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Many of the nation’s largest corporate employers are allowing workers to access earned wages before payday, and discovering it is an employment benefit in high demand. At some companies, the option has become even more popular than 401(k) plan participation.
This development should not come as a surprise as the affordability issue that has gone nationwide has stretched the budgets of many Americans in recent years. While the new way to get wage income early avoids the need for workers to tap predatory payday loans, consumer critics are concerned that it is still a form of lending, and largely unregulated. Consumer groups say wage advances can be riddled with fees and in some cases, similar to payday loans, can lead America’s most vulnerable workers into an unhealthy debt spiral.
Here is a primer on the benefits, its evolution, and both sides in the debate.
