Payroll loan company Lendly says the average loan is$1,000 and that the average employee pays it back in 26installments of $62. (Photo: Shutterstock)
Major employers are increasingly providing loans to employees inan attempt to combat the negative effects of financial stress in the workplace.
|A survey of 250 employers by the Employee Benefit ResearchInstitute last year found that 12 percent already offer workers theoption to get paid ahead of time, often for a small fee. Fourpercent of those surveyed said they plan to put in placeaccelerated pay in the future.
|Similarly, 12 percent of employers reported offering loans to workers that are repaid (withinterest) via payroll deductions. Six percent said they plan tooffer loans in the future.
|Related: Why financial wellness programs must targetlower-wage employees
|Walmart recently began offering both types of services to itsemployees. On the website for its loan program, Lendly, the companysays the average loan is $1,000 and that the average employee paysit back in 26 installments of $62. That amounts to a $1,600repayment –– hardly a good deal unless you're absolutely desperatefor cash.
|Perhaps more promising for the average employee is Walmart's useof PayActiv, an accelerated pay system that costs workers $6 amonth. The company covers the cost for one month each quarter andprohibits workers from advancing more than 50 percent of theirpay.
|PayActive is part of a financial wellness app, Even, whichencourages users to save money.
|Mary Haynes, CEO of Nazareth Home, which operates long-term carefacilities in Kentucky, told the Wall Street Journal that 338 ofthe company's 400 employees were signed up for its accelerated payprogram. Haynes said the program has helped put employees on firmerfinancial footing and reduced turnover.
|Uber, the ride-hailing giant, is also considering offering loansto its drivers. The company has reportedly sent surveys to some ofits drivers to gauge their interest in financial assistance. ForUber, however, loans are not just a way to boost retention, but maybe a way for the popular but unprofitable company to finally get inthe black.
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