How to Implement Daily Payroll? In short, from a payroll perspective, there is no such thing. Payroll software doesn’t support it, and as an employer, it could be a difficult thing to manage from a cash flow perspective. Nonetheless, employees want access to their pay immediately after completing a shift, particularly given innovations and changes to traditional business models brought on by the gig economy. However, you can add Earned Wage Access (EWA) as a wellness benefit, available at no cost to you as an employer through Tapcheck, and give your employees the freedom to cash out their earnings as needed prior to payday.
In today’s rapidly evolving job market, organizations are continually seeking innovative ways to attract, retain, and support their workforce. One of the latest trends gaining significant traction is Earned Wage Access (EWA). EWA gives employees the ability to access their earned wages before the traditional payday, providing paycheck flexibility and control. This comprehensive guide will delve into the benefits, challenges, and step-by-step process of implementing EWA for your organization.
The Benefits of Earned Wage Access
- Financial Wellness: Giving employees access to their earned wages when they need cash most can help alleviate stress caused by unexpected expenses and reduce reliance on high-interest loans or credit.
- Employee Attraction: Organizations that offer EWA gain a competitive edge when it comes to recruiting in this increasingly competitive job market. Forbes reports that before Walmart implemented EWA, they would send 1,000 job offers and only have around 20% of the applicants accept, after implementing EWA the job acceptance rate went up to 90%.
- Improved Productivity: By having access to EWA, employees are less distracted by financial concerns in the workplace, so they can stay focused on their job and be more productive.
- Reduced Turnover: Employees who feel financially supported are more likely to remain loyal to their employers. When employees are empowered through benefits like EWA, they tend to be happier at work and stick around longer. A Study from Mercator Advisory Group found a 63% improvement in turnover rate when implementing EWA.
- Positive Employer Branding: Organizations that prioritize employee financial well-being are perceived as caring and forward-thinking, enhancing their reputation as desirable employers.
Guide to Implementing Earned Wage Access
- Needs Assessment and Provider Selection: Start by evaluating your organization’s specific needs and goals for implementing EWA. Research and select a reputable EWA provider that aligns with your organization’s values and goals. Most importantly, look for reviews of those providers on professional websites such as G2.com. Tapcheck has received multiple badges such as Easiest to Do Business With 2023 or Best Meets Requirements 2023.
- Costs and Fees: Evaluate the costs associated with an EWA implementation, including provider fees and any potential administrative expenses. Choose a provider with fair and transparent fee structures, the most prevalent of which is free to the employer with a small per-transaction fee for the employee. At Tapcheck our services are free to the employer. Employees may be eligible for free transfers with the use of the optional Tapcheck Mastercard.
- Integration with Payroll & Time Systems: EWA providers should have direct API integration with payroll and time systems. This allows employee data to be precisely collected by the EWA provider and prevents payroll errors. Usually, those providers have a list of companies they integrate with displayed on their website. In the case of Tapcheck, we offer real-time integration with 250+ payroll and timekeeping platforms, ensuring enhanced precision with minimal administrative burden.
- Funding: Most companies favor EWA providers handling the early wage payouts to avoid disrupting their payroll process and cash flow. While some providers ask companies to set aside funds in advance for these withdrawals, the preferred approach is for the EWA provider to manage and fund these transactions, simplifying the process and reducing operational complexities. Since Tapcheck funds early withdrawals, employers stay cash flow neutral, nor do they need to change any of their current workflows. Deductions are automatically applied to employee’s checks and are then recouped through an ACH upon payday.
- EWA Balance Availability and Limits: Employees often complain about insufficient balance availability in lower-precision systems. The reason is that some providers use different accounting measures or paper-based systems to synchronize hours worked. This means that even after working multiple shifts, they either have no balance or a very low one. For example, by leveraging API integrations from various payroll and time management systems, Tapcheck provides employees with faster access to more money, reducing instances where they have a zero balance to withdraw from. While some providers offer only 50% of an employee’s estimated wages, our precise system allows us to offer 70%.
- EWA Payout Options: Many employees prefer using their personal debit cards or bank accounts for EWA transfers and direct deposits. However, some providers mandate the use of their specific pay card for access. Although such cards might allow fee-free transfers, it is paramount that employees maintain their financial autonomy. Ideally, providers should allow transactions to be sent to third-party debit cards and bank accounts rather than mandate the use of their specific card. At Tapcheck you can use your own card or use our provided Mastercard to benefit from free transfers
- Legal and Compliance Review: Every jurisdiction has its nuances regarding labor laws and financial regulations. Partnering with legal experts can prevent potential pitfalls, safeguarding against costly legal battles or reputational damage. Tapcheck is fully compliant in all 50 states and has been vetted by leading national employment law firms to ensure full compliance.
- Employee Education and Communication: Effective implementation isn’t just about the technology; it is about ensuring every stakeholder understands its value. Develop a comprehensive communication plan to educate your employees about the EWA program. Clearly explain how the program works, its benefits, and any associated fees. Address frequent questions and concerns to build employee confidence. Tapcheck provides employers with various collateral that can be forwarded to employees allowing for increased awareness and making adoption easier.
- Pilot Testing: Before a full-scale rollout, conduct a pilot test with a small group of employees. This helps identify any potential issues and allows you to refine the implementation process based on real-world feedback. Tapcheck follows those best practices by starting an EWA implementation with a subset of your workforce to mitigate risk and allow your team to get first-hand experience with our platform before a large-scale rollout.
- Continuous Support and Optimization: EWA implementation is an ongoing process. Ensure that your EWA provider offers continuous technical support, training resources, and updates to enhance the experience for both employers and employees. Tapcheck provides continuous support, ensuring that employers and employees have a seamless experience.
Measuring Success
Measuring the impact of financial wellness programs post-launch requires a pre-established baseline for effective comparison. Start by assessing employee morale towards financial stress and work satisfaction using pre- and post-implementation surveys. Here’s how organizations can strategically measure and compare the impact of their wellness programs:
Employee Morale
- Assess the sentiment of employees regarding financial stress and their satisfaction at work by sending out surveys both prior to and following the program’s launch.
- Before and after implementing earned wage access, look at employee data such as absenteeism, late arrivals, or early departures.in
- Monitor productivity levels.
The comparison of these data points pre and post-implementation can offer insights into evolving employee well-being.
Staff Retention
Track turnover rates for recent hires (those with the company for under 30 days) and the average tenure of employees who have been with the company longer than a month. After integrating the financial wellness program, contrast these figures with the initial metrics to understand its impact on employee loyalty and longevity.
Recruitment Metrics
- Scrutinize the average costs associated with hiring each candidate,
- Compare the average applicants you get for open jobs.
- Consider the average duration— from the initial interview to the final hiring decision
Conclusion
Implementing Earned Wage Access is a strategic move that benefits both employees and organizations. By providing financial flexibility and empowerment, organizations can improve employee satisfaction, retention, and productivity.
However, successful implementation requires careful planning, collaboration with legal experts, effective communication, and a reliable EWA provider. Through a well-executed implementation process, organizations can position themselves as forward-thinking employers that prioritize their workforce’s financial well-being.
As the landscape of employee benefits evolves, EWA solutions with the kind of precision and support offered by Tapcheck, stand out as a game-changing benefit that transforms the traditional payroll paradigm.
For more information on evaluating financial programs with EWA, reach out to Sean Dougherty, sean.dougherty@tapcheck.com, 747-223-6747 or visit https://tapcheck.com/get-a-demo/
