Thousands of employers using ADP now have the option to offer their employees instant access to their pay.
The payroll giant announced Thursday that it has partnered with DailyPay, a company that offers a tool allowing workers access to their earning before payday. DailyPay is now available to employer customers who use ADP’s HR platform. ADP says the partnership aims to help employers “improve financial security and benefit from improved employee retention.”
The partnership is the latest signal of growth for instant pay apps, which employers are increasingly turning to as a way to help employees who struggle with financial security. Giving employees instant access to their earned wages instead of waiting two weeks between paychecks can help workers avoid expensive payday loans and avoid late fees, advocates say.
Those problems occur as more Americans live paycheck to paycheck: Nearly 20% of Americans don’t save any of their annual income, while another 21% only save 5% or less, according to Bankrate.
“Employers have become increasingly interested in offering flexible payment options to meet the needs of their workers,” says Craig Cohen, general manager of ADP Marketplace. “Historically, alternate ways to access pay early could burden the worker with interest or penalties. The DailyPay solution, now available to our clients through the ADP Marketplace, provides a responsible vehicle for accessing pay early and is simple to roll out to employees because it is integrated with the ADP platform.”
The partnership between ADP and DailyPay follows in the footsteps of last month’s partnership between HR software maker
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New-York based DailyPay offers employees 100% of their paycheck instantly; fees are paid either by employees or by employers if they offer the service as a benefit. It costs $2.99 for instant transfers and $1.99 for next business day.
DailyPay works directly with about 100 companies, including Sprinkles, Vera Bradley and Westgate Resorts, but the ADP partnership will open the program up to thousands of more employers.
21c Museum Hotels — a Louisville, Kentucky-based combination contemporary art museum and boutique hotel chain with 1,200 employees — has “seen an increase in recruitment and improved employee retention,” since implementing DailyPay to its employees earlier this year, says Andrew Lotter, its director of human resources.
The company has seen a 10% decrease in turnover since implementing DailyPay in the spring. It’s also a big win among employees, a survey of 21c Museum Hotel employees found: 86% said DailyPay has helped them pay bills on time, and 42% say DailyPay motivates them to go to work.
