box’. At Level it is made possible by carefully designed and built enterprise technology and processes, connecting Level to an employer’s HR and payroll systems.

Level’s systems are deliberately light-touch and easy to implement from the employer’s perspective and facilitate a valuable service for their employees, which promotes and supports good financial health.