Budgets across the country are stretching thinner and thinner, especially in areas with high costs of living. Reports by LendingClub put the portion of consumers who live paycheck-to-paycheck at just over 60% as of August 2023, and 19% say they struggle to pay bills on time. 76% of low-income workers live paycheck-to-paycheck, and according to a March 2023 CNBC Your Money Financial Confidence Survey, 70% of American workers in total are stressed about their finances.
When employees are financially unwell, productivity, engagement, and retention all suffer—and so does your business. Providing benefits that can help your employees alleviate their households’ financial concerns decreases employee stress and raises morale, improves your business’s productivity, reduces turnover in your workplace, and makes your business more attractive amid fierce competition for talent.
One such benefit is Earned Wage Access—a tool to help your employees alleviate the stress of their finances and get their expenses taken care of on time. Earned Wage Access takes the financial stress out of work, so your team can focus on what matters most.
What is Earned Wage Access?
Earned Wage Access (EWA), also called On-Demand Pay, is providing a new benefit option to employees. Employees are no longer bound by traditional pay periods. With EWA, employees are able to access a percentage of the wages they’ve already earned whenever they want.
Every hour your employees work is money they earn, but usually, they can’t access any of that money until the end of their pay period. However, bills and payday don’t always align, and unexpected emergency costs aren’t always courteous enough to only rear their ugly heads when employees get their paychecks.
Earned Wage Access programs enable employees to dip into their already-earned wages before their paycheck arrives to cover expenses on a tight budget, providing financial flexibility that reduces stress and helps them budget more effectively to avoid late fees or overdraft charges.
How does Earned Wage Access work?
Earned Wage Access makes employee financial health simple for both employees and employers. Using a secure platform such as ZayZoon, a leading provider of Earned Wage Access services, employees request an advance on earned wages to cover expenses. The money advanced is automatically deducted from the employee’s next paycheck.
Earned Wage Access platforms fund earned wage requests and handle employee support with no financial liability or additional overhead for the employer, dramatically reducing risk and administrative burden.
Without an Earned Wage Access program, employees in a tight financial spot must turn to employer-sponsored loans or pay advances to cover expenses, and these methods of providing financial flexibility often are difficult to administrate and open the employer up to potential financial risks, in addition to potentially harming morale.
The Importance of Encouraging Employee Financial Wellness
As rising costs of housing, food, and child care leave low-income and high-earning households alike stretched thin, employers have a golden opportunity to offer benefits to their employees that help their paychecks go further and alleviate financial stress.
Improving Employee Health and Productivity
Financial stress can lead to reduced job satisfaction, increased turnover, and health issues such as anxiety and depression that can cause your employees’ productivity and work quality to suffer. Earned Wage Access doesn’t just make it easier to make ends meet—it also makes your valued employees feel supported by their workplace and more satisfied with their work, encouraging them to stay with your business rather than start job hunting.
Using an Earned Wage Access program can lead to up to 89% of your employees reporting less stress and a 29% reduction in employee turnover!
Attracting and Retaining Top Talent
Like many other elements of benefits packages, financial wellness programs like Earned Wage Access also help you remain competitive in the labor market. Today, prospective employees look at the benefits companies offer as key attractions, and offering financial wellness programs like Earned Wage Access makes a compelling case for them to apply to your open job positions or take your job offer instead of a competitor’s!
With 79% of employees reporting being willing to switch to a company that offers Earned Wage Access, these programs safeguard your business against other businesses poaching your employees.
Win the war for talent with a platform that measurably improves your employee’s financial well-being. By reducing financial stress in the workplace, Earned Wage Access makes employees happier, more productive, and likelier to stick around.
Empower Your Employees with California Payroll and ZayZoon
Users of our payroll solutions can make use of Earned Wage Access at no additional cost through our integration with ZayZoon. ZayZoon offers secure data exchange, funds all employee wage requests with zero employer liability, and takes the entire administrative burden of an Earned Wage Access plan off your shoulders.
California and ZayZoon working together is truly a win-win for everybody. Our ZayZoon integration can help your employees do their best work free of stress over bills or emergency expenses while your business stays competitive in the tight labor market.
Do you have questions about integrating ZayZoon Earned Wage Access with your existing California Payroll solutions, or are you interested in finding out more about the benefits our payroll software, services, and products can offer your business? Contact us online or call (925) 240-2400 to speak to a payroll specialist and get answers to your questions, or request a demo of our payroll solutions and see firsthand what we can do for your business.
FAQs
What is Earned Wage Access and how does it benefit employees?
Earned Wage Access, also known as On-Demand Pay, is a benefit option that allows employees to access a percentage of their already-earned wages whenever they need it, rather than waiting for the end of the pay period. This helps employees alleviate financial stress and cover expenses on a tight budget. It provides them with financial flexibility, reduces stress, and helps them avoid late fees or overdraft charges.
How does Earned Wage Access work for employees and employers?
Employees can request an advance on their earned wages through a secure platform, such as ZayZoon. The requested amount is deducted from their next paycheck automatically. Earned Wage Access platforms fund these requests and handle employee support, relieving the employer of any financial liability or additional administrative burden. This reduces risk and makes it easier for employers to offer this benefit to their employees.
What are the benefits of encouraging employee financial wellness?
Encouraging employee financial wellness has several benefits for both employees and employers. Financial stress can negatively impact job satisfaction, productivity, and retention. By offering benefits like Earned Wage Access, employers can support their employees’ financial health, increase job satisfaction, reduce turnover, and improve overall productivity. It also helps attract and retain top talent, as prospective employees see these programs as valuable additions to their benefits package.
How does Earned Wage Access help employers remain competitive in the labor market?
In today’s labor market, offering financial wellness programs like Earned Wage Access can give employers a competitive edge. Prospective employees consider benefits packages when making job decisions, and the availability of programs that improve financial well-being can be a compelling factor. By offering Earned Wage Access, employers can attract and retain top talent, safeguarding their business against competitors who may try to poach their employees.
