Nearly every business these days is actively looking for additional employees.  As a result, HR Managers are looking at every possible method to retain current employees and recruit new ones.  Recent surveys note retention is the number one reason employers consider offering Earned Wage Access.

According to a Harris Poll, 83% of U.S. workers believe they should have access to their earned wages at the end of each workday or shift.  The survey also revealed that 80% of workers would prefer to have their pay direct deposited into their bank accounts the day they earn it.  In addition, 78% said on-demand pay would increase loyalty to an employer.

What is Earned Wage Access? 

Earned Wage Access is a benefit that allows employees to access a portion of their wages as they earn them rather than waiting until the end of the pay period.  Advances are reconciled from funds in their next paycheck.  This access helps employees survive financial hardships, especially when emergencies arise.  With this on-demand access, employees avoid overdraft fees or high-interest payday loans. 

Technology Makes Earned Wage Access Possible

Advances in technology are accelerating the move to Earned Wage Access options.  This access is most beneficial to workers paid hourly and appeals most to retail, gig services, healthcare workers, and other verticals with high turnover rates.

While many payroll departments would like to offer employees immediate access to earned wages, doing it themselves can be burdensome.  Offering Earned Wage Access may be difficult for some because of the complexity of their payroll systems and compliance.  For example, they must consider taxes and deductions for benefits, such as medical insurance.  In addition, the technology many employers use to distribute paychecks may not yet facilitate Earned Wage Access.

Fortunately, a proper time and attendance system, integrated into their current payroll processes, can provide the technology necessary to make this benefit available, even with these limitations.  In addition, using these systems reduces or eliminates the burden on the payroll department. 

Why is this important to Employees?

For some employees, not having cash on hand to pay child care prevents them from accepting an overtime shift where they could earn even more wages.  Others are one flat tire away from losing their job because they cannot afford to fix it immediately. 

In this same Harris poll, more than 45% of employees had a higher financial stress level since the start of the pandemic in the spring of 2020.  In addition, a Federal Reserve study found over 40% of adults would not be able to cover an emergency expense of $400 if one arose.

87% of employees with a household income of less than $50,000/year wish they could have early access to their earned wages.  This percentage is high even for households earning more than $50,000, with 67% likely to request an advance of earned wages if available.

Why is Earned Wage Access a recruiting advantage?

Just 6% of employees have an employer who offers EWA today, but 43% would choose to be paid on-demand instead of a scheduled payday if they had the option.  So having Earned Wage Access makes you an Employer of Choice where prospects want to work for you.

More than half of employees (57%) say they would work harder and stay longer at a company that offers Earned Wage Access, with no significant difference between hourly (58%) and salary (56%) employees.

Providing such a service allows companies to demonstrate their empathy for workers who find themselves struggling at the end of a pay period.  Earned Wage Access is a way to provide a safety net to employees.

New employees often have a greater need for immediate access to funds.  Depending on when an employee is hired in the payroll cycle, they may still have to wait up to three weeks before receiving their first paycheck.  By giving them access to their earned wages, they can get paid on their first day of work.  If they need a uniform or special work shoes, they can access their earnings immediately to make those things happen.  The employee starts on a positive note.

How can we help?

Pay on Demand is an Earned Wage Access solution fully integrated with Time Equipment Company’s workforce management system and is included in your monthly license.  Learn ways to help your organization by offering Pay on Demand at no additional cost to your employees or company.  For more information, contact Time Equipment Company at or 800-997-8463.