Dive Brief:
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Employers, spurred by the gig economy, are exploring the idea of getting pay to employees as they earn it, according to the New York Times.
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The on-demand payment options included payroll cards, ATMs and other methods, so employees can collect their pay as soon as they earn it (there is fee to transfer funds).
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One upside is it could curtail the use of high-interest payday loans, as well as drive productivity due to financial instant gratification (longer hours worked), according to the Times.
Dive Insight:
Rather than weekly paydays, Lyft recently started giving drivers immediate pay access and the company reports more than a third signed on. Uber offers a similar program via prepaid debit card.
As the Times notes, most U.S. workers still are paid by employers with less fluidity when it comes to payroll, and until the gig economy got rolling (service employees who earn tips have long been paid quickly) why change? With financial insecurity rising some employers are open to exploring ways to help relieve that tension and also boost productivity.
One employer cited by the Times offers an on-premises ATM. And there are startups that workers can subscribe to that will facilitate the fast payment process. While much of this is spurred by the gig economy, it impacts all workers who struggle with money management or who's wages are less than their living expenses.