The EWA Code of Practice: A Plain-English Guide for UK Employers
Earned Wage Access (EWA) is reshaping how British workers manage their money. Instead of waiting until payday, employees can access a portion of the wages they've already earned. It's one of the fastest-growing trends in payroll, with more than 1 in 10 UK employers now offering it to their workforce (CIPD Reward Management Survey, 2022).
But with rapid growth comes the need for clear standards. That's where the Earned Wage Access Code of Practice comes in. If you're an employer weighing up whether to offer Earned Wage Access, this guide breaks down what the Code is, why it exists, and what it means for you.
What is Earned Wage Access?
Earned Wage Access, sometimes called Employer Salary Advance Schemes, Flexible Pay, or On-Demand Pay, is a financial service that lets employees access part of their earned wages before their regular payday.
Say an employee has worked two weeks of a monthly pay cycle. With Earned Wage Access, they could draw down some of those earned wages early to cover an unexpected bill, rather than turning to a credit card or high-interest loan.
What is the Earned Wage Access Code of Practice?
The Chartered Institute of Payroll Professionals (CIPP) joined forces with seven UK providers of Earned Wage Access to create the Earned Wage Access Code of Practice in September 2023.
The Code was written in response to a recommendation by the Financial Conduct Authority (FCA). Its purpose is straightforward: to set a common standard for firms providing EWA products, so that consumers get good outcomes. To stay compliant, each provider must undergo a regular independent assurance assessment.
Why does the Code matter for employers?
Offering Earned Wage Access can make you a more attractive place to work. The majority of workers say they'd see an employer more favourably if Earned Wage Access was on offer (EY – Payroll That Works For All, 2020).
But not all providers are equal. The Code gives you a simple way to identify trustworthy partners. Providers who follow it are audited every two years by an independent body to ensure standards are upheld. By choosing a compliant provider, you protect your employees from poorly designed products – and protect your business from reputational risk.
The 9 commitments of the Earned Wage Access Code of Practice
The Code sets out nine commitments that member firms must uphold. Here's what each one means in plain English:
Product Design and Value: Providers design EWA products that genuinely meet employees' needs and offer fair value.
Communicating with Consumers: Communication must be clear, fair, and not misleading, so employees can make informed decisions.
Vulnerability: Providers must treat vulnerable consumers fairly and work to deliver good outcomes for them.
Ongoing Consumer Support: Providers help employees use EWA in a way that supports their financial goals.
Product Governance: Providers continuously review their products and flag any that no longer offer fair value.
Oversight and Measuring Outcomes: Providers track the outcomes they deliver using proper management information.
Appropriate Consumer Relationships and Conflicts of Interest: Providers avoid conflicts of interest that could harm consumers.
Training and Competency: Staff are trained to offer suitable service and support, and feel confident in their roles.
Assurance: Providers commit to an annual assessment to prove they meet the Code's standards.
How do you choose a compliant provider?
The simplest route is to look for providers who are members of the EWA Working Group and have passed the independent audit. At the time of writing, audited providers include Access Group, FlexEarn, Hastee, Level, Salary Finance, and Stream.
For more details on the things to ask them and look out for, you can have a further read here.
Bringing Earned Wage Access to your workforce
Earned Wage Access can be a genuine benefit – a way to ease financial stress for your team without dipping into your own cash flow. But the value of any scheme depends on the provider behind it.
By understanding the Earned Wage Access Code of Practice and partnering only with compliant firms, you can offer a benefit that's both popular and responsible. Start by reviewing the list of audited providers, then ask the right questions before you sign anything.