Earned Wage Access (EWA) 101

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Tate Hackert, President & Founder of ZayZoon

As a pioneer in Earned Wage Access, Tate founded ZayZoon as a way to combat payday loans while still giving people relief between paychecks. ZayZoon’s product allows employees to instantly access their earnings ahead of their regular scheduled payday, without debt or egregious fees. Today, more than 4000 businesses across the United States leverage ZayZoon to reduce employee financial stress and improve key organizational metrics such as productivity and retention.

Attract, retain and motivate talent while reducing costs with EWA

Guest post by: Tate Hackert

It should come as no surprise to learn that many employees are living paycheck to paycheck—two in five, to be exact. 84 percent of employees are also worrying about finances while at work.

Employees today are struggling to make ends meet, often taking out high-interest loans or getting dinged with everything from bank fees to late fees. It’s taking a toll and impacting their ability to do their best work.

This is where Earned Wage Access comes in.

For a small- or medium-sized business, Earned Wage Access represents another lever to pull to remain competitive in today’s market and improve your employee’s financial wellness. Here’s how.

What is EWA?

But first, let’s start with some definitions.

EWA gives your employees access to funds they’ve already earned but have not yet been paid due to the traditional pay cycle (e.g. bi-weekly or monthly).

So, similar to a traditional employer-provided pay advance, it’s not borrowing. It’s receiving the money the employee has already earned by working, but in advance.

EWA benefits

But how does Earned Wage Access benefit your employees and help them achieve their goals?

Decrease employee financial stress

EWA gives employees much-needed flexibility. With early access to their earned wages before payday, they can meet unexpected expenses without having to resort to predatory lenders. EWA offers employees the flexibility to handle unexpected expenses.

When asked “Has access to ZayZoon’s Earned Wage Access improved your overall financial well-being and financial stress?”

  • Nearly three-quarters of respondents reported improvements
    • 9 percent said “somewhat improved”
    • 5 percent said “significantly improved”

ZayZoon also provides employees access to financial wellness tools, educational resources, budgeting tools, debt management resources, and retirement planning. These resources can reduce employee stress and turnover.

Decrease employee turnover and improve productivity

As you know, employee retention and motivation is a multifaceted challenge. And, we don’t think Earned Wage Access is a magical silver bullet that can fix it alone at every business.

However, EWA is a critical piece in the puzzle of comprehensive financial wellness tools that addresses the immediate needs of your employees.

We asked 2,459 employees across industries, who currently use ZayZoon’s Earned Wage Access, a few questions to see the impact on their work performance and tenure.

When asked “On a scale of 1 to 5, how much does the availability of ZayZoon’s earned wage access motivate you to perform well at work?”

  • 78 percent answered 4 or 5

When asked “would you choose to work at a job that offers Earned Wage Access (EWA) compared to one that doesn’t?”

  • 66 percent answered yes

When asked “would you be motivated to perform better at a job that offers Earned Wage Access (EWA) compared to one that doesn’t?”

  • 65 percent said yes

Reduce hiring costs

ZayZoon businesses offering loan programs to employees have saved up to $8,000/year by providing access to earned wages instead.

Through research conducted by ZayZoon, employers who offer access to earned wages, see a 5 percent reduction in hiring costs, representing savings of about $19,000/year for a business of 200 FTE on average.

No more pay advances

As you know, employees often look to their employer for help when they are struggling with their finances in the form of pay advances. Offering advances can be very time consuming and expensive.

Many employees also feel shame and embarrassment when asking for a pay advance as they have to disclose why they need an advance.

With EWA, employees can access their wages on-demand without notifying their employer. They can get the funds they need and get back to work without a worry.

Incentivize moving from paper checks

Paper checks are going the way of the dinosaur. And for very good reason: paper checks are 10x more expensive than making payments digitally.

One way savvy business pros are getting their workforce off paper checks is by offering EWA. It incentivizes the transition while giving employees the option to get paid whenever and however, they want.

This is an effective strategy to get the employees who do have a bank account to choose direct deposit to receive their paychecks.

How much does Earned Wage Access cost?

EWA costs employers nothing. You heard that right. Zilch.

However, there are fees for employees—$5 at most, to be exact, or about what it costs to use an ATM machine.

That said, ZayZoon does provide a couple free options for employees who want to get paid early.

  • Prepaid ZayZoon Visa card: A digital card issued to employees almost instantly. Acts like a debit card, allowing employees to spend a preloaded balance with their earned wages.
  • Gas Card: It has no fees, gives a 5 percent bonus on every fuel purchase, and includes an extra $5 on first payout—turning every trip to the pump into savings.
  • Instant Gift Cards: Through partnerships with some of the nation’s top merchants (think: Amazon, Instacart, Walmart, etc.) employees can receive their pay via Instant Gift Cards—with an added up to 25% savings.

ZayZoon: Earned Wage Access for small-to-midsize businesses

Giving employees Earned Wage Access doesn’t just promote better financial health—it can also make your business a better place to work. While EWA is still a relatively new benefit, market awareness is growing and employees are coming to expect it.

Curious to learn more about EWA or find out how ZayZoon can help you? Get in touch with one of our experts to learn more today.

Simplify HR management today.

Simplify HR management today.

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