8/9/2021 Leading change: On-demand pay done the right way | BenefitsPRO https://www.benefitspro.com/2021/08/06/leading-change-on-demand-pay-done-the-right-way/ 1/11 Je suis enfin libre du diabète Big Pharma la déteste: elle a inversé son diabète en 3 semaines Sante Vitalite Ouvrir Commentary (/commentary/) Leading change : On - demand pay done the right way Access to on-demand pay is quickly becoming a highly sought-after bene t by employees. By Seth Ross | August 06, 2021 at 10:18 AM (https://almreprints.com/about-reprints/#permissions) Also known as earned wage access, on-demand pay simply means workers can tap into their earned wages before the traditional payday. (Photo: Shutterstock) BENEFITS BROKER (/BENEFITS-BROKER/) BENEFITS MANAGER (/BENEFITS-MANAGER/) RETIREMENT ADVISOR (/RETIREMENT-ADVISOR/) COVID-19 (/COVID-1 (/) Search (/search/) (https://www.facebook.com/Bene tsPro) (https://twitter.com/Bene ts_Pro) (https://www.linkedin.com/company/bene tspro/) My Account (https://store.law refDomain=store.bene tspro.com&source=https% 8/9/2021 Leading change: On-demand pay done the right way | BenefitsPRO https://www.benefitspro.com/2021/08/06/leading-change-on-demand-pay-done-the-right-way/ 2/11 SPONSOR CONTENT By THE HARTFORD INSURANCE GROUP Pandemic makes voluntary bene ts more relevant than ever ( https :// www bene tspro com / native ? mvi = 580747339c8140b2a4c5e4ae0e6556c0 ) The prospect of hospitalization or serious illness, as well as heartbreaking losses of loved ones, became painfully tangible for many working Americans throughout the pandemic. These realizations encouraged many workers to choose voluntary bene ts during the 2021 open enrollment period to help protect their income when faced with di cult circumstances. It’s no surprise the past year has drawn much-needed attention to the critical role employers play addressing the nancial wellness (https://www.bene tspro.com/sites/bene tspro/2021/07/13/to-retain-and- attract-talent-pay-attention-to- nancial-wellness/) of their employees. This need, coupled with the increased challenge faced by businesses to attract and retain top talent, has led forward-thinking organizations to embrace intelligent technologies that address both priorities. With technology advancing at a breathtaking pace, and rapid changes occurring in the world of work, businesses are in a unique position to rethink workplace policies and bene ts, and actively de ne what the future of work looks like. A recent noteworthy development is the move to transform when employees are paid – from a xed pay period to on-demand payroll. Related: On-demand pay: A game-changing bene t as the economy (cautiously) reopens (https://www.bene tspro.com/sites/bene tspro/2020/08/18/on-demand- pay-a-game-changing-bene t-as-the-economy-cautiously-reopens/) Much like Net ix’s streamed content and Amazon’s same-day delivery went from intriguing ideas, to a basic expectation, access to on-demand pay is quickly becoming a highly sought-after bene t by employees. Also known as earned wage access, on- demand pay simply means workers can tap into their earned wages before the traditional payday. Financial wellness programs driven by employee expectations Workplace policies have evolved rapidly over the past year and are putting employees at the center of the work experience. Central to this shift is providing employees the option to get paid at the pace of real life. This is being driven by the needs of employees. For example, in a recent PwC employee wellness nancial survey 63% of workers (https://www.pwc.com/us/en/services/consulting/workforce-of-the- future/library/employee- nancial-wellness-survey.html) say their nancial stress has increased since the start of the pandemic. What’s more, almost three-quarters of workers with increased nancial stress due to the pandemic would be attracted to employers who care more about nancial well- being than their current employers, PwC found. (https://www.bene tspro.com/native? mvi=580747339c8140b2a4c5e4ae0e6556c0) BENEFITS BROKER (/BENEFITS-BROKER/) BENEFITS MANAGER (/BENEFITS-MANAGER/) RETIREMENT ADVISOR (/RETIREMENT-ADVISOR/) COVID-19 (/COVID-1 (/) Search (/search/) (https://www.facebook.com/Bene tsPro) (https://twitter.com/Bene ts_Pro) (https://www.linkedin.com/company/bene tspro/) My Account (https://store.law refDomain=store.bene tspro.com&source=https% 8/9/2021 Leading change: On-demand pay done the