Across the U.S., the typical payroll model goes something like this—employees work a shift, log their hours, then wait a week or two to get paid for their work. Meanwhile, around four out of 10 workers say that they find it challenging to pay for their household expenses, even without experiencing a decrease in income. Almost two-thirds of employees live paycheck to paycheck, and some run out of money before they can pay all of their bills. To stretch their cash, some turn to high-interest payday loans.
Same-day pay offers a more convenient pay model for both employees and employers. Nurses and other health care staff get paid almost immediately after working a shift. Learn more about the benefits and potential drawbacks of offering same-day pay for CNAs and RNs.
The concept of same-day pay is simple. A person works a shift and gets paid for it right away. All relevant deductions, such as taxes and benefits, get deducted from their pay if they are an employee. While some same-day pay models provide payment immediately after a person works a shift, some pay the day after.
While it sounds unusual for modern workers, same-day pay is a pretty old concept. Decades ago, it was the most common way for people to receive their wages. They'd work, and their employer would give them their payment before they went home. The biweekly or monthly payroll model came about in response to growing company size and limited technological resources. Nowadays, you can transfer funds to an employee's prepaid card or bank account instantly.
Same-day pay programs often integrate with an organization's existing payroll software. The programs calculate how much to pay an employee based on their hourly wage, the shift length and the taxes and benefits withheld.
How do nurses usually get paid? Typically, they work their scheduled shifts, then receive their paychecks a week or two later. Even nurses who work on a per-diem basis usually need to wait a week or so before getting paid.
There's a demand for same-day pay among the nursing community. Over half of health care workers believe on-demand or same-day pay is a more attractive benefit than time off. More than 40% of workers would choose same-day pay versus waiting for payday if you gave them the option.
Some reasons why same-day pay is attractive to nurses and other health care workers include:
Same-day pay does have some drawbacks for employees. While it can help them avoid shortfalls, it can also increase spending, as the employee has immediate access to cash. Another disadvantage of same-day pay is that some providers charge employees a fee to access their money early.
Employees aren't the only ones who can benefit from same-day pay. Your health care organization can also see advantages from offering workers immediate payment. One of the most significant advantages of offering same-day pay is that doing so can reduce turnover.
The turnover rate in the health care industry is high—almost 18% at hospitals in particular. High turnover is expensive for organizations, as it's costly to find new employees. When workers constantly come and go, employee morale also suffers.
But offering same-day pay is often a perk that makes nurses and health care workers more likely to stay on the job. They know that they can depend on your organization to pay quickly, making your facility a more attractive place to work.
Same-day pay helps to reduce the financial stress employees experience. When workers feel stressed due to being unable to pay bills or put food on the table, their performance on the job is likely to suffer. Employees who have financial stress said that it distracts them from their work. Eliminating or significantly reducing that stress can lead to better engagement and job performance.
It can also cut down on absenteeism and presenteeism. Nearly 60% of employees state that they would work harder for an employer that provided same-day pay.
Should you decide to offer same-day pay, be careful about the provider you partner with. Some same-day pay providers are expensive and require organizations to jump through many hoops, such as establishing additional bank accounts for the same-day payments. Fees can also be substantial, potentially making a same-day payment program unfeasible for your organization.
Another issue to note is that you might have to restrict how much pay an employee can access early or immediately. Some supposedly same-day payment programs look more like payday loans than an early payment. Review the requirements and terms carefully when introducing same-day or on-demand pay to ensure your employees don't end up taking payments that are higher than the amount they earned.
SmartLinx streamlines the payroll process, ensuring your employees get paid on time while reducing the amount of labor involved. The software integrates other systems easily, so you can introduce same-day payment options to your nursing team. To see how it works for yourself, schedule a demonstration today or get in touch for more information.