June 2023
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TD Magazine

New Options Provide Early Earnings Access

Thursday, June 1, 2023

If workers have earlier access to wages, what does that mean for employers?

Businesses are looking for any minor edge to attract and retain workers. Earned wage access, where an employee receives a portion of earnings that their employer then deducts from their next paycheck, is one solution. Fifty-five percent of HR and finance executives consider earned wage access a possible tool for recruiting and hiring new staff, while 69 percent said their employees would "love this option," according to the Winning the War for Talent report by CloudPay and Industry Dive.


With employees less worried about the next sudden expense, employers can benefit from a more stable workforce. PwC's 2022 Employee Financial Wellness Survey found that employees stressed about finances are twice as likely to be looking for a new job than those who aren't stressed. Meanwhile, the CloudPay/Industry Dive report notes that 44 percent of employees said having access to pay earlier would increase loyalty to their employer; another 19 percent said they would think more favorably about where they work.

Earned wage access has its challenges and concerns. First, the regulatory landscape around this financial service is unsettled, and 69 percent of executives indicate compliance is one of their biggest payroll issues. Second, because fewer than three in 10 employees are familiar with the service, businesses must educate employees on what it is, what it isn't, and how employers should manage it.

Third, while there are different types and structures to earned wage access, consumer protection advocates such as the National Consumer Law Center argue the fees that a provider charges can quickly eat into employee wages, thus exacerbating a worker's financial precarity. To that point, 64 percent of executives CloudPay and Industry Dive surveyed agree that employers need to cover all service costs and fees to have the maximum benefit on the employee experience.

About the Author

I'm a developmental editor at ATD Press, working primarily with books. I joined the ATD team in December 2014. I review manuscripts and team up with authors to produce well-written and well-developed books. Before ATD, I worked as a jack-of-all-trades editor for a small editing and design firm in DC. with a focus on economic and development reports. I have a master's in publishing from George Washington University.

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