Since there were no hard and fast rules
about these details, employees whose
requests were denied sometimes saw
fellow workers requests approved. This
led some workers to believe that their
supervisors were playing favorites,
ironically creating discontent from the
well-meaning policy.
And a final problem was that the
company’s payroll system is set up to
pay wages once a week. So workers
would have to wait until the next
payday to receive their extra wages.
For some, this was a serious problem.
“Many workers are reluctant to ask
for an advance,” says Ulislam. “So by
the time they request one, they may be
in real trouble. They need the money
yesterday, not in four or five days.”
In October 2014, Jersey Precast
was able to solve all problems related
to salary advances by working with
San Jose, Calif.-based PayActiv, which
provides emergency advances to
workers through its new PayActive
App.
PayActiv charges workers a flat $5
fee to access up to $500 or 50 percent
of their accrued net pay anytime they
want, with no questions asked. The
company installed a kiosk in Jersey
Precast’s lobby to allow workers
to receive their money in cash
immediately.
PayActiv’s system interfaces with
Jersey Precast’s payroll and time-
and-attendance systems. PayActiv
receives data about how much workers
have accrued, and each week Jersey
Precast’s payroll system deducts the
loaned amount from each employee’s
paycheck. The company then makes
water heater, an imminent cut-off
of electrical service, just to name
three—and asks to be paid part of
their wages early, the company has
always tried to comply.
To be clear, employees in those
circumstances are not asking for
money they have not yet earned.
Like virtually all companies, for
administrative and accounting reasons,
Jersey Precast holds back up to two
weeks of salary. So, depending on
when the financial emergency strikes,
employees might have to wait up to
four weeks to be paid for work hours
they’ve accrued.
Looking back, CEO Amir Ulislam
defends his thinking and his company’s
Occasionally advancing workers’ pay for work
hours they accrued can be a valuable benefit,
one some employers are now considering.
decision to support these workers when
the policy was initially introduced.
“They had a severe problem,” he says.
“They did their part—they had done
the work. We felt wherever possible, we
should do our part by moving up their
payday for part of their salary to cover
an unexpected bill.”
But good intentions aside, the
policy had a number of problems.
For one thing, workers requesting
an advance had to get three to four
levels of approval, starting with their
direct supervisors. This created
an administrative burden on the
company, and often reduced workers’
productivity since they usually filled
out the forms on company time, and
after that, may not have worked as
enthusiastically while worried about
the outcome. Ulislam estimates the
company lost from one to two work
hours to the administrative overhead
related to each request. Many workers
also found the process humiliating,
since their financial problem was seen
by so many people.
Also, for cash-flow reasons, the
company, while trying to be as
generous as possible, had to limit
the number of advances it provided
at the same time, and, to be fair to all
workers, limit the number of times
it provided advances to each worker.
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