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Our expectations have shifted dramatically in the smartphone era. We’ve come to value—and even demand—more speed, flexibility, and control, all on the go. This shift is one major reason why earned wage access (EWA) has quickly gone from a rare to a standard workplace benefit. EWA gives employees the flexibility to access their earned wages before payday—typically instantly through a mobile app—giving them more financial control.
But how does EWA work for employers? Read on to learn what earned wage access is, why more businesses are including it as an employee benefit, how to determine if your business should offer it, and more.
Jump to:
- Why is earned wage access important?
- How does earned wage access work?
- Types of earned wage access solutions
- Benefits of earned wage access
- Potential drawbacks of EWA
- What to look for in an earned wage access provider
- Understanding earned wage access apps
- Earned wage access laws in the U.S.
- How to implement earned wage access
- Tapcheck: Simplifying EWA for employers and employees
- Frequently asked questions about earned wage access
What is earned wage access?
Earned wage access is a financial service that lets employees access their earned wages before payday. No longer do your workers have to wait for the traditional weekly or biweekly payroll cycle. Instead, they can withdraw funds as needed, so long as they’ve put in the hours at work.
Also known as on-demand pay or daily pay, EWA typically integrates with employer payroll and time-keeping systems. This way, earnings can be automatically calculated and delivered to employees on demand without requiring you or members of your team to manually get involved in another employee’s financial matters.
Why is earned wage access important?
Unexpected expenses are a fact of life. After all, medical emergencies and car breakdowns rarely wait for payday. For a growing number of employees, the flexibility that earned wage access provides is necessary considering today’s economic challenges, such as:
- Evolving workplace expectations: Employee financial well-being has become an important priority for employers. More workers expect financial well-being benefits from their employers, and more employers routinely provide such benefits.
- Rising financial stress: More than three-quarters (78%) of Americans live paycheck to paycheck, without adequate savings to fall back on.
- Continuing inflation challenges: Inflation has cooled in recent months, but many Americans still report it’s become tougher to make ends meet. As an employer, you too have probably seen costs rise for everything from supplies to utilities.
- High turnover and disengagement rates: Employees living paycheck to paycheck are less engaged and productive, losing an average of 1.8 days a year due to presenteeism — and twice as likely suffer from burnout, depression, anxiety, or loneliness.
By letting employees access their earnings on their schedule—not just on payday—EWA offers financial flexibility and peace of mind. For employers, EWA is a benefit that not only benefits employee well-being but also supports workforce stability in a competitive job market.
How does earned wage access work?
Typically, earned wage access works via an integration with an employer’s payroll and timekeeping systems. Here’s a look at the process:
- Repayment on payday: The payroll advance is automatically deducted from the employee’s next paycheck.
- Payroll integration: The EWA service and employer's payroll and/or time-tracking systems are linked up, so earned wages can be calculated on demand.
- Employee access: If and when employees need to access their earned wages in advance of payday, they can use a mobile app or platform to withdraw that money.
- Instant pay: Once the withdrawal request is made, the funds are sent to the employee’s preferred account or card, often immediately or within minutes.
Types of earned wage access solutions
Choosing the right earned wage access solution for your business first requires understanding the different options available—then seeing how they align with your goals. Let’s look at the three main types of EWA solutions to help you determine what’s best for your organization and workforce.
Employer-sponsored
Employer-sponsored EWA solutions are offered directly through the employer as a workplace benefit. These programs integrate directly with the company’s payroll and time-keeping systems, making setup and maintenance simpler for employers—and tend to work more easily for employees too. Without going through extra steps or the hassle of creating outside accounts, employees can just tap into their company’s early wage access program.
Using EWA often comes at a low cost, such as a small ATM-like fee when they use the service. Employer costs depend on the EWA provider, but many programs come at low cost. Despite that, the benefits can be significant. Employees get more financial flexibility, while employers improve employee retention and satisfaction.
Third party
Offered by external providers, third-party EWA solutions don’t require direct sponsorship from an employer. That said, employers can still play a role by partnering with the provider to ensure smooth integration with payroll systems or by recommending the service as an optional benefit. Employees typically sign up on their own, linking the service to time-tracking systems or pay stubs to calculate their earned wages. Should they choose to enroll, employees can then access their pay on demand before payday, usually for a transaction fee or a subscription cost.
