By Ryan Ashton
There is a fear that post-COVID, a stressed-out employee base may find respite in a new job – or a break from work entirely. A new trend in benefit strategies is rising in response, and in anticipation of potential heightened employee turnover numbers.
Many employers are turning to Earned Wage Access (EWA) as a key employee benefit to assuage this stress. EWA is a way to shorten the gap between the time employees earn their money and when it is actually in their possession. Essentially, it means giving access to a portion of the wages earned ahead of payday.
Products like Instant Pay are simple to offer and provide help to a drained workforce. Most specifically EWA is flexible, accessible, and aligns well with modern day needs and expectations – especially for entry level, gig, or low wage positions.
We are thrilled that Employee Benefit News has published an article that was written by Instant Financial’s CEO, Alaa Pasha. In this piece, he speaks generally about the impact fees have and identifies a few places that employees become burdened by those fees. It is a series of incidents that can add up to a serious situation caused not by ineptitude but by the financial system.
Here are a few key points surrounding fees made within the article:
- The gap between when employees work and when they get paid can lead to late payments, which can destroy credit scores and even mean utility disconnection.
- When low wage workers are pushed into a corner, they may turn to payday lenders which exacerbate the problem via enormous fees charged.
- To put food on the table between paychecks, some rack up credit card debt – and the resulting fees and interest.
- Those with a checking account can inadvertently bounce a check, which starts with a $5 fee but can easily grow into a $300 debt.
- Most Earned Wage Access companies charge a fee to use their service, essentially charging employees to access their own hard-earned money.
- Every fee charged to the working poor makes it harder to dig out of the financial hole.
Alaa Pasha concludes: “In a world where 40 percent of Americans struggle to make ends meet and would be unable to cover an unexpected $400 expense, it is disingenuous for companies who facilitate daily pay to charge fees in order to access that pay. As we move society to a new way of getting paid, let’s not hold people back by charging a fee to do it.”
Is your company ready to start offering your employees one of the most desirable benefits that is free to you and them? If so, let’s explore how Instant Pay can help you address a new way to pay – without changing your payroll or affecting your cashflow.
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