Tuesday, October 17, 2023
Debunking The Myths Of EWA
Earned wage access or EWA is a financial service that provides financial relief through the flexibility of accessing hard-earned wage before payday. EWA is designed to help employees cover any unexpected or emergency expenses. This is an effort to avoid these employees from doing unnecessary loans with high interest rates which could contribute to their financial stress.
As employers, you can also enjoy the benefits of EWA through the financial wellbeing of your employees. Let us debunk some of the myths that surround EWA and have a better understanding of this innovative tool as we progress as an industry that provide and strive.
MYTH 1: EWA Is a Debt
EWA bears no resemblance to loans or debt; rather, it stands as the swiftest avenue for workers to tap into their own earned income. Employees can retrieve a portion of their earned but unpaid wages whenever the need arises. It is important to note that this access is limited to a specific portion of their accrued earnings, not the entirety of their paycheck.
MYTH 2: EWA Burdens The Payroll System
Earned wage access has no influence on your current payroll procedures and demands no extra input from the payroll department. Service providers offering earned wage access, such as Paywatch, can smoothly incorporate into your current HR technology systems, monitoring hours worked to ascertain an employee's available funds at any point.
Furthermore, these on-demand wages will be deposited into the employee's account by the provider, relieving you of concerns about cash flow, and repayment will occur when the employee receives their salary on their scheduled payday.
MYTH 3: Only Employees Benefit From EWA
Employers can also directly receive help from EWA. This can be seen through the reduce on the amount of financial stress that employees had to go through before using EWA services. As their financial stress subsides, employees can focus and deliver their best services in delegating the tasks due to the increase in their productivity.
Furthermore, employers can also retain and attract talents with this innovative employment welfare that many seeks especially when it comes to financial flexibility. Unknowingly, EWA helps in fulfilling the productivity of the company.
MYTH 4: EWA Fosters Poor Money Habits
On the contrary, offering immediate access to earned wages can have a notably positive impact on employees' financial situations. The conventional pay cycle often does not align with the timing of expenses and bill due dates, putting many employees at risk of facing cash flow shortages. This can compel individuals to turn to payday loans, overdrafts, and incur late fees, which will cause an increase in their debt.
In fact, 61% of Paywatch’s users access our service for emergency purposes and only 7% of them access Paywatch for leisure purposes.
MYTH 5: EWA Is Only for the Lower-Income Individuals
Earned wage access (EWA) is not exclusively for lower income individuals. EWA programs can benefit a wide range of employees, including those with various income levels. While they can be particularly helpful for individuals who are living paycheck to paycheck, they can also be valuable for those in higher-income brackets who may have financial needs or unexpected expenses.
EWA programs are designed to provide financial flexibility and help employees manage their cash flow more effectively, which can be relevant to individuals from different income backgrounds. The decision to offer EWA as an employee benefit is often driven by the employer's desire to support their workforce's financial well-being, rather than being limited to lower income employees.
MYTH 6: All EWA Services Are the Same
Every EWA service varies in multiple aspects, encompassing features, fee arrangements, and the overall user experience for both employers and employees. Some services may provide effortless integration options, while others might require manual processing.
EWA services can vary in terms of the fees they charge. Some may charge flat fees, subscription fees, or transaction fees, while others might operate on a tip-based model where users are encouraged to tip the service.
With Paywatch, you can embrace a seamless integration method tailored to the specific needs of your business and employees. Users can also enjoy Paywatch with no hidden fee nor interest charges. At Paywatch, consumers are only required to pay RM1 as withdrawal fee.
EWA is a progressive step towards enhancing financial well-being in the workplace, offering employees a more stable and secure financial future. By debunking the myths and embracing the facts, we can foster a greater understanding of this valuable tool and continue to improve the financial lives of workers across the board.
As EWA continues to evolve, it is a hope of Paywatch that employers and employees alike will seize this opportunity to reshape the traditional paycheck cycle for the better. Choose Paywatch and enjoy the positive change of your overall business.