Play Audio
Earned Wage Access: Revolutionize Your Payroll

Earned Wage Access: Transforming the Way We Think About Paydays

By Jo McClure, CPP on Feb 01, 2024
7 min read 0 comment(s)

Share this:

earned-wage-access-EWA (1)

We're excited to announce a game-changing benefit for our clients and their employees! Axcet has partnered with ZayZoon to introduce earned wage access (EWA), a revolutionary service that allows employees to access their earned wages before payday. This groundbreaking collaboration promises to provide financial flexibility and peace of mind to countless workers. 

Through this partnership, Axcet demonstrates its continued commitment to employee welfare and financial well-being, ensuring that the hard-earned money is available when it's most needed.

Stay tuned as we take a deeper look into how this innovative service can transform your employees' financial planning and provide immediate relief in times of need.

key benefits of outsourcing your businesses payroll kansas city peo

How Many Americans Live Paycheck to Paycheck?

In today's fast-paced world, financial challenges are a reality for many employees. It's a significant concern, with two in five employees living paycheck to paycheck and facing the stress of financial planning. This stress often extends into the workplace, where worrying about personal finances can impact professional performance. In fact, a staggering 84% of individuals surveyed indicated they worry about finances while at work

What Is Earned Wage Access?

Earned wage access offers a modern solution to employee financial challenges. It reimagines the traditional payroll system by providing employees with the flexibility to access a portion of their earned wages on demand, rather than waiting for the standard pay cycle. This approach can be particularly beneficial for those facing unexpected expenses or short-term financial shortfalls.

EWA can be seen as a form of interest-free wage advance. It's increasingly being recognized as a valuable addition to employee benefits packages, helping to alleviate short-term financial pressures. Implementing earned wage access demonstrates a commitment to supporting employees' financial well-being, which can translate into enhanced workplace productivity and satisfaction.

Jorge Giraldo, CEO of Senior Helpers in Polk County, highlights the growing importance of EWA: "It seems like EWA is just that one benefit that should be standard across the board. Everyone should be offering it, so that employees, whether they're mine or someone else's, can have access to their funds."

RELATED: Top 3 Security Measures That Ensure Your Payroll Partner Treats Your Data Like It's Their Own >>

Employer Benefits of Offering Earned Wage Access

  • Enhancing employee motivation & financial well-being

Financial concerns can significantly distract employees from their work. Earned wage access offers a practical solution by providing employees with the option to access a portion of their wages before the scheduled payday.

This flexibility can be crucial in managing unforeseen expenses and avoiding high-interest loans. The impact of EWA on employee well-being is noteworthy:

    • 77% of employees using EWA report reduced financial stress
    • 79% of candidates would switch to an employer offering EWA
  • Reducing employee turnover

Employers offering earned wage access often see a notable increase in job applicants, sometimes doubling the usual rate. Additionally, 80% of employees express a preference for working with employers who provide EWA.

This benefit can foster a sense of support and empowerment among employees, potentially leading to higher retention rates.

For example, a McDonald's franchise owner observed a 57% improvement in employee retention over 15 months after implementing EWA.

  • Improved recruiting

    Employers who provide on-demand access to earned wages experience up to 2x more job applicants.

  • Lowering hiring & operational costs

Introducing EWA can lead to significant cost savings for businesses. Companies that offer loan programs to employees have reported savings of up to $8,000 per year by switching to earned wage access.

Additionally, a reduction in hiring costs by about 5% has been observed, translating to an average saving of around $19,000 per year for a company with 200 full-time employees.

  • Streamlining financial assistance for employees

Traditionally, employees facing financial difficulties might request pay advances from their employers, a process that can be time-consuming and costly for the company. EWA offers a discreet and efficient alternative, allowing employees to access their earnings on demand without the need to involve their employer directly.

This autonomy not only reduces the administrative burden on the company but also spares employees the discomfort of having to explain their financial needs.

  • Transitioning from paper checks to digital payments

The move away from paper checks in favor of digital payments is becoming increasingly prevalent due to cost-effectiveness and convenience. Digital payments are significantly cheaper than paper checks – often by a factor of ten.

