Instant pay gives employees control over their money

VANCOUVER — Your pay cheque isn't due for another week, there's no cash and there's not much food in the fridge. Do you borrow from a friend, take a payday loan, or maybe sneak a steak from the restaurant fridge?

Steve Barha

Steve Barha

By Colleen Isherwood, Editor

VANCOUVER — Your pay cheque isn't due for another week, there's no cash and there's not much food in the fridge. Do you borrow from a friend, take a high-interest payday loan, or maybe sneak a steak from the restaurant fridge?

It's a hypothetical example, but one that is all too familiar to hourly employees in the service industry — whether they work at a restaurant, hotel, retail outlet or transportation employer.  With customers using credit cards these days, that restaurant standby, the tip-out is often being added to employee pay cheques, rather than doled out in cash.  The alternative is having restaurants bring in cash to top up the low amounts of cash paid by customers in house.

What to do?

There's now a company based in Vancouver called Instant Financial, that allows employees to access 50 per cent of earned wages to be used the same day the a shift was worked. There is no additional charge to the employee and they can use money to pay for gas, groceries or anything else.

“The solution was clear.  It's not just about moving tips; it's an opportunity to tap into their pay as well,” says Instant Financial CEO Steve Barha. “It's incredible. Employees who experience it say they can't go back to bi-weekly pay cheques. Instant pay helps them control what they do with their own income. They can make ends meet with their own dollars, for free. 

“This is highly disruptive to the industry.”

Barha has found that most employees using the program are not taking a lot of money out of their pay — just a few dollars to buy gas, so they can get back and forth to work.

“Both employers and employees have been delighted with the results,” he said.

The program is rolled out by offering employees the option of bi-weekly pay or instant pay. Barha views it as insurance for the times when employees need $20 to $30 to make ends meet.

Employers have benefitted from the program, with those who have enrolled noting a 10 to 20 per cent reduction in employee turnover, and greater employee engagement, meaning they sell more and waste less. There is also a reduction in absenteeism. When the alarm goes off, there's an additional incentive to get to work to earn that day's amount.

“This aligns with millennial and next generation thinking,” says Barha. “Soon there will be an entire generation not seeing a bi-weekly pay cheque.

“Employers are telling us that there's also a reduction in theft — since instant pay helps eliminate that desperation that exists toward the end of the money cycle. 

“That entire stress and strain goes away,” notes Barha. “People stand a little taller, with confidence and pride. This leads to higher customer satisfaction.”