Sixty-three percent of Americans were living paycheck to paycheck as of November, up from 60% the month prior, according to a recent report. Low wages do not entirely explain this growth, as 47% of those earning more than six figures per year also reported living paycheck to paycheck, up from 43% in October. The inability to save can have massive downstream effects, as any unexpected expense that may arise could potentially result in financial ruin.
Access to real-time payroll could go a long way toward relieving financial stress. A system called earned wage access (EWA) offers employees daily pay for their work rather than the traditional biweekly or bimonthly pay period, ensuring that workers’ compensation is available immediately rather than forcing them to wait. This system is available through several existing payments rails, including The Clearing House’s RTP® network.
This edition of the “Real-Time Payments Tracker®” examines how instant access to earned wages can benefit employees and the companies offering the service.
Around the Real-Time Payments Space
Hospitals are one of many industries recently suffering from staffing crunches, and some are taking bold steps to attract new talent. Trinity Health recently announced that it would offer daily payment of wages to employees, an option only feasible via real-time payments. Trinity Health partnered with DailyPay to enable this daily payment option, with instant payments moving through the RTP® network.
EWA, also known as on-demand pay, has existed for nearly a decade but has been surging in popularity in recent years. A recent survey found that 81% of households earning more than $100,000 per year want EWA. Overall, the survey showed that 78% of workers said free EWA would improve their loyalty to their employer, and 79% said it would make them feel more valued as employees.
For more on these and other stories, visit the Tracker’s News and Trends section.
An Insider on Improving Employee Satisfaction via Instant Payroll
One example of real-time payroll success comes from Oglebay, a West Virginia-based resort that implemented this system in 2018. The implementation of instant payments access for Oglebay employees was designed from the ground up to alleviate employees’ personal financial struggles and boost retention, and 42% of the resort staff currently leverage it to pay for a huge range of everyday expenses.
This month’s Insider POV features Karen Hess, Oglebay’s vice president of human resources, discussing how instant payroll has significantly improved quality of life for the resort’s employees.
Workplaces Begin To Offer Instant Payroll in Limited Capacities
Payroll delay is rampant among the American workforce, especially gig workers. Studies have found that 74% of freelance workers have not received their pay on time, with 20% receiving pay one day late and 16% reporting they are regularly not getting paid for up to two months after they expected. While freelancers feel the most acute payment delays, salaried employees are no strangers to payroll delays, either — even those who receive their paychecks via a regular biweekly schedule often report financial difficulties when waiting for their next pay period.
This month’s PYMNTS Intelligence examines how corporates can improve their employees’ and freelancers’ financial well-being via instant payroll solutions.
About the Tracker
The “Real-Time Payments Tracker®,” a collaboration with The Clearing House, examines the financial hardships caused by traditional payroll, how real-time payroll can help employees and the steps that businesses are taking to make instant access a reality.