Earned Wage Access 2023: Impact on Retention & Hiring

earned wage access definition

Earned wage access (EWA) goes by many names — early wage access, on-demand pay, daily pay benefit — but essentially they all refer to the ability for an employee to access the money they’ve earned before their scheduled payday. 

The earned wage access industry is relatively new. Two years ago, very few companies had even heard of it. Today, it’s not a question of whether a company will adopt the benefit but rather when. More employers are considering earned wage access as a benefit for employees, many of whom want greater flexibility in how they are paid. About 25% of payroll professionals said in recent surveys that on-demand pay is a must-have solution for improving the employee experience, which is a top priority in 2020.  

But this isn’t just a trend for the gig economy. Instant-wage access could spread across the income spectrum in the post-pandemic economy.

According to DailyPay research, the last ten years have produced a tectonic shift between quits and layoffs. Quits are up 102% and layoffs are down 23%. But rather than seeking early retirement, most workers are simply “rotating” into new positions that offer better pay and benefits.  

A March 2021 Mercator Advisory Group report analyzed data to showcase how motivating and keeping employees can be a boon to workers – and have a significant economic impact for organizations who adopt it. 

Mercator states that financial peace of mind creates a better employee experience, from more positive interactions with co-workers and customers, to more equitable work-life balance. Employees are less stressed and stay longer with a company, regardless of industry.

The findings revealed that the use of DailyPay increased the number of days on the job in all 10 industries. As the chart below indicates, earned wage access had the greatest impact on the tenure of nursing home, transportation, and freelance or on-demand employees:

earned wage access reduces turnover

EWA can be a great win-win solution for both ends — the employees and employers. The employee gets paid early and the employer secures workplace satisfaction which grants productivity. There are plenty of benefits for both employers and employees and, with the right vendor, there is no risk involved to companies who choose to offer it.

According to the 2022 Research conducted by ADP, nine out of ten employers are aware
of flexible payment options such as EWA. Currently, 4 out of 5 employers offer EWA to employees and among those who don’t, the majority are interested in doing so.

Dive deeper into the importance of on-demand pay.


Benefits to Employers

Currently, earned wage access is offered by just 5% of large U.S. companies with a majority of hourly-paid workers, according to the Society for Human Resource Management. However, that figure is expected to jump to 20% by 2023.

For employers, earned wage access can attract workers and improve employee retention. According to a survey by PWC, EWA boosts employee retention by approximately 36%.


Financial wellness refers to a person’s overall financial health and is one of many factors that makes up employee wellbeing. Financial stress can impacts a person’s health, so it is connected to the overall wellbeing.

According to a PwC employee financial wellness survey, one in four employees has been distracted at work by personal finance issues within the past year. Of those who responded that they were distracted, nearly half spent three or more working hours thinking about or trying to handle or resolve the problem. A Federal Reserve study found that over 40% of adults would not be able to cover an emergency expense of $400 if one arose. 

The current state of employee financial wellness is dire. Workers are seeking solutions from employers. Financial stress doesn’t just cause a decrease in productivity — it could lead to lower levels of pay satisfaction from employees, increased absenteeism, and increased turnover rates.

Here are some of the benefits employers have experienced as a result of offering a daily pay benefit:

  • 1.9x increased in applicants to a job that offers on on-demand pay benefit
  • 50%, on average, reduction in turnover
  • 49% average increase in employee productivity
  • Ability to fill open positions in less than half the time (52% faster)
  • 26% reduction in absenteeism
  • Applicants are 13% more likely to apply for a lower-paying job with on-demand pay

In addition, an earned wage access solution can be implemented without any changes to current payroll processes, including the timing of funds or withholding of taxes. Offering an on-demand pay benefit solution to employees also increases employee engagement, with 73% of employees stating that their opinion of their employer had improved as a result. 

Benefits to Employees

The benefits of having access to their earned wages are equally impressive for employees. At a time when 78% of all American workers are living paycheck to paycheck, the ability for an employee to access their earned income when they need it, before payday, is essential.

With access to their earned income, employees can close the gap between paychecks, pay bills on time and avoid overdraft fees, late fees and high-interest predatory payday loans. They can also meet unexpected expenses, like emergency medical care and car repairs, reducing financial stress and increasing financial health.

