Walmart unveils on-demand pay app to offer wage advances to workers
The system, which is being billed as a “financial wellness” tool, has drawn criticism from labour advocacy groups.
Walmart has introduced an on-demand pay app that enables its 2.3 million workers to request an advance on a portion of the fortnightly wages they have already earned.
According to CPA Practice Advisor, the US retailer has introduced a mobile app called Even, which hooks into its payroll system, enabling employees to see what they have earned so far and to direct available funds into their bank account or onto a payroll debit card.
The management of the largest private employer in the country, attests that the new system will help staff to avoid the service fees and high interest rates charged by payday lenders, which are subject to little regulation in most states.
A 2015 study by Pew Charitable Trusts revealed that a huge 12 million US workers use payday lenders each year, racking up $7 billion in loan interest and fees. The average user takes out eight loans of $375 per year, with interest alone costing $520 when eventually paid off.
Under Walmart’s system, which is being billed as a “financial wellness” service, the app is free for employees to use up to eight times each year, but after that fees and other charges apply. As a result, it has drawn criticism from workers’ rights groups.
Paul Sonn, general counsel of labour advocacy group the National Employment Law Project, said: “It sounds like this may be a useful service, but it doesn’t tackle the fundamental problem Walmart workers suffer – their pay cheques are too small.”