Consider this scenario: Sarah is a CNA at a nursing home in Ohio, where she’s worked for five years. She has two small kids and supports her grandmother, who lives with her. She’s a positive, reliable, hard worker, and the nursing home residents love her.
One day while driving home from work, Sarah hits a pothole and gets a flat tire. She's able to get back to her house, but the tire is beyond repair, and she’ll need to have it replaced before she can drive her car again.
The timing is terrible. Sarah doesn’t have a credit card since she’s had bad experiences staying debt-free with them in the past, so she tries to keep extra cash on hand in case of emergencies. But her typical cash reserve is depleted because her two-year-old had an ear infection that required extra doctor appointments and an antibiotic prescription. She’s still a week away from payday. There is no public transportation near her home and, without a car, she won’t be able to go to work, take her grandma to her doctor appointments, go to the grocery store, or take her five-year-old to kindergarten. She doesn’t need a lot of cash to afford the tire repair, but she does need some.
Fortunately, the nursing home Sarah works for recently started offering earned wage access (EWA). She’s able to get the money she’s already earned this pay period deposited directly onto her debit card ahead of payday. Now, she can get her tire replaced and carry on with her life without interruption and without incurring more debt.
Sarah’s situation is not a unique one. It might even sound like something that has happened to you or one of your employees. The statistics are shocking – nearly two-thirds of workers live paycheck-to-paycheck and only 41% of adults are able to cover the cost of a $1,000 emergency using their savings. Bank overdraft fees and late bill payment fees can go up to $35, and predatory payday loans can have a whopping 400% interest rate. This financial stress contributes to distractions at work, absenteeism, and seeking new jobs. This is where EWA can help.
EWA allows your employees to get the money they’ve already earned ahead of payday. It’s not a loan, and it typically has minimal or no fees. For hourly workers, EWA is a competitive hiring advantage and could become an expectation. In fact, many companies that you’re competing against for talent – Amazon, Wendy’s, Big Lots, Kroger – already offer EWA. According to a study from Visa, 79% of employees will switch jobs to get EWA, and 89% of employees will stay at a job longer if the company offers EWA.
OnShift Wallet, powered by Payactiv, is part of OnShift’s workforce management solutions and is completely free for OnShift customers. It integrates seamlessly within the OnShift mobile app where workers manage their schedule, so it can encourage staff to pick up more shifts to increase their accessible earned wages. In fact, most communities that use OnShift Wallet see an increase in employee shift pickups.
In addition to EWA, OnShift Wallet gives users free financial counseling and exclusive discounts on movies, gas, prescriptions, and more. The benefits to communities and employees are significant: Nearly all OnShift Wallet users (95%) would recommend OnShift Wallet to a friend and 90% of users who have access to OnShift Wallet would recommend their workplace to a friend.
A common objection to offering EWA is that employers feel this type of benefit would discourage their employees from being financially responsible. But, as illustrated earlier, many caregivers are living paycheck to paycheck, and an unplanned expense like a flat tire can snowball into high payday loan fees, missed work, loss of income, and financial stress. Surveys of OnShift Wallet users show that 91% use the tool to pay bills, groceries, rent, and utility expenses, and 76% use EWA to avoid things like late fees and overdraft fees. EWA in OnShift Wallet actually helps people be more financially responsible and stay on top of their expenses.
Offering EWA could be the competitive advantage your organization needs for recruitment or retention, and could be the benefit your employees need to maintain financial peace of mind. Learn more about EWA in our on-demand webinar, and contact us for a demo.
