UK 
United States
By Archie Heaton
On-Demand Pay, also known as Earned Wage Access, is now offered as an employee benefit by 15% of UK employers. In industries that rely on shift workers - like care, retail and hospitality - it is estimated that almost a third of employees have access to the service. This includes those working at many of the country’s biggest employers: including Capita, Tesco, ASDA, Carpetright and a majority of NHS staff.
Every week I speak to HR and payroll professionals who want to offer this service, but are unsure which financial wellbeing platform to offer it through. In this article, I explain how you make that decision by asking just three questions:
Do they adhere to the Code of Practice?
Do you want to automate this for your payroll team?
What are the values you want in a provider?
The Code of Practice
In response to On-Demand Pay’s popularity, the Financial Conduct Authority (FCA) requested the leading providers come together to create a Code of Practice. This code now acts as a helpful shortlist for employers looking to offer the service. In fact, the FCA has said that “employers should be encouraged to only contract with providers adhering to this code”.
More details on the code, and a full list of providers, can be found on the Chartered Institute for Payroll Professionals’ (CIPP) website here. I would strongly recommend only working with those who are listed here.
Automated for Payroll
While seven firms have been independently certified against this Code of Practice, only two have developed the technology to automate On-Demand Pay - Wagestream and my company, Level. This solution enables you to offer the service without your payroll team having to make manual deductions each pay cycle. Payroll can continue to operate as it does now, and the recouping of any wages taken early is managed automatically.
This video explains how the technology works in more detail, but myself or one of my team would be more than happy to explain this directly (contact us). While this approach can appear novel at first, this is how the majority of employers who offer On-Demand Pay now run payroll, from Home Instead to Burger King.
Approaches to Other Services, Like Debt
While the FCA notes that On-Demand Pay providers who also offer credit products have “a potential conflict of interest”, there are no rules against doing so. Most providers upsell other products, including credit, to users of their platforms. And, to be clear, many employers have no issue with this.
However, in my experience, some employers are less comfortable directing their staff towards an app that includes other services, like credit cards or loans. That’s why we’ve taken a different approach. Unlike other providers, Level will never offer debt products to your staff.
The Level app is a toolkit containing On-Demand Pay, savings, budgeting and educational tools. That’s it. I created this company to provide workers with an alternative to debt, and I have no desire to morph into an alternative debt provider.
The John Lewis of On-Demand Pay
We jokingly refer to ourselves as the “John Lewis of On-Demand Pay”. Why? Because Level is owned and controlled by its employees; so we go above and beyond for every client and user. Specifically, this means all our clients benefit from a named team member to support them. Importantly, this team member will have a personal stake in Level, and thus a personal stake in your success.
Service matters. And, when you’re dealing with something as important as your employee’s pay, it matters even more. While we don’t expect you or your staff to have any issues, if you do, we promise it will be resolved by someone you already know and trust.
Conclusion
If you want to empower your staff with On-Demand Pay and other financial wellbeing tools, my first recommendation is to work with a platform that adheres to the Code of Practice.
Secondly, if you want to automate this and avoid adding to your payroll team’s workload, only ourselves here at Level, and Wagestream, can achieve this.
And finally, what do you want from a provider? Do you want an “employer bank” that offers a range of employer-sanctioned services, like credit cards, or do you want a more focused financial wellbeing toolkit owned by its staff? There is no right or wrong answer, but it’s an important question to ask.
Due to its rapid and continued adoption, On-Demand Pay is fast becoming a ‘must-have’. In many sectors, employers increasingly feel like they don’t have a choice but to offer it. However, you always have a choice of which provider you offer it through.
