• Sat. Oct 1st, 2022

Amid labor shortages, Gen Z is demanding “EWA” pay

ByCindy J. Daddario

Aug 29, 2022

In the eyes of many young workers, waiting two weeks for wages is simply unacceptable.

Companies like McDonald’s, Walmart, Target, Kroger and Dollar Tree have taken note, offering workers the ability to access hourly wages on-demand – in a payment method known as Earned Wage Access (EWA) – in hopes of getting a foothold the ongoing labor shortage.

Andrew Duffy, an expert on labor economics, said The Nutrition Institute Most young workers these days have a clear philosophy about pay.

“To quote one of the most infectious commercials of all time, ‘It’s my money and I need it now,'” said Duffy, the CEO of SparkPlug, an incentive management program for restaurant and retail workers. “Such workers [with EWA] They get paid for the hours worked immediately instead of waiting two weeks for the next paycheck,” Duffy said.

Some industry insiders also believe that EWA helps companies offer more transparency towards employees. Melissa Johnston, VP of HR at Pacific Bells/World Wide Wings, said it’s one of the top reasons employees value pay that’s needed.

“Some of the strongest feelings [regarding EWA] surround those who are young and already parents. Access to wage earnings has helped them get diapers and food for their young families without having to take a payday advance,” Johnston said The Nutrition Institute.


EWA advocates say the payment method helps workers avoid overdraft fees and payday loans, they reported Retail Brew (Aug. 17).

“Younger workers — often the main workers in the food industry — are often the ones living paycheck to paycheck and need the greatest flexibility when it comes to when they get paid,” said Jim Colassano, senior vice president of Product Development and Strategy at The Clearing House Payments Company.

Gen Z largely expected EWA as most members entered the labor market after the advent of on-demand jobs in the gig economy.

“When workers have the alternative option of earning money with Doordash, Uber or TaskRabbit — where earned earnings are paid out much faster than a regular hourly job — they expect the same from their hourly employers,” Duffy said.

Notable findings related to EWA include the following:

  • According to Instant Financial, a provider of earned wage access, 87% of Gen Z and 84% of Millennials recently said they would be more interested in applying for a job that pays them the same day they work.
  • A study by the Mercator Advisory Group found that using EWA increased the average tenure of retail workers by 24%.

“The trend in EWA offers has historically been towards hourly workers, but ‘instant’. [pay]’ is seeing more interest from companies with employees, and the industry trend appears to be moving in that direction,” said Tal Clark, CEO of Instant Financial.


Clark insists the EWA can give American workers the boost they need as long as companies use the payment method responsibly.

The Consumer Financial Protection Bureau (CFPB) has outlined requirements that EWA providers must meet to avoid being defined as “credit” under the Truth in Lending Act. The service must be free for employees, they can only access wages already accrued, and the earnings information must come directly from the employer. The CFPB plans to issue more guidance on EWA soon, Retail Brew reported.

“The narrative surrounding EWA often paints a picture of payday lending in disguise, taking advantage of the most vulnerable workers and promoting the cycle of poverty,” Clark said, “which simply isn’t the case when employers work with a responsible provider.


Johnston, the HR manager, said the employees she works with say they are actually saving more money these days, thanks in large part to EWA.

“When we first decided on a wage access concept, we as an organization were concerned that our teams would be stepping back on a daily basis (and) they weren’t saving enough for their basic expenses, and that this would end up being a bigger problem for them,” recalled himself Johnston. “To our great surprise, it had the exact opposite effect.

“Our teams tell us that because they can see how much they’re making on a daily basis – and they check, trust me – they can plan their weeks better and therefore see their bank accounts growing,” she added.