For businesses that want to take a more hands-off approach to EWA—or would like to offer employees financial support without directly managing a program—third-party EWA can be a practical option. These services do operate independently, however, which means employers have less control over the terms. The associated costs, which are typically passed on to employees, tend to be higher than those for employer-sponsored solutions.
Direct-to-consumer
A direct-to-consumer EWA solution lets employees access their earned wages without involving their employer. To use these paycheck advance apps, employees link their bank account or daily payroll data to the provider’s platform, which calculates how much pay they’ve earned so far. Once set up, employees can withdraw funds before payday, usually by paying a transaction fee or subscription cost. Unlike employer-sponsored or third-party EWA options, these services operate independently of company payroll systems.
For employees, direct-to-consumer apps can mean flexibility and control over their finances that doesn’t require any sort of approval or help from their employer. But this does mean employees have to be more proactive about seeking out, qualifying for, and using an EWA service. Many direct-to-consumer apps come with requirements—such as having an active checking account or keeping a minimum balance—and higher fees. For employers, there’s no involvement required—but offering a workplace EWA program could provide more value by improving employee retention.
Benefits of earned wage access
EWA benefits for employers
For today’s employers, earned wage access stands out as a benefit that doesn’t just address employee financial needs but creates positive ripple effects across the workplace, such as:
- Better retention: Companies that offer EWA often see significant drops in turnover: 89% of employees who use Tapcheck’s EWA service, for example, say they feel more loyal to their employer for offering early pay.
- Increased productivity: Financial stress can affect how employees show up at work. EWA helps relieve that burden, with some businesses reporting as much as a 74% reduction in absenteeism after adopting on-demand payroll.
- Easier recruitment: It’s a tough hiring market out there, and employers often have to compete for talent. Offering EWA shows potential hires that you’re serious about supporting their needs. In fact, 51% of employers that offer Tapcheck say the solution helps fill open jobs faster.
Since EWA programs often come at little to no cost for employers, it can be a very practical and cost-effective way to invest in your team’s well-being.
EWA benefits for employees
Many EWA services come with app-based platforms that make it easy for employees to access their earned wages. The benefits these tools provide include:
- Instant access to earnings: The flexibility of same-day pay is what employees typically find most enticing about EWA programs. They can access their money when they need it without resorting to looking for payday loans online.
- Relief from financial stress: Unexpected expenses can happen to anyone, but EWA serves as a safety net. Employees get the flexibility and control to access their wages even before payday—and stay financially secure.
- Debt avoidance: With early pay access to their earned wages, employees are in a better position to steer clear of high-interest loans or costly overdraft fees.
On top of financial benefits, EWA supports employee mental health by reducing worry about money and fostering a higher sense of financial security.
Potential drawbacks of EWA
The biggest challenges employers come across with EWA programs usually has to do with the provider chosen for the program. The wrong earned wage access solution can lead to headaches like payroll errors and extra administrative work for employers. Partner with a provider that integrates smoothly with your systems to avoid spending unnecessary time and energy trying to get a bad solution to function.
For employees, the biggest concerns about EWA programs often have to do with financial habits. While EWA is in general far more affordable than payday loans, unnecessary and frequent use of the service for non-essential purchases can create a cycle of dependency. This is where financial education becomes key—helping employees plan better and make smart financial choices. The best EWA providers offer built-in education tools that empower employees to use the service wisely and improve their overall financial wellness.
What to look for in an earned wage access provider
Choosing the right earned wage access partner means finding a solution that works seamlessly for your specific business and genuinely benefits your unique employees. Here are the qualities that ensure your EWA program delivers maximum value with minimal hassle.
Ease of integration
Pick an EWA partner that integrates smoothly with your existing payroll and time-tracking systems. The ease of integration will depend on the platforms your provider supports and how well they connect. Since the success of EWA relies on accurate, real-time data, picking the right partner will save you time and help keep things running without disruptions to your day-to-day operations.
Cost and pricing transparency
Choose a partner with clear, upfront pricing. Some EWA programs come at no cost to employers. For employees, transparent pricing helps build trust and prevent confusion or frustration.
Reporting and analytics tools
Tools that help you track how employees are using the service can give you insights into the overall impact of EWA on your workforce. Look for a solution that lets you easily see the program’s effects on employee retention and productivity.
