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Employees Stay Longer with DailyPay

Inside the Payroll Leaders Conference

 

Key leaders in payroll are seeing the need to master dramatically different skill sets as the use of artificial intelligence (AI) applications and robotic process automation (RPA) become more prevalent in the practice of doing payroll. 

 

As a result, major disruption in payroll administration is underway on several levels, attendees told me at the American Payroll Association’s Payroll Leaders Conference, held in early November in Phoenix, Arizona.

 

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Please listen in on our podcast The Source as we address the constructive receipt issue

in detail. It will be broadcast on Nov. 13th and will be available for download later. 

 

 

The uses of AI and RPA in payroll are not only primarily in play to cut costs and streamline processes, but also to enhance the user experience, which, according to opening keynote speaker Pete Tiliakos, is “fundamentally the business case” for adopting these new technological innovations.

 

Disruption is underway in many areas of payroll, but one key payroll area that is being impacted is the frequency of when workers can get paid. 


The ability of workers to access their pay as it is earned on a daily basis is fast becoming the new normal, and payroll leaders at this conference recognized to me that the question no longer is whether an employer will adopt a daily pay solution, but when. 

 

There are several options in the market that facilitate access to pay prior to a scheduled pay date. Follow-up questions about the daily pay process need to be answered before there is full acceptance in the payroll community, several conference attendees said.

 

First and foremost to payroll professionals is the question of how much the payroll process will be impacted. A lot? A little? Barely at all?

 

Second, who is providing the funds to pay a worker their earned pay before payday: the employer or the daily pay provider? Certainly providing a daily pay benefit will result in some additional payout by the employer beyond the wage payment, no?

 

Employers also are concerned that a daily pay solution does not take advantage of employees by charging interest, requiring fees when the service is not used, and/or allowing inappropriate debits to employee bank accounts to recoup amounts provided before payday. 

 

Finally, there is a concern about constructive receipt. Does the payout before payday generate a responsibility by employers to pay taxes and start the clock ticking on any garnishment and child support obligations?

 

Some earned pay access providers can’t answer these concerns to the satisfaction of the payroll professionals I know. I am fortunate to work for one — the only one I know of — that can, DailyPay.

 

DailyPay’s process, which uses AI, requires only a simple interface with an employer’s payroll and time management systems, to come up with the ability to determine what an employee has earned each workday. There is no interference with the pay cycle or established payroll processes. Payroll for everyone, whether they access pay before payday or not, proceeds as normal.

 

DailyPay funds all amounts accessed before payday. In general, employer costs are minimal and could be next to nothing to provide this benefit. Also, employers can choose to pay the ATM-like fee charges when an employee accesses amounts before payday.

 

And speaking of charges to employees, DailyPay has a very simple and transparent charge for accessing pay before payday: $1.99 for access the day following the employee’s request, and $2.99 for an almost instant transfer of funds to the employee’s account. 

 

Regarding constructive receipt, some providers are leaving employers open to potential exposure to having to make earlier tax and support payments, but not DailyPay. This is because the transaction to transfer funds before payday is strictly between DailyPay and the employee. The employer does not need to know there has been such a draw before payday and the employer’s pay to the employee on payday is unaffected.

 

As solutions to allow workers access to pay earned before payday proliferate, understand this: DailyPay is the fully-compliant, least interfering option for employers and payroll professionals.

 

As Pete Tiliakos, who serves as principal analyst, HR Technology & Services, with NelsonHall noted, DailyPay is “a very strong wellness solution.”


Written by Michael Baer, Special Advisor, DailyPay

Michael Baer, with a career covering payroll issues for the past three decades, specializes in communication and compliance; he is an advocate to the payroll community for employees accessing pay when earned. Prior to DailyPay, Michael was managing editor at the Bloomberg subsidiary, Bloomberg Tax, where he was charged with overseeing BNA’s Payroll Library, developing the Payroll Decision Support Network and International Payroll Decision Support Network. All these products are now consolidated into one payroll offering on the Bloomberg Tax platform. Michael is a Certified Payroll Professional.


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