Earned Wage Access

Who should pay for earned wage access?

When earned wage access providers charge employees, they replace one predatory solution with another. But employer-sponsored EWA charges your workers nothing.

Earned wage access (EWA), or on-demand pay, is a benefit that enables employees to access their earned wages before payday, and it’s considered by many to be an innovative alternative to predatory payday loans.

But depending on how they charge for the service, EWA providers can be as predatory as the payday lenders they claim to replace.

Most EWA vendors profit from financially vulnerable employees

Unfortunately, most EWA providers follow the same playbook as their payday loan predecessors. They wait for employees to have a critical and immediate need for cash, then charge a fee to access the money.

The big problem with these employee-paid EWA providers is they’re incentivized to drive up EWA usage and fees. More fees mean more profits from your financially vulnerable employees.

How much are employees paying for EWA?

Bloomberg Law breaks down how much employee-paid EWA vendors like DailyPay charge workers. Employees typically access their wages early 4–6 times per month, with fees ranging from $2 to $3 per use.

This means employees pay up to $18 per month just to access their own money. And assuming a 30% monthly adoption rate, total fees at a 30,000-person company can reach almost $2M per year billed to your employees.

An alternative to employee-paid EWA vendors

Employee-paid EWA providers have created a new tax on the most financially vulnerable portion of our workforce. They’re capitalizing on those in need, and touting their “solution” as the end to payday loans. In reality, they’re just replacing one predatory system with another.

But EWA can be the solution that dismantles payday lending. It just requires deeper commitment from employers. When employers sponsor earned wage access, their employees get the benefits of EWA without the predatory incentives of employee-paid programs.

If you’d like to learn more about Even’s employer-sponsored EWA platform, send us an email to hello@even.com.

If you currently offer employee-paid EWA, ask your vendor how much they’re billing your employees each year. Then let Even propose a better alternative.

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