Instant pay proving to be sweet perk for Sprinkles Bakery
Sprinkles Bakery has added what it hopes to be a sweet perk for its employees who might struggle with paying their bills on time: Instant access to their pay.
The company — famous for its cupcake ATM — has added DailyPay, a tool allowing workers access to their earning before payday, for its 650 employees.
“We wanted to give our employees access to their wages as they accrued them, without having to wait for their next regularly scheduled payday,” says Marisa Eddy, Sprinkles’ vice president of HR. “If they need access to their earned wages for any reason at all, we want them to have a quick and affordable means to do that.”
Rolled out in mid-February, Sprinkles’ DailyPay benefit is already at 24% enrollment (employee sign-ups) and 18% adoption, the company said. Enrollment at full rollout is typically 25% to 30% of a company’s workforce, DailyPay says.
Sprinkles hopes the DailyPay benefit will address employees’ financial needs and help its workforce better cope with unexpected expenses that might fall in between pay periods, Eddy says. It also hopes the addition will reduce employee turnover and increase retention.
DailyPay claims to do just that: Its own studies say that companies using a daily payment benefit were able to fill open positions 52% faster and reduce employee turnover by 41%. Further, it says employees are willing to take a 13% reduction in pay in order to receive daily versus weekly pay.
New York-based DailyPay offers employees 100% of their paycheck instantly; fees are paid either by employees or by employers if they offer the service as a benefit. It costs $2.99 for instant transfers and $1.99 for next business day.
The partnership is the latest signal of growth for instant pay apps, to which more employers are turning as a way to help employees who struggle with financial security. Giving employees instant access to their earned wages instead of waiting two weeks between paychecks can help workers avoid expensive payday loans and avoid late fees, advocates say.
Those problems occur as more Americans live paycheck to paycheck: Nearly 20% of Americans don’t save any of their annual income, while another 21% only save 5% or less, according to Bankrate.
DailyPay works directly with about 100 companies, including Vera Bradley and Westgate Resorts. But through a recent partnership with payroll giant ADP — DailyPay is now available to employer customers who use ADP’s HR platform — thousands of other employers can add the DailyPay tool for employees.
“Historically, alternate ways to access pay early could burden the worker with interest or penalties,” Craig Cohen, general manager of ADP Marketplace, said last fall. Tools like DailyPay, though, provide a “responsible vehicle for accessing pay early.”