file folder labeled Regulations (Photo: Shutterstock)

As the prevalence of earned wage access (EWA)/on-demand pay providers grows, the product they provide is gaining closer scrutiny and some calls for increased regulation.

Employees who enlist EWA services receive access to their earned wages that have not yet been paid. In this way, they do not have to wait until their employers’ scheduled paydays to receive some portion of their accrued wages. The EWA provider later recoups the money that it paid them through a payroll deduction or bank account debit when the employee’s payday arrives. Some EWA providers charge fees to customers, either via flat transaction fees or participation fees, according to Mayer Brown’s global Financial Services Regulatory & Enforcement practice blog, Consumer Financial Services Review.

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