In this guide, we will explore the details of Earned Wage Access (EWA) and discover how offering EWA to employees can improve small businesses and their employees.
What is Earned Wage Access?
Known officially by the UK government as Employer Salary Access Scheme (ESAS), Earned Wage Access (EWA) is a payroll scheme which allows employees to gain access to their wages as they earn them rather than having to wait until their designated payday.
How does Earned Wage Access work?
Earned Wage Access, also known as salary advance and on-demand pay works by employers signing up to an EWA provider which will then link through to the employers existing payroll system.
Then, the employee will be able to log in to an account via an app from the provider which will allow employees to withdraw their earned wages before their designated payday.
What are the benefits of Earned Wage Access?
Convenience for Employees:
Being able to access your wages at the end of every shift is a massive benefit for employees as it is so convenient. The employee could finish their shift at the end of the day and withdraw what they had earned from the hours they had just worked and put it towards the food shopping on the way home instead of having to worry if the wages they have left from the previous payday will cover what they need or want.
Improved financial health:
With on-demand pay, employees can improve their financial health as EWA enables them to have a better understanding of their income and allows employees to plan their finances more effectively. Earned Wage Access enables employees to see how much they earn on a daily basis and decide whether to keep the money where it is or access it straight away.
With the cost-of-living crisis still prevalent, employees being able to access their earned wages could greatly improve their wellbeing. Employees wouldn’t have to worry about stretching their money and budget until their next payday at the end of the month, they could instead access their earned wages and withdraw as much as they would like that is available to them and put it towards essentials. This could help employees reduce the stress of making it to payday and having enough money to cover their expenses.
Why should you be offering your employees Earned Wage Access?
Increased employee retention:
Paying employees on-demand could help employers retain their employees. Employees would be able to access their money when they need it. This could help employers to retain their best employees and give them a reason to stay with the business and avoid the costs associated with recruiting and onboarding new employees.
A study found, 91% of millennial workers and 82% of Generation Z workers think it is important for their employer to offer Earned Wage Access. Since on-demand pay is already growing in popularity, when employees have access to their earned wages, they are able to better manage their finances and budget. This could mean improved productivity and job satisfaction. It could also have a positive impact on the overall performance of the company.
Increased employee satisfaction:
We live in a world of instant gratification, people see something and they want it there and then. Because of this, it is leading employees to start thinking of their wages in the same way. They have earnt it that day so why can’t they access it? By offering employees the option of on-demand pay you could see an increase in employee satisfaction as they start to feel appreciated for the work they have completed by getting paid at the end.
So how can we help? Income Group offer an Earned Wage Access solution which comes at no additional cost to employees, meaning they can access wages they have earned in real time for free. Contact us today and we will be happy to tell you more about our EWA capabilities.