Earned wage access (EWA), also known as on-demand pay, has become a fast-growing workplace benefit that allows employees to tap into their wages before payday. Once seen as a niche solution, EWA exploded in popularity following the pandemic, with more than 55 million Americans now using the service. Several companies such as Amazon, Uber, Walmart, and McDonald’s have adopted the program to attract and retain talent, especially for hourly workers.
EWA is appealing because it can offer short-term relief, especially for those who are vulnerable to living paycheck-to-paycheck or who find themselves facing an unexpected expense. Women are especially at risk: According to a report by Varo Bank, 59% of women live paycheck to paycheck compared to 41% of men, and among those deemed financially fragile, a staggering 67% are women.
Given that women are more likely to experience financial instability due to factors such as wage disparities, caregiving responsibilities, and part-time employment, they are more inclined to utilize EWA services to manage short-term financial needs.
How ‘Earned Wage Access’ Works
EWA is a corporate benefit that allows employees to get early access to a portion of their wages that they have already earned. An employee uses a mobile app or software connected to their employer’s payroll system and that links to their bank account. On request, they can access a portion of their earned wages—typically up to 50%—before payday.
There’s often a service charge, typically a flat fee or a small percentage (2%) per transaction, which if not careful can add up quickly. For example, five $3 transfers per week could cost someone $780 a year—nearly the same as high-interest payday loan fees.
The Pros, Cons and Considerations of EWA
Providing employees timely access to their earned wages can, in some circumstances, help reduce financial stress and support better mental well-being. For those who find themselves stretched, EWA gives them the ability to manage unexpected bills, flexibility in paying things like rent or car loans that may not align to a companies’ pay cycle and avoid costly payday loans or overdraft fees.
However, despite the belief that it gives workers “financial control”, earned wage access can be a double-edged sword. It’s a lifeline during emergencies for some, but for those without a budget or savings plan, it has a high potential of promoting poor money management skills. It is often a band-aid solution that doesn’t address underlying behaviours, beliefs or in the case of women – structural challenges such as the gender pay gap, the pink tax or career interruptions. Over time, chronic cash flow issues are guaranteed to even lead to delayed retirement savings, productivity problems and retention issues.
The Crucial Role of Financial Education
Many employers see EWA as a way to support financially stressed workers, and as a differentiator but relying on it without coupling it with financial education is like putting a bandage on a wound that needs stitches. It may stop the bleeding in the short-term, but it won’t heal the deeper issue.
This is where financial education becomes a powerful supplement. Teaching employees how to budget, prioritize spending, build savings, and plan for longer-term goals such as retirement will transform a short-term solution into a long-term, sustainable financial wellness. When employees understand their financial picture and learn key skills on how to reach their goals, they’re much less likely to misuse EWA.
Other Important Links-
https://saijelle.com/blog/why-corporate-women-need-financial-education-building-wealth-beyond-your-paycheck
https://saijelle.com/blog/six-smart-money-moves-transforming-financial-goals
In fact, financial literacy programs designed with women in mind can help bridge income and wealth gaps that often arise from factors like career breaks, caregiving responsibilities, and limited exposure to investing. Companies that invest in gender-smart financial training alongside EWA don’t just reduce employee stress—they gain a more financially resilient workforce, improve retention, and foster loyalty.
Ultimately, it’s not a question of offering earned wage access or financial education—it should be both. EWA provides breathing room when used properly. But financial education gives employees the tools to stop living paycheck to paycheck. For women facing the intersection of pay inequity and financial pressure, that combination can be life-changing.
Learn how Saij Elle/Saij Wealth Consulting can help your company build an impactful financial wellness solution today. Contact our team for a free consultation.