Alternative methods of payroll such as early wage access (EWA) could be a solution to the UK’s cost of living crisis. EWA, also referred to as on-demand pay, instant pay, or the government-issued term of an Employer Salary Access Scheme (ESAS) is adopted by some UK employers to avoid them falling into in-work poverty.
Although pay cycles are usually linked to a company’s financial cycle, there could be scope for employees to have more control over when they’re paid in the future.
Steve Tonks, Senior Vice President – EMEA at WorkForce Software, suggests EWA could benefit low-income workers by giving them earlier access to their monthly wage.
“With a third of low-income households struggling to pay bills every month, EWA ensures that workers can better manage their cashflow if a sudden bill arrives and avoid high interest payday loans,” Tonks says.
EWA shouldn’t be a ‘nice-to-have’, he argues. It should be viewed as an ongoing CSR goal for organisations, supported by education and advice on money management. EWA payroll systems could also be easy for HR to implement he said.
“Fortunately, the technology behind EWA is quite simple. It involves capturing an employee’s daily worked hours and processing payments based on the rules that apply to that day,” Tonks says. “This will not only shorten the time gap between when hours are worked and when employees are paid, but also streamline and simplify payroll operations.”