What is the Earned Wage Access Code of Practice?
Over the past decade, Earned Wage Access (EWA) has gained traction as a way to provide employees greater financial flexibility. Offering workers access to their earned wages before traditional payday can significantly improve financial wellness and workplace satisfaction. However, with the rise of Earned Wage Access solutions comes the need for clear, ethical standards and regulations. This is where the Earned Wage Access Code of Practice plays a vital role.
This blog will explore what the Earned Wage Access Code of Practice is, why it matters, and how it shapes the way employers and providers deliver Earned Wage Access schemes. Whether you're an employer looking to implement Earned Wage Access or simply curious about its ethical implications, this guide will walk you through everything you need to know.
What Is Earned Wage Access?
Earned Wage Access allows employees to access a portion of their wages as they earn them, rather than waiting for payday. Think of it as having real-time access to your salary for hours already worked. Unlike high-interest payday loans, Earned Wage Access platforms provide a smoother, often low-cost alternative to cover urgent expenses, eliminating the need to rely on predatory lending.
Popularity Among Employees and Employers
Earned Wage Access has rapidly become a sought-after benefit. For employees, it offers financial freedom and reduces the stress of waiting for payday to manage pressing obligations. For employers, Earned Wage Access improves employee engagement, productivity, and retention by addressing one of the key stressors in the workplace: financial insecurity. However, as the popularity of Earned Wage Access grows, so does the importance of ensuring its responsible use.
What Is the Earned Wage Access Code of Practice?
The Earned Wage Access Code of Practice is a set of ethical and operational guidelines created to ensure Earned Wage Access services are fair, transparent, and beneficial to employees. The Code was introduced in response to the rapid growth of Earned Wage Access solutions and the concerns raised about potential risks, such as hidden fees.
The Code serves as a framework for providers and employers, outlining the standards for offering Earned Wage Access responsibly. Compliance with the Code reassures employees that their financial wellbeing is being treated ethically.
Providers who adhere to the code are audited on an annual basis by an independent body to ensure standards are upheld.
Why Does the Code Matter?
The Code of Practice addresses the concerns and aims to provide a balanced approach that prioritises the wellbeing of employees without creating undue financial strain.
What are the specifics of the Code?
The code includes nine key commitments which firms must make to deliver good consumer outcomes. An in depth description of what this includes can be found in the official Earned Wage Access Code of Practice, here.
Take the Next Step
Introducing earned wage access can be a fantastic investment in your employees and your organisation, but it requires careful planning. The Earned Wage Access Code of Practice exists to guide the industry and build trust between employees, employers, and providers.
If you’re ready to explore Earned Wage Access for your workplace, we recommend only consider providers certified against the Code. Not only does it ensure compliance and ethical delivery, but it also demonstrates your dedication to employee wellbeing.
Looking for more guidance? Get in touch with our team to learn about how certified Earned Wage Access fits seamlessly into your organisation while delivering the best for your employees.