right way | BenefitsPRO https://www.benefitspro.com/2021/08/06/leading-change-on-demand-pay-done-the-right-way/ 3/11 While a nancial wellness o ering should consist of numerous bene ts, on-demand pay is quickly becoming table stakes. Workers want exible pay Worker desire for access to on-demand pay is equally high. Globally, EY research reveals 70% of workers (https://www.ey.com/en_gl/ nancial-services-technical- resources/payday-pressure-looking-to- exible-salary-solutions) today are paid monthly or every two weeks, yet four-in- ve workers reveal an appetite to use solutions that give them access to already-earned wages before the traditional payday. Bills and expenses don’t wait until payday. Many people live paycheck to paycheck, with 42% of full-time workers in the U.S. nding it hard to meet household expenses on time each month, a recent survey shows. High earners are not exempt from this, with almost one-third of individuals earning more than $100,000/year also experiencing di culties meeting payments, EY research found. However, the options have largely been limited for lower wage earners when they get into nancial binds. Payday loans—which are often the only recourse for the underserved and underbanked communities –– can carry fees that amount to an annual percentage of 300%, the Center for Responsible Lending (https://www.responsiblelending.org/research-publication/testimony-ending- debt-traps-payday-and-small-dollar-credit-industry) says. Credit facilities can charge up to 20% in interest and fees. Many lower-income workers end up facing billions in overdraft fees (https://www.forbes.com/advisor/personal- nance/how-to- prevent-overdraft-fees/) Reducing nancial stress a win for employers , too On-demand pay provides workers with funds to meet emergencies without having to resort to high-interest payday loans or carry balances on credit cards. With on-demand pay, workers also experience improved liquidity and better control of their nances. While increasing pay and bene ts is often unrealistic, companies that o er on-demand pay can help reduce their employees’ nancial stress without impacting the company’s bottom line. With 80% of employers (https://shrm.org/ResourcesAndTools/hr- topics/bene ts/Pages/Employees-Financial-Issues-A ect-Their-Job- Performance.aspx) reporting that nancial stress is lowering their employees’ performance level, there is no shortage of evidence in the role employers must play in setting people up for nancial success. Thanks to advances in technologies, employers now have choice when they select an on demand pay solution. Finding the right on - demand pay solution 1. What is the cost, especially to employees? Only a few on-demand pay providers o er the service at no cost to workers and even fewer do so at no cost to both employees and employers. Make sure to look for fees, and for frequency of fees, so that workers know how much each transaction will cost them. Even a small fee, of say $5, adds up if workers are only accessing small dollar amounts but they’re doing so frequently. BENEFITS BROKER (/BENEFITS-BROKER/) BENEFITS MANAGER (/BENEFITS-MANAGER/) RETIREMENT ADVISOR (/RETIREMENT-ADVISOR/) COVID-19 (/COVID-1 (/) Search (/search/) (https://www.facebook.com/Bene tsPro) (https://twitter.com/Bene ts_Pro) (https://www.linkedin.com/company/bene tspro/) My Account (https://store.law refDomain=store.bene tspro.com&source=https% 8/9/2021 Leading change: On-demand pay done the right way | BenefitsPRO https://www.benefitspro.com/2021/08/06/leading-change-on-demand-pay-done-the-right-way/ 4/11 2. Is a real payroll run? An accurate, on-demand payment is far di erent than an approximation of earnings. Select a provider that can process on-demand pay requests as a regular payroll with the appropriate tax withholding. This ensures an accurate payment, and an earnings statement for every on-demand pay, to comply with federal, state, and local remittance requirements. 3. Will there be changes to payroll processes? On-demand pay done the right way should not require any changes to the company’s payroll processes. Payroll administrators should continue to close out payroll on the regular weekly, bi-weekly, semi-monthly, or monthly cycle without increasing their workload. This means administrators won’t have to spend time reconciling at the end of the pay period. 