Earned Wage Access (EWA) is a financial service that allows employees to access their earned wages before their regular payday. This is often facilitated through a platform or app, which connects to the employer's payroll system to track how much the employee has earned at any given time.
Here's a basic overview of how it works:
Work Performed: The employee works their regular hours. The EWA platform tracks these hours and calculates the wages earned.
Request for Access: If the employee needs access to their wages before payday, they can make a request through the EWA platform.
Funds Transferred: The EWA platform then transfers the requested amount to the employee. This can often be done instantly or within a few hours.
Repayment: The transferred amount is then deducted from the employee's next paycheck.
EWA platforms can be beneficial for employees living paycheck to paycheck, as they can provide a safety net in case of unexpected expenses. They can also help to reduce reliance on high-cost payday loans.