Josh Jackson, DailyPay’s Director of Product Marketing recently spoke with Felicia Cheek, Principal Advisor at Omnia Global Partners. Together, they answered some insightful questions about how DailyPay is leading the revolution for employee-centric pay.
Q: Do employers have the option to provide a daily pay benefit themselves, without a third-party vendor?
A: Technically it is possible. However, it would mean that employers would have to process their entire payroll and remit taxes every single day. For most companies, that sort of undertaking is not feasible for their payroll team.
Q: Can employers outside the United States use DailyPay?
A: While DailyPay is currently operating in all 50 states, we do not yet have any international partners. However, that is definitely a goal for us in the future.
Q: How does DailyPay work, from a technical perspective?
A: Upon enrollment, new users will have their direct deposit instructions in the payroll system changed to the DailyPay direct deposit instruction. All that is changing is the destination account to which payroll funds are sent from the employer, which ensures compliance in all 50 states. For a more in-depth explanation of the “behind the scenes” process, please feel free to contact firstname.lastname@example.org with any further questions.
Q: How is DailyPay staying on top of changing federal and state-specific regulations as on-demand pay is becoming more widely used?
A: DailyPay complies with all current laws in all 50 states. By changing as little as possible about how payroll is processed by an employer, payroll executives can have more peace of mind about implementing this benefit for their employees.
Q: Are states currently requiring that employees be paid daily?
A: No. Certain states have requirements regarding the timing of employee pay, whether it may be monthly or bi-weekly, but no states currently require daily payments.
Q: How important is vendor experience when handling something as sensitive as employee pay?
A: Experience is extremely important and should be a critical part of the decision-making process. DailyPay is experienced in all aspects of this process, from funding to navigating the user interface to customer support. We take the utmost care to protect the security of each of our user’s information.
Q: How do employees access their daily pay benefit once the program has been implemented? Do employers need to run direct deposits every day?
A: No. DailyPay will be sending the funds to the employee, either instantly or the next day, depending on which option they select. The employer is not responsible for that process.
Q: If an employer is using DailyPay as a third-party vendor, what is the funding window? How does the employer pay DailyPay for their service?
A: DailyPay is reimbursed in full for all employee usage during a pay period each time the employer runs its payroll. There is no fee for employers for the service. Employees pay ATM-like fees of $1.99 or $2.99 per transaction, depending on whether their transfer request is same day or next day.
Q: What impact will DailyPay have on off-cycle payments?
A: Having DailyPay in place will help an employer be better positioned to process off-cycle payments, only in case of emergencies. Because the need for paycheck advances should be eliminated, off-cycle payments should only be necessary to correct a payroll error when an employee can’t wait for the next pay cycle.
Q: What types of employees are commonly using this benefit?
A: DailyPay is quickly being adopted by employers of lower-income, hourly workers, specifically in the hospitality and retail industries. However, DailyPay is a useful benefit for employees across the pay spectrum, as income levels and savings are not always parallel.
Q: What if an employer who wants to implement DailyPay already has a paycard program in place? Will the employees have to get new paycards?
A: If there are paycards in place, then DailyPay will provide the daily pay benefit through those paycards. However, DailyPay does not require the use of a paycard for our service, so there is no need fto issue new paycards, or for a company that doesn’t use them to begin to do so.
Q: Where do you see payroll technology heading in the future? How does on-demand pay fit into that emerging landscape?
A: Payroll across the board is becoming more automated and less transactional. It is foreseeable that technological innovations, such as on-demand pay, will continue to be developed and disrupt the status quo. These changes will prepare organizations to adjust to the emerging gig economy, as well as make employers using these technologies more attractive to the millennial workforce.
You can listen to the webinar in its entirety here.