Today’s economy requires small business owners to remain flexible and agile in order to stay in business. As you wonder how you’re going to pay bills or what your financial future looks like, keep in mind that your employees may be wondering the same thing at home. As the unemployment rate continues to climb, your staff may be questioning if and how you’re going to pay them. Even if you can continue to provide for your team, they may be dealing with the loss of income from a spouse or another family member. Taking care of your employees during COVID-19 might require you to look at different flex pay options to keep them afloat.
The demand for flex pay options are on the rise.
Employers may have previously worked with one or two employees who found themselves in a difficult position and needed financial support to stay on track. However, the coronavirus pandemic has brought on unprecedented levels of uncertainty and need. Traditional payment methods simply aren’t working for many employees around the United States. Employers who can be flexible with payment options will earn their employees’ loyalty and keep their team productive.
What is flex pay?
Even if you want to help out your employees, you may not know about the different flex payment options and be wondering, “What is flex pay?” Essentially, it’s different payment methods you can offer your staff to help them get their paycheck how and when they need it.
One common flex payment option is payroll card programs. How do these prepaid cards work?
They are similar to debit cards in that they are payment cards that can be used to make purchases from places like the grocery store or the mall. Instead of printing a check or depositing money directly into a bank account, employers will load a payment card for the employee each pay period.
One of the reasons paycards for employees are so popular is because it works for employees who don’t have a bank account set up. They don’t have to worry about where to take their check and can avoid any check cashing fees.
Payroll card providers can also help employees stay out of debt since they can only spend the money that is on that card. Unlike credit cards where you can carry a balance, a paycard can only be used when it has funds on it.
Direct deposit is another popular flex pay method because it enables your employees to get paid faster than they would with paper checks. Their payroll funds are simply deposited right into their bank account at the financial institution of their choice.
Using direct deposit also helps prevent checks from being lost or stolen – something that would be devastating for a family living paycheck to paycheck during this crisis. Being able to offer your employees a faster and more secure way to get paid is hugely valuable.
Wages on Demand
Accessing payroll wages on demand is an increasingly popular flex payment option. It essentially removes the traditional pay period and allows employees to get paid when they want. Many employees love this option because instead of putting the balance on their credit card and making monthly payments, they can use their incoming paycheck to cover costs as they come up.
It doesn’t affect the net wages you pay your staff. It simply allows them to collect the money they’ve earned anytime after they’ve completed the work. It sounds complicated, but by partnering with a company who specializes in these services, you can avoid running into any issues with taxes or losing track of payroll.
What else can employers do to help?
The biggest thing employers can do to help their employees during these difficult times is continue to have funds available for payroll. If you’re cash strapped because of coronavirus, look at options like the Paycheck Protection Program or loans from the Small Business Administration. Do your due diligence to help assure your employees that their livelihood is secure, even during such uncertain times.
If you need help finding solutions, partner with Paytech.
If you need help finding flexible ways to pay your employees, we can help. Contact us today to learn more about getting started with flex pay.