This is the fifth and final post in our five-part Q&A series addressing your questions from our recent seminar with the APA. These are your remaining questions, which span a range of topics.
1) You list reduction of paper checks as a benefit, but aren’t most organizations using direct deposit now?
82% of employees are currently paid via direct deposit, according to a study by NACHA. That means there are still almost 1 in 5 employees to convert to digital processes. DailyPay provides an incentive for those employees to register for direct deposit in order to use our technology. As an example, one of DailyPay’s partners saw paper check usage decline by 40% in just 8 weeks.
2) We already have most employees on Direct Deposit and do not offer pay advances. Are there still additional cost savings we would experience?
There are a number of benefits our Partners experience after implementing an on-demand pay benefit. A few key stats we have gathered from DailyPay Partners include:
For your business:
- Reduction in turnover (average of 41%)
- Partners filled open positions in half the time (52% faster)
- Reduction in absenteeism (average of 26%)
For your employees:
- 72% of employees feel more in control of finances
- 77% feel less financial stress
- 83% say it helps them pay bills on time and avoid late fees
- 79% of employees use DailyPay to track their earnings
- 62% of employees state that DailyPay has helped them to avoid taking out a payday loan
3) Does any employee who wants to use DailyPay need to be on a timeclock, and will their timecards need to be approved daily?
DailyPay can accommodate both hourly and salaried employees. For hourly workers, we work with employee-reported time data from the TMS. We do not require the employer to approve hours on a daily basis.
There are two ways we accommodate salaried employees:
- If your TMS system is able to convert salaried earnings into an hourly equivalent, we will receive the hourly equivalent income in the Gross Earnings file.
- If your TMS system is not able to convert earnings into an hourly equivalent, we receive the one additional field on the User Roster: the Annual Salary. We then estimate the hourly equivalent income ourselves.
4) In the alternate direct deposit method how much does the company have to pre-fund DailyPay to allow this to occur?
In DailyPay’s Alternate Direct Deposit model, our company Partners do not have to prefund anything; DailyPay fronts the advance and assumes the risk.
5) How are the employees hours being verified? Are they just submitting and getting advances blindly, or is a supervisor confirming the time?
The employees are not inputting the hours themselves. Rather, they are fed directly to DailyPay through your company’s time management system. As long as an employee is punching in and out honestly and accurately for shifts and breaks, the hours should be correct. There are also safeguards in place to ensure that mistakes, such as staying clocked in for 24 hours because of a forgotten punch out, are flagged in our system and that employees cannot make transfers based on those errors. There are no instant notifications to alert supervisors when transfers are being made, but they are welcome to sign into the employer dashboard and view that information at any time if they so choose.
6) I perform implementations for ADP, and DailyPay is now being offered to our clients. Is there an implementation checklist for your offerings?
There is no “one size fits all” checklist, but DailyPay has a dedicated implementation team that begins the process by running a full diagnostic of your system’s capabilities. Once that has been determined, DailyPay will work with your team to develop the four files needed to make the service work and begin implementation.
7) Does DailyPay work with staffing/temp agencies?
Yes, we do. We simply sit on top of the agency’s payroll system like we would for any other company. Because it is possible for employees to have multiple pay rates within DailyPay, it is easier for them to have the pay rates for various roles they may be working through the agency saved within the system.
8) Can DailyPay be used for issuing surprise bonus checks that are currently issued manually?
Depending on the type of payment, you could send these payments through the DailyPay platform via an off-cycle payment.
9) How does DailyPay work with on-site payroll deductions, such as employee meals or merchandise purchases?
DailyPay creates a personalized profile for every user that accounts for differences in their net pay profile, which can be built to include these elective deductions. The DailyPay advance rate is dynamic, meaning that as the pay profile of an employee changes, the advance rate will change to accurately reflect the net pay owed to the employee. This enables the user to enjoy continuous, full access to the product, even if they have a non-standard pay profile (e.g., garnishments, deductions, benefits in arrears). The dynamic advance rate accounts for these unique employee considerations by adjusting the amount made available to the employee in the Available Balance so that amount will be net of these adjustments. The dynamic advance rate enables the employer to offer the benefit on a universal basis and not restrict access to only employees with certain pay profiles. DailyPay is the only provider who offers up to 100% of net income to salaried employees.
10) When using the deduction model, can the employer limit the amount the employees are able to receive?
Under both the deductions model and the company-funded model, the advance rate does not dynamically adjust to account for the impact of changing benefits, relying instead on a static 50% advance rate. Thus, in the event of a change to an employee benefit that brings an employee below 50% of his/her net pay, the system lacks the flexibility to account for the change. In the deductions model, (1) you could find yourself in the position of owing the vendor money or (2) in the best case, manual work will be required of your payroll team to avoid owing money to the vendor. In the company-funded model, you will also be at risk of over-extending your funding and overpaying the employee.
In the DailyPay model, our system creates a personalized profile for every user of the product which accounts for differences in their net pay profile. This profile informs what we call the advance rate (or net-to-gross pay ratio). DailyPay is unique in that we are the only vendor that creates this personalized profile for each employee. The DailyPay advance rate is dynamic, meaning that as the pay profile of an employee changes, the advance rate will change to accurately reflect the net pay owed to the employee. This enables the user to enjoy continuous, full access to the product, even if they have a non-standard pay profile (e.g. garnishments, benefits in arrears). The dynamic advance rate accounts for these unique employee particulars by adjusting the amount made available to the employee in the Available Balance such that the amount made available to the employee will be net of these adjustments. The dynamic advance rate enables the employer to offer the benefit on a universal basis and not restrict access to only employees with certain pay profiles.