Support and reliability
Look for a partner who can be your right hand through the onboarding process. In addition to seamless tech integration, your provider should equip you with helpful materials to communicate the benefits of EWA to your employees. The best partners also assist employees directly with onboarding and troubleshooting, so you and your team don’t have to take on that intermediary role.
Employee ease of use and empowerment
Pick a solution that provides your employees with an intuitive platform—including a well-designed app—that’s easy to navigate. A great EWA partner should also offer your employees sound financial education so employees make smarter money decisions and build better financial habits for long-term stability and success.
Industry experience
Ensure the provider has experience working with companies of your size and can scale their solution to meet your specific needs. A provider with a proven track record will offer easier integration and better support for your workforce.
Compliance and data security
Select a partner who stays on top of labor laws and regulations and safeguards sensitive employee and payroll data with stringent security measures.
Understanding earned wage access apps
Earned wage access apps are mobile or web-based platforms that let employees access their earned wages before payday. Designed for convenience, EWA apps allow users to view their available earnings, request funds, and manage transactions—all from their smartphone or computer.
EWA apps often come with smart alerts and notifications that keep users informed about their earnings. The best EWA apps also offer their users sound financial education, with features like budgeting tools and savings goals tracking to help employees build smarter money habits. By combining convenience, financial tools, and secure technology, today’s EWA apps are transforming how employees interact with their earnings.
Earned wage access laws in the U.S.
In the U.S., earned wage access rules are going through a shift. At the federal level, the Consumer Financial Protection Bureau (CFPB) is considering a proposed rule from July 2024; if approved, EWA providers would need to follow lending regulations. Right now, the CFPB is reviewing feedback from the public before making a final decision.
In addition, seven states have passed laws to regulate EWA services. In Kansas, Missouri, Nevada, South Carolina, and Wisconsin, these laws classify EWA as its own type of financial product—not a loan—and require providers to register with state financial regulators, follow specific rules, and clearly explain any fees to users.
Connecticut takes a somewhat different approach, capping EWA fees to protect workers and requiring employers to get written consent for payroll deductions. If EWA fees push the APR above 12%, the services are considered small loans, requiring providers to be licensed as finance lenders.
California is the latest state to pass EWA regulations. Set to go into effect on February 15, 2025, these rules classify EWA services as loans. EWA providers have to register with the California Department of Financial Protection and Innovation (DFPI) and follow certain consumer protection standards.
Additional states, including Arizona, Hawaii, and Kentucky, are currently taking a close look at EWA and considering related laws. Because regulations are changing so quickly, employers should be especially careful about choosing EWA providers that stay on top of the shifts and prioritize compliance and transparency.
How to implement earned wage access
1. Choose the right EWA provider
Pick an EWA provider that matches your company’s needs. The list of criteria from the "What to Look for in an Earned Wage Access Provider" section should be a big help here.
2. Integrate with payroll systems
Work with your EWA provider to connect the service with your payroll and time-keeping systems. This will allow for real-time wage tracking and automatic deductions from employee paychecks.
3. Launch the service
Once everything is set up, it’s time to roll out the service. Many EWA providers offer onboarding materials to help you communicate the new benefit to employees and encourage them to make use of it. The more employees who participate in the EWA program, the greater the positive impact you're likely to see as an employer—from improved retention and productivity to enhanced employee satisfaction.
4. Monitor and adjust
Keep an eye on how employees are using the service, using the EWA solution’s reporting and analytics tools. Make adjustments if needed—even switching providers if the current one isn’t meeting your or your employees’ expectations.
Tapcheck: Simplifying EWA for employers and employees
To maximize the benefits of earned wage access, you need to partner with the right provider. With connections to over 250 payroll and timekeeping systems, Tapcheck for employers is easy to set up and integrate. It’s convenient for your employees too. Our precision algorithm gives employees access to up to 70% of their earned wages when they need them while safeguarding your payroll from risks and overpayments. Every EWA withdrawal is clearly itemized on employees' paystubs for clarity and full transparency. Plus, built-in financial education tools help employees take control of their money.
If you’re ready to bring EWA to your workforce—or make the switch to a solution that truly works—Tapcheck is here to help. Request a demo to learn more about how we can boost employee satisfaction and streamline your payroll.
