The Ultimate Guide To Earned Wage Access For Employers
Introduction
In today's fast-paced economy, financial flexibility is more crucial than ever for employees. Earned Wage Access (EWA), also referred to as On-Demand Pay, has emerged as a powerful tool that allows employees to access their earned wages before the traditional payday.
This guide aims to provide a employers with a comprehensive understanding of Earned Wage Access, its benefits, implementation strategies, and overall best practices.
What is Earned Wage Access?
Earned Wage Access, or On-Demand Pay, is a financial tool that enables employees to access a portion of their earned wages before the end of their pay cycle. Earned Wage Access is not loan, and so does not run any credit checks, charge any interest, or put employees at risk of debt spiralling. These characteristics make it an employee-friendly option, boosting employee’s financial health.
Refer to this page here which goes into even more detail about what Earned Wage Access is. Also, have a watch of this Level demo video:
Benefits of EWA for Employers and Employees
Benefits for Employers
Enhanced Employee Retention: Earned Wage Access programs can significantly reduce employee turnover by providing financial stability and reducing stress. Level has helped companies reduce staff turnover by up to 50%. See case study here.
Attract Top Talent: Offering Earned Wage Access as a benefit can make your company more attractive to prospective employees. Level has helped companies increase filled shifts by over 60%. See case study here.
Reduced Absenteeism: Financial stress often leads to absenteeism. Earned Wage Access helps mitigate this by providing immediate financial relief. Level has helped companies reduce absenteeism by up to 13%.
Benefits for Employees
Financial Flexibility: Earned Wage Access provides employees with immediate access to their earned wages, helping them manage any unexpected expenses. This means that employees are able to respond to unexpected expenses with their earned wages.
Reduced Financial Stress: Access to earned wages can alleviate the stress associated with waiting for the next payday, as employees can respond to financial demands as and when they arise.
No High-Interest Debt: Unlike payday loans, Earned Wage Access does not involve high-interest rates or hidden fees. This helps them build financial resistance, and avoid debt spirals.
How Earned Wage Access Works
Integration with Payroll Systems: Earned Wage Access providers integrate with existing payroll systems. They are able to track the hours worked and wages earned to make these wages available to employees. Level already integrates with leading HR and payroll systems, and can integrate with additional providers during your onboarding process.
Employee Requests Funds: Employees can request a portion of their earned wages through a mobile app provided by the provider.
Funds Disbursed: The requested funds are disbursed to the employee's account. The funds are made available almost immediately after the request.
Deduction: On payday, the amount accessed via Earned Wage Access, plus any withdrawal fees, is deducted from the employee's paycheck. This can be done manually or automatically.
Implementing On-Demand Pay in Your Organisation
Key Considerations When Evaluating Earned Wage Access Providers
When considering Earned Wage Access, or On-Demand Pay, as an employee benefit it is recommended to research reputable Earned Wage Access providers. In particular, you should only consider providers who are certified by the UK Earned Wage Access Code of Practice. Level is a co-founder and certified member of the code which sets the benchmark for quality in the On-Demand Pay industry, and ensures providers deliver good outcomes for employees using their services.
The provider you choose should also align with your company's needs and values. This may include things such as:
The services other than EWA that are offered by the providers, and if these are appropriate for your employees.
The relevant cost structure of the provider.
The overall certifications held by the provider. (see Level’s accreditations here).
Case Studies
To learn more about how Level can benefit your company and employees with On-Demand Pay and Financial Wellbeing, you can read Level’s case studies here.
Conclusion
Earned Wage Access, or On-Demand Pay, is a powerful tool that can bring benefit to both employers and employees. Earned Wage Access can lead to a more engaged, productive, and loyal workforce by providing financial flexibility and reducing stress. HR professionals and finance managers should consider implementing Earned Wage Access to stay competitive in today's job market.
Ready to offer your employees financial flexibility and improve overall productivity? Book a demo below to learn more about implementing On-Demand Pay in your organisation: