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sign-up was quick, cash could be received almost instantly, and the programs became popular with workers. Employers adopting EWA reported significant increases in worker retention and found programs helpful for recruitment. This continues to be verified through the frequent surveys of employers and employees. Clean On the Surface, Complicated Underneath It was one thing to take a passenger’s amount paid through an app and immediately apply it to a driver’s account, but, for employees, several other levels of work were necessary to apply these programs successfully. To get potential net pay information, EWA providers
began integrating with employer timekeeping and payroll systems to calculate real-time accruals for worker draws. Some offerings of EWA were very deliberate in monitoring the employer-provided data, essentially running a parallel payroll; others were more general, looking at pay rates and hours worked, and then offering a percentage or a set dollar amount, of an estimate. Fighting For Credibility Providers often saw pushback and rejection once payroll became involved, however. Increased burden and potential compliance issues were payroll’s top concerns. Consumer advocates saw EWA simply as another version of a payday loan—albeit less expensive overall—and pushed to place EWA under the oversight of the Truth in Lending Act (TILA), which could dramatically change many of the EWA business models. Claims that workers could be harmed by the practice have come out in legislative testimony and court cases. Also, because EWA was seen in the late 2010’s as likely a non-loan financial vehicle by the federal government, firms related to
So, there now exists two camps of EWA: Employer- integrated EWA operators and those providing direct-to-consumer, non- integrated models.
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GLOBAL PAYROLL MAGAZINE ISSUE 23
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