Earned wage access (EWA) 101
What is it, and how will it benefit your team?
73% of employees are stressed about covering necessities. Many workers worry about where their money goes, from paying bills to rent and mortgage payments to groceries. They are anxious if they’ll be able to save money for a vacation or school, or feel tapped if an emergency pops up.
There is a financial wellness benefit available to help ease employees’ worries: earned wage access (EWA).
EWA is a way for employers to be both competitive in a crowded job market and provide an essential benefit for employees. As employees' needs evolve, benefits must as well. Health and wellness are no longer the only way to support employees if the core issue—financial stress and strain—isn’t managed.
What is EWA?
Earned wage access (EWA) is a convenient way for employees to access their wage in advance.
Often called on-demand pay, EWA is a flexible offering. It enables employees to get a percentage of their money without waiting until a traditional payday, which can be biweekly, semi-monthly, or monthly).
EWA is a financial wellness benefit used to avoid financial strain—such as overdraft fees, payday loans with a high percentage, or adding more credit card debt. Today’s workers are exceptionally stressed about their finances: 35% say they are stressed daily about their financial picture.
How does it work?
EWA at ZayZoon means an employee can receive part of their earnings via transfer in their bank account in minutes. Other EWA providers vary on cost to the employee or employer. Employees pay a small transaction fee for a direct transfer deposit. At ZayZoon, employees can also take advantage of free options such as a prepaid VISA card or instant gift cards to many
major retailers.
EWA vs. payday loans vs. pay advances
It’s not shocking to know that many workers are living paycheck-to-paycheck. According to a report from the Bank of America, 30% of workers are in this situation, noting that 26% of households spend 95% of their money on necessities.
There are a few ways for workers to get funds without having to rely on credit cards or overdraft but some are much more costly, accrue more debt and interest.
- EWA enables employees to access their earnings before payday. These are funds that an employee would traditionally receive whenever payday hits
- Pay advances are short-term employer-led financial solutions where employees can borrow against their future earnings
- Payday loans are short-term advances provided by payday lenders with high-interest rates
Either option beyond EWA has its cons: 62% of HR professionals say processing pay advances is somewhat too time-consuming, while payday loans can leave borrowers in a worse position because annual percentage rates (APR) can be as high as 300 - 500%!
Benefits of EWA
Access to EWA can lead to improved employee wellness. Employers may see more engagement at work, attract and retain high-performing employees, and see a boost in employee morale and confidence.
33% percent of employees say their morale would increase if employers invested in their financial wellness.
For both salaried and hourly employees, the benefits of EWA include:
- Instant access to earned income
- More money saved (on average, ZayZoon saves employees an extra $700 per year)
- Less stress (89% of EWA users report feeling less anxiety around their finances)
- Flexibility to use your earnings when you need, not on a biweekly schedule
How to get started with EWA
EWA costs employers nothing for employers. The only fees are for employees: $5 per transaction, or about what it costs to use an ATM machine.
ZayZoon does provide a couple free options for employees who want to get paid early.
Fee-free options include:
- Prepaid ZayZoon Visa card: This 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% 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 gift cards from some of the top merchants—Amazon, Instacart, Walmart, etc.—employees can receive their pay via Instant Gift Cards. With an added up to 25% savings they can spend their money on exactly what they need.
Providing employees with earned wage access not only strengthens their financial well-being but also leads to higher productivity, reduced stress, and improved job satisfaction—directly improving team performance.
