Pay-as-you-go: 5 considerations for evaluating whether earned-wage access can ease employee financial stress

Research indicates that financial strain can trigger employee stress, depression, anxiety, and burnout. As organizations use financial-wellness initiatives to address these issues, one tool is on the rise for its small cost to employers and the big impact it can have on employees: Earned wage access.

Also known as on-demand pay, earned-wage access lets workers access their money before payday. PayPal, Walmart, and Dominos are some of the companies using this emerging-trend,  benefit.

EWA is not a loan because employees have already earned the money. Funds aren’t distributed by the employer but by third-party vendors. In most cases, the employee pays the transfer fee, so employers see little to no cost. Service providers are mostly financial-technology companies and start-ups, and delivery can be direct to consumer or through employer contracts. Ultimately, earned-wage access can be a low-risk, high-return solution to the issue of employee financial stress. 

What should an organization consider when looking at whether to offer on-demand pay as a financial wellness tool for employees?

First, organizations with a large number of hourly workers would benefit from a needs survey.