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Everything You Need to Know about Restaurant Early Wage Access Technology

EWA

Financial stress is a significant mental burden that can lead to mental health issues, burnout, absenteeism, and employee turnover, but early wage access can help alleviate these issues for restaurant workers.

78% of Americans live paycheck to paycheck according to a Forbes study, and restaurant employees are no exception, many of whom have limited or no emergency savings. Due to the COVID-19 pandemic, restaurant workers faced unemployment, restaurant closures, and inconsistency in hours, which further hurt their personal finances. According to a survey completed by QSR Magazine, 84% of restaurant workers had less than $500 saved for an emergency, a 6% increase from 2020, and over half (51%) had nothing saved, an 11% percent increase. 

Financial stress is a significant mental burden that can lead to mental health issues, burnout, absenteeism, and employee turnover, but early wage access can help alleviate these issues for restaurant workers.  

Offering early wage access can improve the restaurant employee experience, increase financial stability, and improve retention. According to a PwC employee financial wellness survey, one in four employees were distracted at work by personal finance issues in the past year and 54% said financial or money matters caused the most stress. By providing early wage access, employees can reap the benefits of greater financial flexibility and stability. 

What is Restaurant Early Wage Access?

Early wage access (EWA) products, which may, depending on the features, include products known as earned wage access, on-demand pay, and instant pay, refers to products that give an employee the ability to access their wages prior to their scheduled payday. This is a relatively new concept, but it’s not just a trend from the gig economy, and it can be beneficial to offer permanent staff more flexible pay. With early wage access, employees can withdraw a certain amount of their pay after every shift, providing them with unprecedented flexibility and control over their personal finances.

With early access to their wages, restaurant employees can close the gap between paychecks, pay bills on time, avoid late fees, overdraft fees, and high-interest payday loans. They can also be prepared to pay unexpected expenses, like emergency medical bills and car repairs, which will reduce financial stress and increase financial health. 

Benefits of Early Wage Access for Restaurant Employees

  1. Flexible Pay Schedule: Employees can control when they are able to access money they’ve earned and better align their pay dates with their personal financial commitments. 
  2. Financial Security: Employees can access emergency funds if a sudden bill or expense arrives, without incurring more debt and pay bills on time to avoid late or overdraft fees. 
  3. Increased Savings: Employees have more visibility into their wages and spending, helping them monitor their spending and increase savings
  4. Motivation to Come to Work: Employees feel the benefits of flexible pay, reducing their stress and increasing their attendance and productivity at work.

Benefits of Early Wage Access for Restaurant Owners

  1. Attract Employees: Early wage access is a differentiator in a competitive labor market and can nearly double the pool of applicants and increase the speed of hiring.*
  2. Retain Employees: Reduce turnover as employees who take advantage of early wage access benefits may be less likely to leave and seek other opportunities as they will feel more secure with reduced financial stress.
  3. Increase Employee Productivity: Eliminating financial burdens will increase employee focus and productivity and help employees feel more valued as a result of this benefit.*
  4. Reduce Absenteeism: When an employee can see the impact of a day’s work in numbers, they’re much less likely to skip a shift unless it’s completely necessary.*

Keep Employees Happy with Early Wage Access

Early wage access is a prized benefit for restaurant employees, providing them with more flexible pay and increased financial security. As a restaurant owner, this is a no to low cost benefit to offer. When employees feel valued at work, they are more productive, happier, and more reliable. As the restaurant industry recovers, retention is going to be a key to solving the labor challenges ahead, and offering benefits like health insurance and early wage access will be a differentiator to attracting and retaining restaurant workers.  

This article is for informational purposes only; product features may vary by provider and/or service.

*According to a report put out by the Mercator Advisory Group in March 20201: Modernizing Payroll Through Earned Wage Access: A Focus on Employee Tenure

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