If you're among the many employers who are looking for new ways to stand out in an increasingly difficult employment market, you’ve probably heard that raising wages alone isn't enough to compete for hourly workers. And perhaps you’ve considered – or at least heard about – the ability to pay workers a portion of their wages faster than the traditional payroll cycle of every two weeks.
Known as earned wage access, on-demand pay, or early pay, among other terms, the benefit is in high-demand among workers, especially hourly workers, many of whom see huge advantages to the flexibility of accessing wages sooner than biweekly.
In fact, four in five workers (79%) would be willing to switch jobs for earned wage access; and faster access to wages can help reduce financial circumstances that disrupt job engagement and performance.
But what does offering earned wage access entail for the employer and their hardworking payroll or benefits teams? How does this payment method fit into your existing payroll systems and processes, and who does what?
To help you work through it all, we’ve answered common employer questions, so you have what you need to know about offering earned wage access.
- When Netspend advances the funds when is Netspend paid back?
With Netspend, you reimburse us on your company’s scheduled payday. You will get an invoice on your payroll processing day for your accounting team’s reference, or you can set up auto-ACH withdrawals. It shouldn’t feel any different from paying your employees their full paychecks.
- What options are available for employees who want to transfer their funds?
With Netspend Earned Wage Access, workers are in control when it comes to speed and cost. They can choose an expedited transfer (which usually arrives within minutes) to a payroll card, deposit account, or bank account (fees vary, depending on the account type). Alternatively, workers can have funds transferred via ACH to an account at no cost. This method typically takes 2-5 business days
- How does access to earned wages support the financial health of my employees?
Workers know that earlier access to their earned wages can be the difference between paying a bill on time or missing a payment. The ability to bridge gaps in cash flow can be essential when it comes to building financial stability.
Additionally, when wages are delayed or a payment is missed, it can set off a domino effect of damage to a worker’s overall financial situation. This includes extra fees and time spent, which leads to more stress, distraction, and missed work.
Research shows that employees who are more financially stable see increased productivity, decreased turnover, and better job performance. Earned wage access can help increase employee engagement and positively impact employee productivity and health. In fact, 95% of employees are interested in working for an employer who provides earned wage access.
Earned wage access will give your workforce more peace of mind when it comes to having access to money they’ve already earned at times when they need it most.
- How long does Netspend Earned Wage Access take to implement?
Companies can often go from signup to sending earned wages in around 30 days. Check out our fast and easy set-up process.
- What changes will there be to my payroll process?
Prior to payday, a file will be provided to you with all earned wage access transactions for that period. You’ll then deduct those amounts from the employee’s paycheck. For most payroll systems, all you have to do is upload this file when you process your payroll. On the scheduled payday, you will be invoices for the total amount in the deduction file. You can process this through your accounting team or it can be debited form an account you designate (via ACH transfer).
1. Visa, “Earned Wage Access”, 2019
2. Netspend, “The Restaurant Recovery: Three Pandemic Trends-Turned-Opportunities”, April 2021 Page 4
3. Visa, “Earned Wage Access”, 2019
4. Visa, “Earned Wage Access”, 2019