5 On-Demand Pay Frequently Asked Questions
Employee expectations are shifting rapidly. The traditional monthly pay cycle, a relic of a different era, is increasingly at odds with how people live, spend, and manage their finances. In response, a growing number of businesses are turning to On-Demand Pay, often called Earned Wage Access, to provide their staff with greater financial flexibility.
However, for many HR and payroll professionals, this concept still feels new. You might be wondering how it integrates with your current systems, whether it creates administrative headaches, or simply which provider is safe to trust. To help you navigate this changing landscape, we have compiled the most frequently asked questions about implementing flexible pay solutions.
1. What is On-Demand Pay?
On-Demand Pay, also referred to as Earned Wage Access, is a financial wellbeing employee benefit that allows employees to access a portion of the wages they have already earned before their scheduled payday.
It is important to distinguish this from a loan or an advance. With a loan, an individual borrows money they do not yet have. With On-Demand Pay, the employee is simply accessing wages that belongs to them, money for hours they have already worked, without waiting for the end of the month. This helps staff handle unexpected expenses, avoid high-interest credit, and align their income with their spending needs.
2. What types of companies offer On-Demand Pay?
There is a misconception that flexible pay is only relevant for the gig economy or hourly workers in industries such as Hospitality, Care and Retail. In reality, the adoption of On-Demand Pay is widespread across all sectors and salary bands.
From major corporate firms to healthcare providers and retail giants, organisations are recognising that financial stress does not discriminate based on job title. Current estimates suggest that close to a third of employers in the UK now offer this benefit to their employees. It has moved from being a "nice-to-have" perk to a core component of a competitive benefits package, helping companies attract talent and improve retention rates.
3. How do I choose an On-Demand Pay provider?
With the market growing, selecting the right partner is critical. Here are three key factors to consider when evaluating providers:
Check their wider product suite
Take a close look at the other financial products the provider offers. Many vendors in this space also offer credit products or loans. You need to decide if encouraging debt aligns with your company's values and financial wellbeing strategy. A provider focused solely on financial health will likely offer tools that support saving and budgeting, rather than just borrowing.
Look for the Code of Practice
The financial technology sector moves fast. To ensure you are working with a responsible partner, you should only consider providers who are signatories of the Earned Wage Access Code of Practice. This code sets high standards for consumer protection and transparency.
See the technology in action
Powerpoint presentations and webpages can only show you so much. The best way to understand the employee experience is to see the app live. Chat to the provider and ask for a live demonstration. This will give you a feel for the user interface, the ease of use, and how the platform actually works in real-time.
4. Isn't On-Demand Pay going to be a lot of work?
This is perhaps the most common worry for payroll teams, but the answer is a resounding no – provided you choose the right partner.
Solutions like Level are designed to automate the entire On-Demand Pay process. The technology integrates directly with your existing payroll and time-and-attendance systems. When an employee makes a withdrawal, the system handles the calculation and transfer automatically.
Furthermore, end-of-month adjustments can also be automated, meaning there is no manual reconciliation required by your payroll team. The goal is to improve financial wellbeing for staff without adding extra workload to your HR or payroll departments.
5. How can I speak to someone about On-Demand Pay?
If you are ready to explore how flexible pay could work for your business, the next step is simple. You can reach out to our team to ask specific questions regarding your organisation's needs.
Alternatively, you can book a demo to see the Level platform in action. This allows you to walk through the features and understand exactly how we can support your financial wellbeing strategy.
Modernise your payroll today
The monthly pay cycle is no longer the only option. By answering the call for flexibility, you can support your employees' financial health and position your company as a forward-thinking employer.
If you have more questions or want to see how easily this can be implemented, getting in touch with a provider like Level is the best place to start.