I caught some news last week from the small business payroll provider Gusto announcing the initial launch of a service called 'Flexible Pay', a service designed to give employees at companies using the Gusto payroll service the ability to choose their own pay schedule and get paid whenever they want for hours they have already worked.
Think about how most shops run a typical Bi-weekly, hourly payroll cycle. The employee works and clocks their hours and OT for a 14-day period, often ending on a Friday. The employer (or their service provider), sums up all the hours, calculates gross pay, sorts out the taxes and other deductions, and issues a paycheck or direct deposit for the employee's net pay about a week later - usually the following Friday. So the work done by the employee is essentially loaned to the employer until the two-week collection period ends, and the week of processing time is over. And for lots of employees, ones who might be facing bills or other obligations that don't line up well with the employer's pay schedule, that delay in getting their pay presents a problem.
They might look for a payroll advance, put more spending on their credit cards, or even seek out a high-interest payday loan - often because the one to almost three week 'float' doesn't work for them in their lives.
So the idea that a payroll service provider like Gusto is making it possible for employees to have more choice in when they get paid for time already worked, while also making it available to employers, (Gusto is basically fronting the funds for the employer until the 'real' payroll runs), I think is one that is long overdue, and is needed and will be appreciated by lots of employees.
A couple of disclaimers here - this service is really new, and so far only available to Gusto customers in Texas, (more states are on the way), Gusto did not ask me or compensate me at all to post about this, (in fact I am pretty sure they did not even contact me about it), and finally, there might be other payroll providers out there with similar products and services (ADP, Paychex, Ceridian, etc.), I don't claim to know that this is an offering that is unique to Gusto. So please let me if your company already offers this, and I will add a footnote to the piece. But regardless, this is a cool idea and I hope it catches on with more companies and payroll providers.
I will leave with this image - a crude Google map of Las Vegas with location pins for Starbucks locations, (which seem to be everywhere), and for Payday Loan Companies. Can you guess which is which?
Have a great day!