Workday Earned Wage Access: A Comprehensive Overview

Workday earned wage access is a relatively new concept that's gaining traction in the employment landscape. It allows employees to access a portion of their earned wages before their regular pay day.

This innovative solution is designed to help employees manage their finances more effectively, reducing the need for payday loans and other high-interest credit options. By providing access to earned wages, employers can also improve employee satisfaction and reduce turnover rates.

Studies have shown that employees who use earned wage access services tend to have better financial stability and reduced stress levels. This, in turn, can lead to increased productivity and better overall job performance.

Employers can offer earned wage access through various platforms, including mobile apps and online portals. These platforms typically allow employees to request access to a portion of their earned wages, which are then deducted from their next regular pay.

Earned Wage Access allows employees to access a percentage of the wages they've already earned whenever they want. This is an interest-free advance on their wages, and companies often add it to their benefits to help workers with cash flow issues.

On-demand pay is a payment method that enables employees to receive a part of their pay before the respective pay period is over. This gives them greater financial flexibility.

Earned Wage Access is a payroll feature that allows employees to access the wages they have already earned during the current pay period before the actual payday. For hourly employees, this means having real-time access to accrued wages.

Employees can think of on-demand pay as getting a head start on their paycheck, without having to wait until the end of the pay period.

Earned wage access is a game-changer for employees who struggle to make ends meet between paychecks.

63% of Americans live paycheck to paycheck, and 40% can't afford basic needs like groceries and rent. This is a staggering reality that's driving demand for early pay solutions.

The cost of living is too high, and cash isn't flowing fast enough to meet the needs of today's employees. This has led to a rise in predatory lenders who charge high-interest loans and fees.

Employees want access to their earned wages anytime, anywhere, and it's no wonder why – 78% of Americans find it somewhat to very difficult to meet their financial obligations if their paycheck were delayed by only one week.

Here's a breakdown of the demographics that are most in need of earned wage access:

The benefits of earned wage access are clear – it's a way for employees to access a portion of their earned wages before the scheduled payday, and it's a solution that's gaining traction in the market.

Offering Earned Wage Access is a great way to support your employees' financial well-being, and it's easier than you think. You have three main options: DIY EWA, implementing EWA through your payroll provider, or working directly with a service provider.

Implementing EWA through your payroll provider or a service provider can save you time and resources. According to a study, offering EWA can reduce turnover by 29%, increase job applicants by 2X, and cut absenteeism by one day per employee per month.

Here are the three main options for offering EWA:

Offering Earned Wage Access can be a game-changer for your business.

EWA reduces turnover by 29%, increases job applicants by 2X, and cuts absenteeism by one day per employee per month. This means you'll save money on recruitment and training, and have a more productive workforce.

Before you decide to offer EWA, consider the signs your team will actually use it. If you already have an employee loan program, employees routinely ask for paycheck advances, or they're taking out payday loans or other predatory loans, it's likely they'll benefit from EWA.

EWA is not just beneficial to employees, but also to employers. It's a valuable asset for talent acquisition, improving employee retention, and positively impacting employee productivity. In fact, 79% of respondents in an EWA-focused survey stated their willingness to switch to an employer who offered Earned Wage Access.

However, implementing EWA requires careful consideration. You'll need to weigh the costs of the technology against the benefits it provides. But with the right EWA provider, you can create a more supportive work environment, reduce turnover, and enhance your employer brand.

Here are some key statistics to consider:

DailyPay exclusively serves enterprises, making it a clear choice for businesses with a large workforce. We, on the other hand, cater specifically to Small to Medium-sized Businesses (SMBs).

There are also providers that specialize in specific verticals, such as healthcare, hospitality, and quick service restaurants (QSR), among others.

Many EWA programs are free for employers, as providers take on the costs and risks associated with the program.

For the most part, employers don't pay a dime for EWA solutions, which provision and fund accounts, manage the app, and provide customer care.

Employees, on the other hand, pay a transaction fee of up to $5 for payouts directly to their bank accounts, depending on the provider.

Some EWA tools offer fee-free payout options, so it's worth keeping an eye out for those.

Implementing Earned Wage Access (EWA) can be done in various ways, including working directly with an EWA provider, leveraging a payroll provider, human capital management (HCM) solution, or professional employer organization (PEO).

If you can't find an EWA provider that integrates with your payroll partner, HCM solution, or PEO, implementation is likely to be slow and resource intensive.

You can also explore working directly with an EWA provider, which typically establishes a relationship with your payroll partner, HCM solution, or PEO, allowing you to access their service.

To find a suitable EWA provider, consider security standards, program cost and applicable fees, and compliance advice with regard to Earned Wage Access legislation.

Some popular payroll providers that offer EWA include ADP, Paycom, Paylocity, Paychex, and Ceridian, among others.

Here are some key factors to consider when choosing an EWA provider:

If you're looking for a hassle-free way to offer Earned Wage Access to your employees, consider partnering with a payroll provider. ADP, Paycom, Paylocity, Paychex, Ceridian, and many more top brands already offer on-demand pay, making it easy to activate EWA in minutes without any extra lift.

