Why wait two weeks? New payroll system pays you everyday
TORONTO -- We've become an on-demand society as we can instantly summon a car ride with our phone, download a movie in minutes and order products for same-day delivery.
Now, there is a growing trend to give workers on-demand paycheques so instead of waiting two weeks, you could get paid every day.
Ceridian is a Toronto-based, global human capital management company specializing in human resources, payroll and benefits. It has launched its Dayforce Wallet, a service it describes as an on-demand pay solution.
“People deserve to get paid and on-demand," said David Ossip, chairman and CEO of Ceridian.
If you only get a paycheque twice a month, it can be a challenge to pay your bills on time. In fact, an on-demand pay survey, conducted on behalf of Ceridian, found that 34 per cent of Canadians run out of money between pay periods.
Ossip said the idea of being paid every two weeks is an outdated model and now it's become possible to pay people for the work they do each day.
But how does it work?
Dayforce Wallet combines a digital wallet with a Dayforce Prepaid MasterCard which gives employees on-demand access to their earned wages.
“It’s quite puzzling that people are prepared to wait two weeks to be paid when the technology exists today to stream payroll to people immediately," Ossip explained.
Ossip said the Dayforce Wallet calculates employees earned wages -- net of taxes and deductions -- and there are no direct fees to either the employer or the employee.
The aforementioned survey also found that 56 per cent of people believe employees should have the option to be paid each day and 49 per cent would consider an employer that provides on-demand pay.
OTG Management in New York City is an American company that has adopted the Dayforce Wallet pay system. It specializes in dining in 10 airports, including Pearson International Airport in Toronto.
The company said 30 per cent of its American workforce has switched to the pay on-demand option, which its Canadian workers will now also be able to use.
“A lot of our folks live paycheque to paycheque so it gives them an opportunity if they have a flat tire or a bill they need to pay, they can go directly to on-demand pay [to get funds from their paycheque],” said Alan House with OTG’s human resources department.
House said the way its on-demand pay system is set-up, “employees can’t get the full amount that they have made on a daily basis, but up to 50 per cent so that every two weeks or whenever they get paid they will still get money.”
Ossip said if employees can have more control over their money they could avoid going into debt and might be able to save and spend money on their own schedule.
The Dayforce Wallet is already being used by 500 employers in the U.S. and the company says now that it's launched in Canada, it expects there will be interest from companies to try it out.