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Earned Wage Access

The Ultimate Earned Wage Access Guide

Discover the compelling reasons why employees are increasingly drawn to and remain committed to employers who provide Earned Wage Access (EWA). Not only does EWA enhance the recruitment and retention process, but it also amplifies productivity and fosters greater engagement.

What Is Earned Wage Access?

Earned Wage Access, or EWA, is a solution that gives employees access to their earned pay before their next paycheck. EWA is often a component of an organization's broader financial wellness program that can help employees manage unexpected expenses. EWA programs are also a great benefit to the businesses that use them.

What EWA is Not

For clarification, it's important to note what EWA is not.

  • EWA is not an advance on future earnings.
  • EWA is not a payday loan. 
  • EWA does not charge interest. 
  • EWA is not intended to put employees into a "cycle of loans."
  • EWA is not tricky to set up or implement.
  • EWA does not replace payroll.

The Benefits of Earned Wage Access: Today's Future

Earned wage access (EWA) has become a widely accepted solution for enhancing employee financial security, talent recruitment, and retention.

The payment landscape has transformed in the last decade, with new payment methods changing how consumers pay for goods and services and manage their finances. These trends have influenced how employees prefer to receive and manage their pay, creating fresh challenges and opportunities for employers.
By enabling employees to access their earned wages before their next pay period, they can pay their bills on time and handle unexpected expenses without incurring late fees, overdraft fees, or predatory payday loans.

Today, EWA programs have progressed from the initial adoption stage to an established business practice included in the employee benefits package. When used efficiently, EWA programs can offer employees greater financial security.

How Earned Wage Access Recruits & Retains Employees

EWA has sparked widespread interest among workers of all ages, educational backgrounds, and income levels. According to a recent poll, 66% of employees working for companies without EWA expressed willingness to embrace it if their employer offered it. Furthermore, 82% of employers with over 1,000 employees who didn't provide EWA expressed their eagerness to adopt it. More and more people are stressed by rising inflation and costs, causing more employees to live paycheck-to-paycheck.

  • 80% of employees are concerned about inflation across all demographics, including age, gender, race, and income. (Bank of America Report, 2022)
  • Among workers earning $100,000 or more, the number of employees living paycheck to paycheck doubled from 18% in 2029 to 36% in 2022. (WTW Global Survey, 2022). 
  • Only 30 percent of people with annual incomes of at least $100,000 cited money as a negative factor in their mental health. That's compared to 48 percent of those with household incomes of less than $50,000 (Bankrate, 2022). 
  • Workers reported having difficulty accessing or paying for housing (23%), healthcare (22%), or healthy food (19%) (WTW Global Survey, 2022). 
  • 47% of respondents reported being unable to pay all their bills on time in the last 12 months (Financial Health Network Report, 2022).

Valuing employees in the workplace leads to increased productivity, happiness, and reliability. A study by Mercator Advisory Group revealed that flexible pay benefits employees and results in a 27% increase in job retention. Here are the reasons why:

Financial Wellness
With EWA, employees can take charge of their finances and cover essential expenses like bills and groceries. EWA can also boost their overall financial well-being. Unfortunately, over 50% of American workers live paycheck to paycheck, leaving them vulnerable to late payments and service disconnections that can damage their credit scores. In dire situations, employees may rely on credit cards or payday loans, with hefty fees and high-interest rates. You can help your workers avoid overdraft fees, payday loans, and credit card interest by giving them access to on-demand pay providers. Access to on-demand pay providers allows them to manage their budget and make smarter financial choices that work for their unique situation.

Flexibility, Stability, and Security
Employees can better manage how and when they receive their hard-earned money, making aligning with their financial obligations more manageable. In addition, they can access emergency funds instantly to cover unexpected expenses without adding to their debt. Plus, those without a bank account can have an alternative solution to access their money.

Employees can better track their income and expenses, giving them the power to manage their money more effectively and save in the long run.

How Earned Wage Access Supports Core Business Strategy

EWA Has Surpassed Expectations
Employers offering EWA have reported a swift and extensive adoption across their workforce.. According to a survey, 20% of employees expressed their desire to use EWA every or every other pay period. Additionally, out of the employees who already have access to EWA, an overwhelming 62% used it every or every other pay period.

Millennials Prefer Job Offers with EWA
EWA is a game-changer for millennials in the job market. According to recent surveys, 59% of millennials prioritize job offers from employers offering EWA. Moreover, 57% of millennials say EWA availability would influence their decision to accept a job offer. By offering EWA, employers can gain a competitive edge in recruiting and retaining top talent. 

Recruitment & Retention
EWA can set your company apart in a competitive job market and help you attract a wider pool of applicants while speeding up the hiring process. Recent survey results show that employees of all ages, educational backgrounds, and income levels place a high value on EWA, making it a critical factor in today's labor market. You can attract new talent and retain your current workforce by offering EWA. Studies indicate that EWA can increase employee loyalty by 78% and reduce turnover by almost 36%. 


