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Payroll Pointer Thinking about giving your employees early wage access? You may want to put a pin in that if you employ in Connecticut or California. Recent reports say there will be a bill in those states to clarify whether early wage is different than a pay day loan. Before taking the time to implement a program like this, you may want to pause until all the wrinkles are ironed out. #payroll #payrollmanagement #earnedwageaccess

Earned wage access (EWA) is a somewhat expensive service for hourly or low wage workers to gain a subset of their earnings nearly as soon as they have earned them. These apps are even offered as "benefits" by some employers. Be very sure that you understand the costs AND benefits before you use the service.

A recent Center for Responsible Lending report on earned wage access (EWA) paints an incomplete picture. While the direct-to-consumer model might have drawbacks, employer-based EWA offers a valuable tool for many workers. Here's the reality: EWA allows access to a portion of already earned wages before payday, reducing reliance on expensive payday loans and overdrafts. Research by the Innovative Payments Association shows that 63% of EWA users with employer-based models report using payday loans less often. But don't just take our word for it. A recent Financial Health Network study quote perfectly captures EWA's value: "I have tried payday loans, credit cards, car title loans ... Getting advanced wages I have earned through my employer is actually the safer alternative." EWA is a game-changer for many, providing a safety net for vulnerable consumers facing income volatility. Unlike predatory payday loans, EWA allows access to already-earned wages without incurring high fees or interest. An incomplete analysis of EWA could lead to regulations that harm consumers by limiting access to this valuable tool. Let's have a full conversation about EWA. One size doesn't fit all, and employer-based EWA can be a financial wellness benefit for many workers. For additional information, read Ben Jackson's lastet blog post https://lnkd.in/gNQg2juK #FinancialInclusion #EarnedWageAccess #FinancialLiteracy #ConsumerChoice

Who wants to turn an established #Payroll business practice into an onerous, less beneficial experience for employers and employees? Check out how programs successfully providing earned wage access, or on-demand pay for nearly 10 years would need to fundamentally change under a new proposed rule. https://lnkd.in/epYMzh3T

The Consumer Financial Protection Bureau (CFPB) announced a proposal to classify payroll advances as consumer loans, subjecting them to the Truth in Lending Act's regulations. This move aims to prevent delays in workers receiving pay and mitigate debt cycles. The rule could disrupt the earned wage access industry, particularly for companies that charge fees or request tips. Employers offering free, fee-free advances will be exempt. The interpretive rule is open for public comment through August 30. #HR #HumanResources #Payroll #TotalRewards #CFPB #TruthinLendingAct

CFPB says "Earned Wage Access" apps are actually lenders. My google alerts are lighting up with this development and the internets are posting articles about it all over the place. Earned Wage Access has been dominating without having to be licensed in states where they operate, and without having to work with a myriad of different state rules and regs. So now they may be deemed lenders and have to get licenses. Aside from lower costs compared to most payday services, one of the biggest selling points of Earned Wage Access is the simplicity and ease that workers can simply grab some of their money earned but not yet been paid. A couple clicks and the money is in the account. If Earned Wage has to get licensed in the different states, that means loan agreements, disclosures, payment schedules, minimum terms, maximum terms, rate caps etc. Wondering how that will impact the user friendly experience and the low cost. I did see EarnIn pulled out of Connecticut in after caps were placed on what they could charge there. What about Texas? How will the APR's work? If Earned Wage wants to operate in Texas above the Chapter 342 allowable rates then that means CSO/CAB model? I see Earnin billboards all over City of Austin so now will they have to abide by the City of Austin Payday Loan Ordinance terms too? Going CSO/CAB plus abiding by the ordinances could be much more complicated than what Connecticut put in place to regulate. Consumers like the app function, the cost, and the simplicity. The tech option on payday services is the way of the future this is just another time when companies will need to evolve. Regulation was absent in the early days and now the industry achieved scale and regulators are knocking with the consumer advocates alongside. CFPB comment period is open now until August 31st. I am not sure what happens after the comment period is over or if any potential effective dates are out there. Questions - will there be lawsuits? Will that delay any effective dates on this rule? Will states escalate and start writing more bills in the legislatures? Will some folks wind down their Earned Wage Access companies? The more access to credit the better, the less rules and restrictions the better. Will see which way this one goes!

Looking for a way to help your employees? "Research shows that employees with earned wage access are better equipped to pay bills on time and avoid the endless cycle of debt. According to data from Arizent, nearly 7 in 10 users who previously paid late fees do this less often or have stopped completely since using DailyPay. Moreover, 62% of users who previously incurred credit card interest charges do this less often or stopped completely since they started using DailyPay."

The paycheck that you know of currently today is undergoing MAJOR disruption, and the disruption is Earned Wage Access! Earned Wage Access (EWA) is gaining momentum in the US, with major corporations like Walmart and Amazon already offering in-house EWA programs for their employees. EWA allows employees to collect their pay at the end of each workday, providing a solution for those who run out of money before the end of the standard pay period. The Consumer Financial Protection Bureau has also announced that it will be issuing federal guidance on EWA soon. This is encouraging news for proponents of EWA who believe that it can help scores of Americans cover daily expenses such as food, gas, and utility bills. Are you excited about the future of EWA? Share your thoughts in the comments below. #EWA #paycheck #financialinclusion #chro #cfo #ceo #cio #workday #onesourcevirtual #payondemand.

See how we combined Paycheck Protection Program (PPP) Loan Data with Department of Labor Wage & Hour Compliance Data in seconds. Explore the joined datasets and try it yourself with Placekey! https://lnkd.in/eX2ywfTe

If you are accustomed to the ability to gain access to wages immediately or early (also known as earned wage access, daily pay, instant pay, accrued wage access, same-day pay and on-demand pay) there may be changes forthcoming. The Consumer Financial Protection Bureau proposed a rule that would label paycheck advance programs as loans, if users are charged a fee. Under the proposed rule, users would see fees expressed as an APR, like credit-card interest rates. #employeepay #wages #consumerlending #workforcetrends #employeetrends https://lnkd.in/gX5bKpFv