Most employers are so used to paying workers every two weeks that it is difficult to consider that there may be better alternatives.
“In a world where money moves at the speed of a tap or swipe, most workers still wait two weeks -- or longer -- to access the money they’ve already earned,” said Jason Rahlan, vice president of corporate responsibility and sustainability for Dayforce. “This isn’t just a matter of convenience. For millions of people, it’s the difference between paying a bill on time and over drafting, between managing anxiety and spiraling into stress, between surviving and slipping further into debt.”
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The Freedom of Pay, a new study from the Dayforce WorkWell Initiative, looked at how pay frequency shapes workers’ lives far beyond payday. The results show that when workers can access their pay more often, they gain greater agency and control over their lives. The report identified several areas in which employees would benefit most.
- Financial health. For workers with poor financial health, small shifts in pay frequency could make a huge difference. Forty percent of all surveyed workers said increasing their pay frequency would help them manage paying bills, but this number rose to 61% for workers who rated their financial health as poor.
- Mental health. As many as 43% of all workers surveyed said more frequent pay would be very or extremely helpful to their mental health. This number rose to 55% among those who reported struggling in this area.
- More predictable spending. Workers who are paid weekly or biweekly are better able to line up income with recurring expenses such as rent, groceries, child care or prescriptions. This consistency matters, especially for families living paycheck to paycheck.
- Equity. Being paid at least once a week was especially important for Black and Latino respondents (two-thirds of whom wanted this option) and respondents younger than 30 (63%). Both groups also were more likely to report that this pay schedule would be very or extremely beneficial to their mental wellness.
Modern payroll technology makes it possible to rethink old assumptions. Employers now have the tools to offer flexible, frequent or even on-demand pay without sacrificing compliance or accuracy. For employers, moving toward more frequent pay is a tangible way they can make work life better.
“No one should have to choose between making rent and buying groceries because payday is still a week away,” Rahlan said. “It’s time to retire the outdated idea that rigid pay schedules are the norm and replace them with systems that reflect the needs of today’s workforce. Because when workers can access their money, they can also access something far more valuable: peace of mind.”
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Alan Goforth
Alan Goforth is a freelance writer in suburban Kansas City. In addition to freelancing for several publications, he has written a dozen books about sports and other topics.
