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The Earned Wage Access Buyer's Guide

Everything that you need to know to offer Earned Wage Access (EWA) to your employees.

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The Ultimate Guide

Everything you need to know about Earned Wage Access

If you’re looking for the quintessential Buying Guide for earned pay on-demand, you’ve come to the right place.

  • What is Earned Wage Access?
  • Can I offer Early Wage Access myself?
  • How is a using a service provider different?
  • How do I evaluate On-Demand Pay providers?
  • How do I determine I'm getting what I need?
  • How do I get this benefit to employees?

Whether you call it earned wage access, early wage access, instant wage access, on-demand pay, pay on-demand or Wages On-Demand, this employee benefit is one of the fastest growing employee wellness programs in the market. Nearly 3 out of every 4 U.S. employees (72%) want access to their wages before their pay day, according to The Workforce Institute (Source).

With the increasing demand, there’s been a massive explosion in the number of companies offering earned wages on-demand to employees. To that end it’s becoming increasingly difficult for all businesses and, particularly small businesses, to navigate this arena.

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What is Earned Wage Access?

Most employees are pretty much paid the same way they have been for a century. They work, and then two weeks or a month later they receive payment for that time worked. In the interim, they have expenses that need to be managed and this scenario often creates a cash-flow shortfall. Earned wage access is the ability for an employee to access a portion of their paycheck in advance of their regularly scheduled payday.

Can I offer Early Wage Access myself?

Short answer, yes. Here’s a couple of options for offering this benefit without engaging a service provider.

Option A.

The first and most obvious is to increase the frequency of payroll runs. If you pay monthly now, move to bi-weekly pay, bi-weekly move to weekly or weekly move to daily.

There are some challenges with this approach:

  1. It requires you to manage the cash flow. So as a business owner, if your receivables do not align with this increase in payroll frequency, you could find yourself in a cash flow deficit.
  2. How much time do your payroll people have? This can certainly increase their workload.
  3. Are you using a payroll system that even allows you to do that?
  4. How much will it cost you to run this each pay run?

Option B.

You can provide cash advances on your own. Here’s a great article on some of the risks and benefits of providing employee loans or advances.

To summarize a few key points:

  1. Make sure you have a template employee loan agreement drafted by or reviewed by a lawyer.
  2. Establish an employee loan policy that in no way, shape, or form could be viewed as discriminatory.
  3. Set proper rates and terms and ensure you do not reduce the amount of an employee check to less than mandated minimum wage.
  4. Understand the potential financial risk and recourse in the event an employee departs prior to the amount being repaid in full.

How does using a Wages On-Demand service provider differ from doing this myself?

Let’s outline at a high level how most on-demand wage providers work.

  1. They require an integration into your payroll and/or HR system. This integration will help smooth the employee sign-up process and will allow the service provider to read pay and time worked data in order to calculate if an employee has worked and how much they’ve worked.
  2. The on-demand pay provider is the one to send the employee the amount of the requested advance.
  3. The provider is then repaid via a deduction or direct deposit posting on the employee profile on the next pay run.
The key differences of having a third party offer this service is that your financial risk is limited as the terms of the advance are between the third party and the employee, and that this service is an advance against current earnings, not a loan against future earnings.

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Download the Buyer's Guide (PDF) to learn:

  • How do I evaluate On-Demand Pay providers?
  • How do I determine I'm getting what I need?
  • Get Earned Wage Access today