Case Study  Discover how PepperJax used Proliants Earned Wage Access Solution

Financial stress is a shared concern today; your employees are no exception. The burden of bills can weigh heavily on financially strapped employees, leading to decreased productivity and availability at work. Reducing their financial worries can boost their focus and productivity, making them feel more valuable. EWA provides a perfect solution by offering your employees visibility into their daily earnings and immediate access to cash. With financial confidence, your employees will be more involved and productive at work and less likely to be distracted by stress or the need for a second job.

How Does Earned Wage Access Work?

EWA services connect an employer's payroll system and give employees access to a portion of their earned wages based on the hours they've already worked. 

EWA services vary depending on the provider, but most services allow employers to set the frequency for employee payouts. The frequency may be a certain number of times per day, week, month, etc. 

Here's how it works:

  • Employee Enrollment: The process starts with employees enrolling in the EWA program. Typically, employees will download an app or access the EWA provider's web portal and link their bank accounts. 
  • Time and Attendance: EWA providers track employee hours and attendance and then calculate earned wages based on their hourly rate. The EWA solution pays an advance to the employee up to the current amount earned or a certain percentage.
  • Payday Repayment: The amount that was advanced to the employee will be recovered on the scheduled payday from the employee's bank account or before the deposit is made.
  • Remaining Amount: Any remaining amount not taken as an advance by the employee will be paid to them on the scheduled payday as usual.

What to Consider When Evaluating and Implementing EWA

When evaluating and implementing an EWA solution, it's essential to consider the following factors:

  • What provider makes the most sense for your company? There are many options when it comes to selecting an EWA solution. Do thorough research and consider whether a standalone or integrated solution works best.
  • What is the cost associated with each transaction? Take time to ask about and understand how each provider charges for EWA. How much will EWA cost the company? What will employees owe every time they request funds? Is there an interest charge?
  • What will benefit employees the most? Consider what safeguards you need to place around how much money and how often your employees can access their earned wages to help them the most.
  • How can you grow awareness of EWA? Communicate to current employees that the option is now available. Update any materials about benefits and incorporate enrolling EWA into onboarding. 

Proliant - Earned Wage Access Benefits Infographic - CTA


Earned Wage Access Pros and Cons

Earned wage access is a great benefit to offer employees. Still, it can also come with downsides if employees are not educated about how to use the service. Let's examine some pros and cons of using earned wage access.

Benefits of Earned Wage Access

Earned wage access has been around for years and is a win-win for employers and employees, offering the following benefits to both. 

Benefits for Employees:

  • Financial Flexibility for Employees: Allows employees to cover unexpected expenses or bills before they receive their regular paycheck.
  • Greater Financial Well-Being: Employees will not need credit cards or predatory high-interest loans to manage finances.
  • More Job Satisfaction: Employees will enjoy greater job satisfaction as they experience reduced stress with more financial flexibility and stability. 

Benefits for Employers:

  • Reduced Absenteeism: By offering Earned Wage Access, employers are providing greater financial security and reducing financial stress on employees, reducing employee absenteeism. 
  • Greater Recruiting: Employers that offer earned wage access will likely see more outstanding results when recruiting because employees see this as a massive benefit for greater financial security. 
  • Higher Employee Retention: EWA creates greater job satisfaction for employees, ensuring they are happier and stick around longer.

Downsides of Using Earned Wage Access

While there are many benefits to using earned wage access services, employees must carefully consider the potential drawbacks. Employers can help by providing plenty of information and resources to help employees manage their finances. Here are a couple of things to consider before using or offering EWA services: 

Fees and Restrictions:
Some EWA providers charge fees or impose restrictions on the money available for early access.

Reduced Take-Home Pay:
Early access to earned wages means that the employee's regular paycheck will be reduced by the amount taken out before the regular payday. This is something that employees will need to be aware of and prepared for when using EWA services.

Proliant - Earned Wage Access Pain Points Infographic - CTA


Frequently Asked Questions

What is the Difference Between Earned Wage Access and Cash Advance Apps?
While both earned wage access (EWA) and cash advance apps offer access to money before payday, they are very different. 

With EWA services, employees have early access to wages they've already earned based on their work hours. The amount of money available with the EWA is limited to the employee's earnings. Earned wage access is offered as a benefit by employers to their employees. 

Cash advance apps offer loans that accrue interest and often have high fees and interest rates. These loans usually come from financial institutions that are not associated with banks. Cash advance apps may also require credit checks or other forms of eligibility that employees may be unable to meet.

Proliant Offers the Best Earned Wage Access Services with ReadyPay Today

With ReadyPay Today, Proliant's earned wage access solution, employers can offer their employees peace of mind with an easy-to-use, worry-free service. 

Proliant's earned wage access services come with resources to answer employee questions and concerns and to help them make sound financial plans. 

ReadyPay Today is an EWA service with no fees or restrictions. Employers can choose the frequency of employee payouts and set limitations based on what is best for their employees. 
Are you ready to provide employees greater financial security while reducing absenteeism and turnover with ReadyPay Today? Contact Proliant today to schedule a consultation.