Some payroll providers have marketplaces where you can effortlessly enable EWA, and these tools are often free for you to offer. Additionally, if you're using a human capital management (HCM) solution, you may already have access to EWA through their marketplace. For instance, UKG, one of the biggest HCM solutions, has a marketplace chockfull of Earned Wage Access options.

If you outsource some or all of your HR to a Professional Employer Organization (PEO), be sure to check if they're partnered with an EWA provider. Many PEOs, like VensureHR, are partnered with EWA providers, making it easy to get EWA up and running with minimal effort.

Here are some top payroll providers that offer Earned Wage Access:

ZayZoon is the only EWA provider that doesn't require time and attendance data, which is a huge relief for businesses.

This means you don't have to worry about collecting and managing this data, which can be a hassle.

ZayZoon uses a proprietary algorithm to calculate wages based on historical earnings, employment tenure, industry, position, and other data points.

This algorithm is able to make predictions about what an employee is likely to earn at any given time.

Predictions aren't 100% accurate, so in instances where the draw is not repaid in full, the deduction will stay in the system until the next payroll run.

If the employee is no longer with the business, ZayZoon will reach out to them with a link to repay their draw via a different method.

ZayZoon absorbs any loss, so it's not a hit to the employer or payroll partner.

ZayZoon also doesn't report employees to credit or send them to collections, and instead offers them the option to repay their draw in a different fashion.

When evaluating Earned Wage Access providers, it's essential to consider their capabilities and features. A good provider should offer payout options that suit all employees' needs, including those without a bank account.

In fact, 5% of Americans don't have a bank account, so it's crucial to offer alternative payout options. ZayZoon, for example, offers a gas card that can be added to a customer's mobile wallet and used at all major gas stations.

When choosing an Earned Wage Access provider, security standards are a top priority. The EWA application will have access to sensitive payroll data, so it's essential to select a provider with robust security measures in place.

Here are some key features to look for in an Earned Wage Access provider:

Qsalary, for instance, shines in these aspects, providing a user-friendly platform that effortlessly integrates with your payroll system.

You can't just pick any Earned Wage Access (EWA) provider, you need to choose one that fits your needs.

Typically, an EWA provider will establish a relationship with your payroll partner, HCM solution, or PEO, so you can access their service. The integration takes very little time to process, which means you can be up and running in no time.

To select a suitable EWA provider, consider security standards, program cost and applicable fees, and compliance advice with regard to Earned Wage Access legislation.

Here are some key factors to consider when choosing an EWA provider:

Some EWA providers, like Qsalary, shine in all these aspects, providing an intuitive platform that effortlessly integrates with your payroll system and prioritizes security and compliance.

States like Missouri, Nevada, Arizona, Kentucky, and Hawaii have started regulating earned wage access (EWA) products and services, defining EWA services and setting guidelines for mandatory disclosures and annual reporting.

Employers and payroll providers must be aware of these regulations to avoid any potential issues. Some states have already proposed bills in early 2024 to establish licensing requirements for EWA providers.

These regulations aim to prevent predatory lending debt traps commonly associated with payday loans by requiring EWA providers to comply with consumer protections.

Missouri and Nevada were the first states to sign bills advocating for legislation and guardrails for EWA providers.

These bills were followed by Arizona, Kentucky, and Hawaii, which have also regulated earned wage access (EWA) products and services.

The proposed bills in these states aim to define EWA services, establish licensing requirements for EWA providers, and set guidelines for mandatory disclosures and annual reporting.

Employers and payroll providers should be informed of the latest state regulations regarding EWA services, as other states are likely to follow suit with varying regulations.

State regulations on EWA products are recommended to be treated as credit and require compliance with consumer protections to prevent predatory lending debt traps.

Employers and payroll providers should be aware of the varying regulations that are being implemented across different states.

The terms and conditions of an Earned Wage Access scheme are crucial to its success. Employers must consider the time it takes from requesting on-demand pay to receiving the payment.

Employers should think about how long it will take for employees to receive their on-demand pay. This can help manage expectations and ensure a smooth experience for all parties involved.

There are several factors to consider when determining the conditions of an EWA scheme. The program's cost and applicable fees should be taken into account, as well as any compliance advice related to Earned Wage Access legislation.

The program's cost and applicable fees can impact the overall experience of employees. Employers may choose to sponsor the program entirely or charge employees a small fee.

Employees should be informed about the limitations of the on-demand pay option, such as how often they can use it within one payroll cycle.

Here are some key conditions to consider when implementing an EWA scheme:

Offering Earned Wage Access can be a valuable asset for talent acquisition, with 79% of employees willing to switch to an employer who offers it.

Having a strong employer brand is crucial for attracting top talent, and offering EWA signals to prospective employees that the company is committed to supporting its workforce's financial wellness.

Employee retention is a significant concern for employers, and EWA can help reduce turnover by addressing financial stress, a key driver of turnover.

Financial stress can weigh down on employee productivity, but offering EWA can help alleviate this by providing employees with financial flexibility and allowing them to focus on work.

A study found that 89% of employees would stay longer with a company offering on-demand pay, making EWA a key factor in employee retention.

Here are some key benefits of Earned Wage Access for employers:

By offering Earned Wage Access, employers can create a more supportive work environment, leading to numerous benefits that impact the organization positively.