Getting paid every two weeks is a legacy of the the 1930s, a result of the tax regime and the desire to deduct taxes and union dues from paychecks which was hard in a world pre-computers. Today the technology exists today to pay employees on a daily (or hourly) basis, and yet today most employees are still paid every two weeks, essentially extending employers a 0%. Waiting two weeks between paychecks is a long time, particularly for low wage workers. But technology and a tight labor market could be changing that. This NPR piece goes into some of the challenges and solutions employers are trying to use to benefit their workers.
GONZALEZ: That's Shoukat Dhanani (ph). Around 2 1/2 years ago, the labor market started getting tight. Employment was high. Basically, everyone had a job. And Dhanani says it started getting hard to find workers.
DHANANI: We had a restaurant we were opening in Stoughton, Mass., and the restaurant sat there ready to open for three months because we couldn't get enough staff to open the restaurant.
GONZALEZ: So Dhanani starts offering perks.
DHANANI: We've got an aggressive bonus program. We rolled out 401(k)s. We've raised wages.
GONZALEZ: And then he hears about an app that gives workers access to their earned wages daily - DailyPay. Dhanani told employees at 100 of his New England Burger Kings, try it if you want. See what you think.
More and more, employers are starting to care about employees financial wellness. particularly given the high cost of replacing an hourly worker. Delivering value added solutions for employers through partnering with companies built to solve this problem like Even, DailyPay and Earnin is a no brainer to me. There are tremendous amounts of opportunity to support both employees and employers. I'm sure we'll see more companies emerge to fill this gap.Read more...