One method HR professionals are using to encourage this transition is the introduction of earned wage access. EWA not only incentivizes employees to switch to digital payments but also offers them the flexibility to receive their pay in a way that suits their needs.

This approach is particularly effective in encouraging employees who already have bank accounts to opt for direct deposit. As previously mentioned, implementing EWA typically involves no direct costs to employers.

However, it's important to note that there may be fees for employees, usually capped at a maximum of $5 per transaction, which is comparable to the cost of using an ATM.

Despite this, there are some free options available through EWA services, enhancing its appeal and flexibility.

  • Flexible & fee-free payout options

Several innovative payout options are available under EWA, providing employees with more control over their finances:

    • Budgeting tools

      Resources like paycheck budgeting guides can help employees plan their finances more effectively, especially during high-expenditure periods like holidays.
    • Access to earned wages 

      EWA allows employees to access their earnings instantly, reducing the need to rely on credit for urgent expenses.
    • Instant gift cards 

      EWA partnerships with major retailers (such as Amazon, Instacart, and Walmart) offer the option to receive pay through Instant Gift Cards, often with significant savings of 25%.
    • Gas card 

      A Gas Card program can provide additional value, offering a 5% bonus on fuel purchases and turning each refill into an opportunity for savings.
    • Venmo integration

      For those who frequently use Venmo, EWA can facilitate direct deposits to Venmo accounts, providing a hassle-free way to manage shared expenses, especially during gift-giving seasons.

peo outsourced payroll processing

The Benefits of Earned Wage Access (EWA) for Employees

EWA offers a significant benefit to employees by providing them with more control over their finances. One of the key advantages is the ability to access wages before the regular payday, which can be particularly helpful in managing unexpected expenses. This flexibility reduces the need for employees to rely on high-interest loans or face overdraft fees.

To understand the real-world impact of EWA, let's look at some data. Analysis shows that employees using ZayZoon's EWA service could save up to $727 annually. This figure highlights the potential of EWA to alleviate financial burdens.

Further emphasizing the effectiveness of EWA, a comprehensive survey involving over 5,000 employees who utilize ZayZoon revealed that:

  • 89% of these workers reported experiencing less financial stress as a result of using EWA.

These findings suggest that EWA programs not only provide immediate financial benefits but also contribute to overall employee well-being by reducing stress related to financial concerns.

RELATED: Unique Employee Benefits - The New Norm for Attracting Top Talent? >>

Enhancing Financial Wellness & Education

Through Axcet, employees using ZayZoon's earned wage access services benefit beyond immediate financial relief. It is part of a comprehensive employee financial empowerment platform, which encompasses a range of financial literacy and wellness tools.

These resources are designed to support employees in building a more secure financial future:

  • Financial education resources 

    Employees have access to user-friendly tools for budgeting, evaluating home affordability, and analyzing retirement plans, helping them make informed financial decisions.

  • Smart financial insights 

    The platform offers personalized insights based on individual income, spending habits and expenses, aiding employees in better managing their finances.

  • Customized alerts 

    To further assist in financial management, employees can set up alerts that notify them of potential minimum balance or overdraft fees, helping them avoid unnecessary charges.

These tools collectively aim to enhance employees' financial literacy and wellness, contributing to their overall financial health and stability.

RELATED: Should You Switch Employees from Salary to Hourly Pay? >>

Get Started with Axcet's Innovative HR Solutions Today

Are you a business owner looking to enhance your HR services and support your employees' financial well-being? Reach out to an Axcet representative today to learn more about how earned wage access can benefit your organization.

As Kansas City's premier professional employer organization (PEO), Axcet is committed to revolutionizing HR services for small businesses. We're here to help you navigate the complexities of employee benefits and financial wellness solutions. Contact Axcet to discover how our innovative services can empower your business and your workforce.

PEO Payroll Services

Written by Jo McClure, CPP

Get HR Updates

Table of Contents

Eradicating Workplace Harassment with a Strong Zero Tolerance Policy

zero tolerance policy
attendance at work

Boosting Attendance at Work: Innovative Strategies for Employers

Let us know what you think...