Early Wage Access, Instant Pay or On-Demand Pay is the ability for an employee to access his/ her wages before the actual pay day. EWA should not be mistaken for a loan or an advance on salary. EWA enables employees to access a part of their earned salary instead of waiting for the next paycheck.
While EWA sounds like an attractive solution when faced with a financial emergency in the middle of the month, it is important to understand its benefits.
Benefits for Employees
- Increased Financial Wellness- EWA gives employees greater control over their finances. It provides them the freedom to manage their finances more effectively. With increased cost of living, more and more people are living paycheck to paycheck month on month. It is estimated that approximately 80% of working people run out of their salary before the end of the month. With EWA, employees can choose how much of their accrued wages they want to withdraw and thereby have a higher degree of control which helps them in building a plan of action with respect to their monthly financial obligations.
- More Money For Unexpected Emergencies- Having access to EWA can help employees in times of an emergency like a medical crisis or a costly repair etc. With the option of EWA employees can close the gap between their paychecks and immediately get access to funds they need to navigate their emergency. In times of an unexpected crisis, this provides the employee with a monetary cushion giving them peace of mind.
- Reduced Debt And An Improved Credit Score- With EWA, employees can access their own wages if required in the middle of the month, instead of relying on loan sharks or pawning off their possessions. They also save money on fees that are associated with traditional credit instruments like late payment fees or interest charged on loans or credit cards.
Benefits for Employers
- Enhanced Employee Productivity and Well-Being- Financial stress can impact an individual’s over all well-being and stress levels. This results in lower focus and productivity at the work place. EWA helps resolve this issue by helping the individual have more control on their finances and bridge over the time between one pay check to another in case of a financial requirement.
- Attracting and Retaining Talent– In a competitive job market, hiring and being able to retain talent is a challenge. In the race to attract better talent companies must differentiate themselves by the benefits they offer. By offering EWA as an employee benefit, an organization demonstrates its commitment to the employee’s financial wellness and overall wellbeing. Companies can retain talent as employees are more likely to stay in an organization that cares for their financial well-being.
- Boost to Organization’s Reputation- Organizations that prioritize employee welfare and offer benefits such as EWA enhance their reputation and brand image. These organizations position themselves as socially responsible that genuinely care about their employees. This creates a positive brand image for the organization.
Early Wage Access is fast becoming a trend across various industries. It is a game- changing approach to improve payroll. EWA can be a useful tool in helping build financial wellness and over all wellbeing.
How can EWA help your employees? To learn more about EWA log on to MyShubhLife.