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Early access to pay providers - earned wage access

Has anyone had any experience of early access to pay providers good or bad? AKA Earned Wage Access

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Hi, I'm working for a client that is looking at using a 3rd party provider for wage advances, whereby employees can access a % of their pay during the month as they earn it rather than having to wait until pay day at the end of the month (up to 50% of earned pay).

I'd like to know if anyone else has had any experience of this, good and bad.  

Any recommendations or ones to avoid would also be welcome.  

Thanks in advance

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Danny Kent
By Viciuno
11th Nov 2021 21:04

Can the employer administer a similar scheme?

I've no experience of these wage advance companies but I'd imagine they would levy some (unjustifiably high) fee on these advances. If its just a few employees should be fairly easy to administer.

Slippery slope though these payday loan companies - if the employer really wants to help the employee could they be moved to a weekly/fortnightly payroll scheme?

Quick google and Martin Lewis has something on his website - https://www.moneysavingexpert.com/loans/salary-advance/

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Replying to Viciuno:
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By Hugo Fair
12th Nov 2021 00:42

"Can the employer administer a similar scheme?"
No - or at least not in the most obvious/simple way (i.e. by paying 'advances') ... unless they are prepared to process all these through RTI on/before each day on which even one such payment is made.
Of course you could compromise, as per your suggestion, by moving to a weekly Payroll - but a) that's a lot of faff/cost for ER, and b) it won't suit all employees.

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Replying to Viciuno:
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By yoyo321ski
12th Nov 2021 10:33

Unfortunately administrating such as large scheme is not the route we want take, we'd prefer to leave it to the experts and concentrate on our core purpose.

It's not just a few employees otherwise, yes we'd do it ourselves. Fees are pretty small in comparison to pay day lending or bank overdrafts.

Thanks for your feedback though, always good to get a different viewpoint.

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By Wanderer
12th Nov 2021 07:08

yoyo321ski wrote:

Any ...... ones to avoid would also be welcome.  

Greensill Capital
https://www.theguardian.com/money/2021/apr/01/greensill-wage-advance-app...
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Replying to Wanderer:
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By yoyo321ski
12th Nov 2021 10:30

Thanks for this, I wasn't aware of this. Worth noting, didn't realise Greenshill's involvement was so wide and varied.

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By Leywood
12th Nov 2021 07:24

Get them to take some social responsibility and train their staff in how to budget and eventually save.

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Replying to Leywood:
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By WhichTyler
12th Nov 2021 08:55

And maybe pay them a little more?

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Replying to Leywood:
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By Wanderer
12th Nov 2021 10:07

Don't disagree with your sentiment however easier said than done in some cases.
Like when they changed the Housing Benefit rules to pay it to the claimant rather than the landlord. Whole idea was to give the claimant a sense of responsibility for their own affairs etc.
Actual result is the landlords didn't get paid and many will no longer let to tenants on benefits.

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Replying to Wanderer:
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By yoyo321ski
12th Nov 2021 10:29

Agreed, easily said than done. Unfortunately you can't always control other people's actions or financial situations. We're just looking to give them some assistance for emergencies and also comes with financial education backed by a debt charity.

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By johnt27
12th Nov 2021 16:50

I only touch Wagestream in this space, Revolut have just entered the market but a long way down the recommend list...

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By djn
18th Nov 2021 11:53

Sounds like a recipe for disaster to me.

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By LAS01
22nd Nov 2021 11:58

We have used Hastee (www.hastee.com) and it mostly works. The set up is a bit fiddly as it can be for any new software app. Once set up, individuals are sent an invite and, if they are interested, can download the app and access the funds of up to 50% of net pay - which Hastee worked out. The first £100 per payroll cycle is free for the individual each month, then it's something like 2.5% per transaction thereafter. The advance and fees charged are between Hastee and the individual. The employer gets a summary of advances by staff including the % charge just before payroll processing deadline; employer deducts from the employee's payroll and Hastee take it as a DD on the pay day from employer's bank. So employer didn't have to advance any funds themselves and it's not treated as a payday loan for the staff member. As for better budgeting/cash control by staff - I don't disagree with the principals expressed but not everyone can work on payment monthly in arrears (as we didn't operate weekly/fortnight payroll). So if this helped the staff member, then the employer just helped facilitate the process.

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