Published 1 February 2022
👋 The outbreak of the Covid-19 has made us realize the uncertainty and anxiety around our financial stabilities. Even after things went normal, there is still a stain and challenge for the country's workforce. According to a study by KPMG, 30% of organizations reported a downfall in the fixed pay system and questioned the traditionality of payment of salaries. Fortunately, there is now an alternative for that.
Breaking the trend of monthly salary system, people and businesses are now adopting a unique solution called Earned Wage Access. Let us know more about what it is and why it is needed.
Earned Wage Access or EWA is a financial product that equips the employee with access to a portion of the salary they earn before their actual payday. The remainder salary is paid at the end of the pay period without disturbing the payroll. If we try to answer why we need Earned Wage Access, it is because EWA helps the employee align their income and the required Payroll and reduce th e load of credit schemes that have high interest. Compared to salary-based loans, Earned Wage Access does not involve any borrowing on the part of employees, and there is only a nominal cost or no cost charged from them apart from fees if it is outsourced. Earned Wage Access can also be called instant pay, on-demand pay, early wage access, accrued wage access, or salary advanced scheme. Also, it is a technology that can be in multiple ways to benefit the employees. It can either be loaded on a prepaid card automatically or deposited on the user's direct deposit. Earned Wage Access can also be transferred into an employee's bank account if facilitated by the provider. Also, some EWA providers make access readily available through the mobile application.
Conclusion People, businesses, and organizations can now break the loop of waiting an entire month to get their pay in hand with the help of Earned Wage Access. Employees are no longer needed to get payday loans or short-term credit facilities, resulting in a cycle of debt. Earned Wage Access expands the horizon of financial benefits to allow employees to reduce their stress and nurture their overall being. Research has also shown that Earned Wage Access has impacted the employees positively and enhanced their engagement and productivity rates.
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