Sam O’Sullivan , policy lead at the Charter! Institute of Payroll Professionals
Sam O’Sullivan is policy lead at the Charter! Institute of Payroll Professionals (CIPP). In this role Sam maintains relationships with government departments and ensures members’ voices are heard.
In my role as policy lead for the Charter! Institute of Payroll Professionals (CIPP), I’m lucky to attend lots of events and build relationships with external stakeholders. One of the hot topics of conversation right now is ‘pay on demand’ (POD) or ‘earn! wage access’.
In this blog, I hope to sh! some light on what this is and how it’s perceiv! within the payroll industry. I’ll also consider the effects it could have in the current cost of living crisis.
Cost of living crisis
Many employers are looking at solutions to help their employees through the current economic climate. Employers too are feeling the pinch, and increasing wages is not always a viable option, especially for smaller employers.
Pay on demand could be something employers wish to consider implementing, to allow employees to access their earn! wages before their usual pay day.
This should always be introduc! alongside other financial wellbeing initiatives, like financial !ucation, and signposting to bodies like The Money and Pensions Service.
What is pay on demand?
Pay on demand allows employees to access money they have already earn!, before their usual pay day. This means they really can access their pay on demand.
There are a number of providers and models, and each works slightly differently. But the principle is the same, regardless of which provider an employer decides to use.
Employers must
follow National Minimum Wage law
give clear advice to employees
make employees aware of any charges
Example of someone using pay on demand
If we look at a working example, let’s say John gets paid on the 25th of every month. On the run-up to his family holiday in August, he works overtime to get extra holiday spending money.
He works overtime on 4 August. Usually he would have had to wait until his brazil phone number library September pay day to receive this money, as his employer pays overtime a month in arrears.
With pay on demand, John could receive his overtime pay early on 5 August, by paying a small percentage fee.
What do people think about pay on demand?
There are supporters and critics of this new solution. It’s creating a debate and how to set up channels on your asus discussion in the payroll industry. Both sides have rais! key issues employers ne! to review before they consider offering this benefit atb directory to their employees.