With access to their earned wages, employees can save up to $1,205 per year, on average, in overdraft fees, late fees and fees and interest associated with payday loans. In addition: 

  • 85% of users say access to their earned wages makes them more able to budget and pay large monthly bills like rent, utilities, car payment, etc. 
  • 78% of users say access to their earned wages helps them pay their bills on time and avoid late or overdraft fees
  • 74% of users say access to their earned wages has helped reduce their financial stress
  • 70% of users say access to their earned wages has helped them avoid taking out a payday loan
  • 59% of users say access to their earned wages motivates them to go to work
  • 51% of users say access to their earned wages has helped improve their financial health
  • 50% of users say access to their earned wages has helped  them be more disciplined about spending
  • 46% of users say access to their earned wages has helped them save more

This latest research report, On-Demand Earned Wage Access: U.S. Vendor Comparison, gathered data about key players in the on-demand pay industry, including Acrisure, Blue Yonder, Branch, DailyPay, Dave, Delaget, Earnin, Evolve Bank and Trust, FlexWage, Instant Financial, Kronos, Mastercard, PayActiv, The Clearing House (TCH) and Visa. 

On-demand-pay has swiftly become a “need to have benefit”.

With benefits like these, earned wage access is proving to be a real game-changer for both employers and their employees alike. According to ADP survey, workers tended to underestimate how often they would use EWA, as compared to how often they do when it is made available for them to access. Thirty-seven percent of employees who do not have access to EWA, estimated they would request an early payment only when a specific need occurred. One-quarter would use EWA 1-6 times a year, while 20% suggested they might use it every or every other pay period. In reality, the majority of employees who have access to EWA indicate they request early access every or every other pay period (62%). Nearly a third said they used it one to six times per year, and only 7% indicated that they used EWA only when a specific need occurred.

What Does the Best Earned Wage Access Provider Look Like? 

Any business that is considering offering a daily pay benefit, needs to do their due diligence when it comes to choosing an earned wage access provider who adheres to rigorous compliance standards

Getting access to earned wages has taken on new meaning during the COVID-19 pandemic, with millions of people scrambling to make ends meet. 

In May 2020, DailyPay enlisted Mercator Advisory Group to conduct a survey of 1,000 U.S. low-income (income less than $75,000/year) salaried workers to determine the value and propensity of this demographic to participate in an on-demand pay (also called earned wage access) solution.

While much has been done to study hourly workers and their vulnerability to financial stress, far less has been done to study salaried workers and how they react to the challenges imposed by unforeseen financial hardships in between paychecks.

This study revealed that, by introducing an on-demand pay benefit, employers can help their workforce reduce the stress associated with paying monthly bills. Most notable and relevant today, nearly half (46%) of those polled are stressed by having to pay monthly medical bills. Allowing workers access to their earned income provides them with financial flexibility, and empowerment over their pay reduces their stress and increases attendance and productivity at work, all at no expense to the employer.

The Consumer Financial Protection Bureau issued two groundbreaking notices at the end of 2020, both involving earned wage access. These releases have provided regulatory certainty for one specific provider while potentially heightening regulatory uncertainty for the others.

The CFPB’s Advisory Opinion provides the following compliance criteria in order for an EWA provider to be exempt from the Truth-in-Lending Act so that the EWA product will not be considered a loan.

DailyPay’s model is not impacted by either the November or December CFPB EWA opinions. DailyPay has never used the wage deduction method, and does not need to rely on any such exemption. These exemptions only apply to providers that could be deemed to be extending credit. DailyPay has never and will never require any form of employee payback and thus does not fall within the purview of either opinion.

Honored as Fintech Company of the Year and Gold Standard in the On-Demand Pay Industry, DailyPay is trusted by hundreds of companies, including Kroger Co, Six Flags Entertainment, Berkshire Hathaway Inc., and millions of employees, to deliver their on-demand pay benefit.

So how does on-demand pay from DailyPay stack up against other major earned wage access providers in the market?

The following table provides a fact-based evaluation of earned wage access vendors for your consideration.

best EWA providers


Fact-based evaluation of earned wage access vendors

To sum it all up, in order to positively impact the business, a company must engage in the well-being of its employees. An Earned Wage Access is a powerful component of financial wellness solution. It allows flexibility by letting employees receive their earned money earlier than usual. When used correctly with a right EWA partner, it strengthens overall employee engagement, improved retention, reduces turnover and increases productivity.

What’s the future of Earned Wage Access? We are smack in the middle of the “on-demand generation” right now. Everything from media to food is expected instantly, and banks need to connect with customers who want the same speed and control with their money. Most employers will offer EWA in the next three to five years and, with DailyPay’s recent white label partnership with PNC bank, this is only the beginning.


Earned Wage Access is a must-have benefit

Partners with DailyPay gain access to proprietary on-demand pay capabilities including PAY, the flagship program giving employees earned wage access prior to payday. There are three “flavors” of marketplace partnership to choose from: 

  • White label partnership 
  • White label + card platform 
  • Embedded application programming interfaces (APIs) for retail and digital bank accounts 

Looking for earned wage access for your employees?


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