Your Top Questions About Earned Wage Access – Answered
Earned Wage Access (EWA), also referred to On-Demand Pay, is rapidly becoming a must-have benefit for organisations looking to support their workforce. However, as with any new concept, it comes with plenty of questions. Below we will answer some of the most commonly asked questions about Earned Wage Access.
What is Earned Wage Access?
Earned Wage Access allows employees to access a portion of their already earned wages before the traditional payday. Instead of waiting until the end of the month, employees can withdraw funds they’ve accrued through their work so far.
It is really important to note it is not a loan; it simply provides employees with financial flexibility by giving them quicker access to the money they've already earned.
How does Earned Wage Access work in practice?
Earned Wage Access platforms connect seamlessly with your rota and payroll systems. Here's a simple breakdown of how it works:
Employees track their available earned wages in real time via an app.
They decide how much of their accrued earnings they want to withdraw.
The platform disburses the money instantly to the employee, while you, as the employer, continue with your normal payroll schedule.
The result? No disruption to your existing cash flow or payroll processes.
What are the business benefits of Earned Wage Access?
Adopting Earned Wage Access isn’t just a win for employees; the impact on your business is tangible and significant too.
Reduces Staff Turnover: Earned Wage Access fosters loyalty and satisfaction by addressing financial stress among employees. Reduced stress means happier, more engaged teams who are likely to stay longer.
Minimises Absenteeism and Unfilled Shifts: With immediate access to their earnings, employees have a higher level of financial empowerment, which reduces the likelihood of missed shifts due to money-related issues. Knowing they will be able to withdraw some of their earned wages after their shift also incentives employees to fill shifts.
Attracts Top Talent: Earned Wage Access is an attractive benefit in today’s competitive labour markets, particularly for those looking to stay ahead as employers of choice.
Are there different types of Earned Wage Access?
The main differentiator between providers is the types of reconciliation methods used. Knowing the difference can help you choose the best for your organisation.
Automatic Reconciliation: This option integrates with your payroll system to automate the reconciliation process. It reduces human involvement and eliminates operational errors, making it the most efficient choice for many businesses.
Manual Reconciliation: This method requires payroll or finance teams to manually adjust payroll based on the Earned Wage Access usage report. While it can still work well in some setups, it might require more admin effort.
Some providers only offer one type of reconciliation, however Level is one of only two providers in the UK who can offer both types of reconciliation.
Will Earned Wage Access make more admin work for me?
Not at all. Most Earned Wage Access solutions are designed to integrate seamlessly with existing payroll systems. Automated reconciliation processes negate the need for additional manual work and minimise the margin for errors.
Why should I implement Earned Wage Access?
Offering Earned Wage Access is more than just a financial perk; it’s a statement that your organisation values employee wellbeing. It reduces financial stress, improves mental health, and enhances life balance. At the same time, it positions your organisation as forward-thinking and committed to meeting the evolving needs of today’s workforce.
Investing in benefits like Earned Wage Access will not only support your team but also drive tangible results for your business, from reduced turnover to increased productivity.
Final Thoughts
Integrating Earned Wage Access can transform both employee financial health and your organisation’s overall performance. If this innovative solution interests you, now is the time to explore how it could work for your business!
For more insights or to learn about implementing Earned Wage Access, reach out to our team today. We’re here to help.