Faster wage payments expand to more restaurant workers
As more industries explore the potential of providing faster access to wages, restaurant management software provider Delaget has partnered with financial wellness mobile app provider Branch to expand the reach of instant earned wage access availability to employees of more than 10,000 restaurants.
The move aligns with other efforts, such as those by Uber and Lyft, to provide immediate payouts to workers whose expenses and schedules don't align with the traditional two-week pay cycle.
Branch’s new partnership with Delaget is the latest in a string of expansion efforts the Minneapolis-based tech provider has struck this year. It is part of Branch’s broader strategy to target companies that serve large swaths of hourly workers in an effort to expand access to earned, but not yet paid wages.
Delaget will offer the Branch app to its more than 10,000 restaurants that use its management and business analytics software. Its clients include operators of chains such as Taco Bell, KFC, Pizza Hut, Hard Rock Café, IHOP, Popeye’s, Zaxby’s and Hardee’s.
“Partnering with industry-leading companies like Delaget is part of our strategy to make financial wellness benefits more accessible. These kinds of partnership allow us to streamline adoption for employers and provide them an effective benefit with greater ease and speed," said Atif Siddiqi, founder and CEO of Branch.
In March, Branch expanded the availability of its payroll advance service to customers of its financial wellness and work scheduling app, which previously had been restricted to only large companies. In October, Branch partnered with Mastercard and Evolve Bank & Trust to offer a debit card that allows hourly workers to instantly access a portion of their earned wages ahead of their periodic paycheck.
Offering faster payments to hourly and gig-based workers has become a major focus within the payments industry as well as for those businesses that rely on low wage workers since many of these consumers often live paycheck to paycheck. Competitor PayActiv partnered with Visa in March to offer same-day wage access to participating employers through a PayActiv prepaid Visa card.
Gig economy companies have been forced to offer faster access to earned wages as a means of retaining their contract workers for example Uber offers an Instant Pay feature for drivers to get paid up to five times daily. However, when such an instant pay system goes down, as it did for Uber in 2018, it exposes the risk of losing workers.
Based on data from the Bureau of Labor Statistics there are more than 80 million hourly workers, representing 58% of all salary and hourly workers, excluding those participating in gig economy jobs.
According to a recent Branch study, over 40% of hourly workers have no savings and another 18% have less than $150 saved in case of an emergency demonstrating a growing need for low wage workers to gain faster access to earned, but not yet paid wages. It’s also potentially a signal that the traditional two-week pay cycle may be nearing a sunset as companies such as Branch provide hourly workers with greater financial flexibility.
With so many consumers living paycheck to paycheck, employers are seeing payroll advance solutions such as Branch as a means of improving worker retention and job satisfaction with minimal costs involved.