A shortage in casual employees across the country has encouraged a Canberra-based supermarket chain to become an early adopter in introducing a new wage-access tool as an employee benefit.
Supermarket chain Supabarn has introduced the Paytime system across its seven ACT and Sydney stores, allowing casual and part-time workers like 28-year-old Neha Narula to dip into her earned wages to pay for unexpected bills or expenses.
"I got the email from Supabarn about this system a couple of months ago and I think it's a very good idea," Ms Narula said.
"We have a mix of people working here - full-time, part-time and casuals - and many of them are teenagers and you know, the young people particularly, they really like this idea a lot.
"It's a very quick system, you just click through [on the app] and the money drops into your account pretty much straight away."
The app-operated wage access provides participating employees with information on how much they have earned and how much ready cash is accessible to them based on the shifts they have worked, rather than wait for the company's stipulated pay date to drop the wages into their bank accounts.
A recent report by Ernst and Young found seven in 10 Australians live paycheck to paycheck and have less than $5000 in savings at any given time.
Similar wage access systems have been operating in the UK and the US for a number of years, with large companies with a high proportion of casuals in their workforce, such as global brands McDonalds, KFC, Target and Uber, as well as major hotel chains like Hilton and Holiday Inn, already using similar products.
In the post-pandemic environment in which casual workers are in short supply, employee-empowering mechanisms like Paytime are seen as a tool in which companies can not only retain the workers they have, but support them in a meaningful way.
Supabarn managing director Theo Koundouris said he investigated wage access after watching some YouTube videos of the benefits that had flowed to giant retailer Walmart.
"I looked into it closer and for people who are budgeting week to week, it's a much better alternative than expensive credit [card] debt," he said.
"I believe it's only a matter of time before we see this [wage access] concept take off here with the bigger companies."
Paytime CEO Steve Furman said that enquiry from Australian companies to participate in wage access has risen 600 per cent over the past three months.
"It's a very new concept here; Australia is about three to four to four years behind the UK and about seven years behind the US so we've got a lot of catching up to do in this space," Mr Furman said.
Wage-access systems do not loan the money to employees, nor charge any ongoing fees and charges to those who use it.
Instead, those who access the system dip into Paytime's own internal cash pool. Paytime is reimbursed by the employer through a direct payment deducted from the worker's wages on the employee's next stipulated pay day.
Participating companies can choose to either subsidise the wage-access system at no cost to their employees, co-contribute to the program, or the employees pay a small one-off fee for each access which is usually between $2.50 to $3.50 per withdrawal.
Supabarn opted for the employee-pays alternative, where those who use it pay the merchant fee of $3.49 per transaction.
"Our solution allows you to draw down a portion of what you have already earned so what we're trying to do is match your day-to-day expenses to your income," Mr Furman said.
"What we're saying to the [participating] company is either you pay nothing whatsoever and your staff pays the fee if and when they access the money; they can pay a co-contribution to subside it, or we've got a few companies which recognise that it is a genuine employee benefit for their staff and the company then pays a flat fee and staff get two free withdrawals per month.
"So we're accommodating all these options."
About 65 to 70 per cent of participating Australian companies in Paytime are opting for employees to pay the access fee, and about 30 per cent are wholly subsiding the wage access. Only a few are co-contributing.
Mr Furman said that for businesses struggling to fill casual shifts, there's a genuine incentive to support them by subsidising wage access.
"If a company is finding it tough to fill shifts because there's a major shortage of casuals, they can send a message out to staff which says basically 'look, we know you work at X store, there's a shift available now for the next four hours and if you do it, we will let you access your pay immediately afterward'.
"In that instance, the company is willing to pay for it because the company is filling the shift ... and getting efficiencies in the business.
"And employees are saying, 'you know, I will put in the extra hours because I can get my money today and I don't have to wait two weeks for it'."
