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For decades, employers have controlled when workers get paid—and employees have largely accepted biweekly or monthly paychecks as a fact of working life. But now, a younger workforce is questioning the rationale.
The quiet justification for many employers has been concern over that workers might not manage their money responsibly if given faster access to it, said Andrew Brandman, COO of DailyPay, a tech company that gives employees access to their earned pay before payday. But in an economy built around immediacy, employers may be concerned with the wrong thing.
The rise of the gig economy has reset expectations around pay, with workers like Uber drivers able to access their earnings as soon as a job is completed rather than waiting until the end of a shift, Brandman said. “I hear this from employers all the time: they’re competing for a workforce now that’s looking for instant,” he said.
Currently, only 3% of employers offer this type of instant paycheck access, known as earned wage access, according to the International Foundation of Employee Benefit Plans.
But worker demand is already substantial. Roughly 10 million workers tapped some form of early wage access in 2022, moving nearly $32 billion, according to a 2024 Consumer Financial Protection Bureau study. Three million of them bypassed their employers entirely and used consumer apps, though nearly all workers paid a fee for expedited access to their funds, the CFPB found. (Most employer-partnered earned wage providers offer both free and fee-based options for employees to receive wages).
It’s not just hourly workers demanding this benefit. Brandman says he’s seen an increase in higher-wage workers using his platform. “There’s this misnomer that if you’re salaried, you must not be living paycheck to paycheck,” he said.
The solution? More communication. Firstly, HR leaders should strive to talk to their employees about the benefits they need and understand the rationale behind it, Brandman said. But more importantly, they should be talking to their fellow CHROs or CPOs about pay and why it’s been a workplace category that hasn’t changed in decades.
“What we see is when employees feel like they’re covered, that the employer’s got their back, they feel a different connection,” Brandman said. “Suddenly you get a workforce that’s way more engaged.”
Kristin Stoller
Editorial Director, Fortune Live Media
kristin.stoller@fortune.com
This story was originally featured on Fortune.com