4. How are calculations done on what workers can access? Many on-demand pay providers estimate earned wages and reconcile after the fact. This can be cumbersome, and lead to workers getting too much money upfront and then having less money than expected later – not to mention additional back-o ce burden for payroll sta . A real- time calculation of wages earned means employees only access what they have— nothing more. And ensures payroll is reconciled at the end of each pay period, seamlessly and without intervention from the payroll team. 5. Will it o er additional nancial wellness tools? O n-demand pay is a promising tool to enhance nancial wellness among employees. In time, on-demand pay solutions may also include valuable tools, such as nancial planning and rewards programs. Streaming pay in the future While payroll has been slow to change for decades, technology is now making huge leaps possible. Next up? Pay that “streams” to workers as they earn it, whether they’re full-time, part-time or contract workers in the exploding gig economy. With streaming pay, workers will have immediate and complete access to their earned wages—minus withholdings. When streaming pay occurs, workers will be even more empowered to control their own nances. The upshot of all these advancements is that exible pay is now, more than ever, a bene t that companies can optimize to best meet the needs of their people. Seth Ross is general manager, Dayforce Wallet + Consumer Services at Ceridian (https://www.ceridian.com/) Read more: 4 FAQs about daily pay programs (https://www.bene tspro.com/sites/bene tspro/2018/06/19/4-faqs-about- daily-pay-programs/) On-demand pay: What employers need to know (https://www.bene tspro.com/sites/bene tspro/2019/08/01/on-demand-pay- what-employers-need-to-know/) One-third of workers within ‘3 missed paychecks’ of not paying bills (https://www.bene tspro.com/sites/bene tspro/2020/05/18/one-third-of- workers-were-within-3-missed-paychecks-of-not-paying-bills-before-covid- 19/) SHARE SHARE BENEFITS BROKER (/BENEFITS-BROKER/) BENEFITS MANAGER (/BENEFITS-MANAGER/) RETIREMENT ADVISOR (/RETIREMENT-ADVISOR/) COVID-19 (/COVID-1 (/) Search (/search/) (https://www.facebook.com/Bene tsPro) (https://twitter.com/Bene ts_Pro) (https://www.linkedin.com/company/bene tspro/) My Account (https://store.law refDomain=store.bene tspro.com&source=https% 8/9/2021 Leading change: On-demand pay done the right way | BenefitsPRO https://www.benefitspro.com/2021/08/06/leading-change-on-demand-pay-done-the-right-way/ 5/11 Voluntary Bene ts (/Bene ts-Broker/Voluntary-Bene ts/) Employer-Paid (/Bene ts-Manager/Employer-Paid/) De ned Bene ts (/Retirement-Advisor/De ned-Bene ts/) Dig Deeper Trending Stories 1 More businesses mandating vaccines , but are employees on board ? 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Proveri Orion telekom Пријавите се SPONSOR CONTENT By THE HARTFORD INSURANCE GROUP Pandemic makes voluntary bene ts more relevant than ever ( https :// www bene tspro com / native ? mvi = 580747339c8140b2a4c5e4ae0e6556c0 ) The prospect of hospitalization or serious illness, as well as heartbreaking losses of loved ones, became painfully tangible for many working Americans throughout the pandemic. These realizations encouraged many workers to choose voluntary bene ts during the 2021 open enrollment period to help protect their income when faced with di cult circumstances. Recommended Stories (https://www.bene tspro.com/2021/08/04/what-do-large-employers-want-in-a- nancial- wellness-program/) What do large employers want in a nancial wellness program ? ( https :// www bene tspro com / 2021 / 08 / 04 / what - do - large - employers - want - in - a - nancial - wellness - program /) KRIS ALBAN | AUGUST 04, 2021 Advisors should learn about their client’s speci c needs and nd out what is most important to both the sponsor and participants. (https://www.bene tspro.com/native? mvi=580747339c8140b2a4c5e4ae0e6556c0) (https://www.bene tspro.com/2021/07/28/3-ways-health-care-employers-can-boost- employee-resilience/) 3 ways health care employers can boost employee resilience ( https :// www bene tspro com / 2021 / 07 / 28 / 3 - ways - health - care - employers - can - boost - employee - resilience /) MISSY PLOHR-MEMMING | JULY 28, 2021 It is more critical than ever that employers o er a supportive culture, inclusive of bene ts that will fortify their employees’ resilience. 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