What is Earned Wage Access?

Earned wage access is a growing trend in the fintech industry.

It gives employees access to wages they have already earned through hours of work that they have not yet been paid for. 

The earned wage access service is provided directly through an employer. 

Why is earned wage access beneficial?

According to the Bureau of Labor Statistics, two-thirds of U.S. businesses pay their employees as infrequently as biweekly or even monthly. 

These large gaps of time between pay periods hinder an employees ability to budget, pay their bills on time and meet unexpected expenses. 

Fluctuations in income have been exacerbated by COVID-19 and employment changes. In response to these monetary shortcomings, employees may resort to high interest credit cards, overdrawing a checking account, or predatory payday loans, compounding the issue. 

How is earned wage access achieved?

Earned wage access is a free employer-offered benefit, not a credit service. This is because employees are not accessing amounts beyond what they have already earned. Funds are recouped through an employer-facilitated paycheck deduction.

Earned wage access is achieved via a third party servicer who connects directly to the payroll system. 

The issue for the service provider is the time and resources required to work with each employer and build out connectivity to the payroll providers in-house. 

How can Atomic help with earned wage access?

Luckily for the many companies emerging in the earned wage access space, Atomic offers a solution to the barriers of payroll connectivity. 

By integrating Atomic’s API, service providers are able to directly connect to an employee’s payroll account, guaranteeing the ability to recoup wages once the funds become available. 

There is huge value in knowing that you can connect directly to a payroll system for companies offering an earned wage access service to employees. 

If you would like to learn more about how earned wage access can benefit your company and how Atomic can help, request a demo or fill out the contact form at the bottom of this page.