Amid Labor Shortage, Gen Z Demanding ‘EWA’ Pay

person sitting on chair holding iPad

In the eyes of many young workers, it’s simply unacceptable to wait two weeks for pay.

Companies like McDonald’s, Walmart, Target, Kroger, and Dollar Tree have taken note, and are offering workers the option to access hourly pay on demand – in a pay method known as earned-wage access (EWA) – in the hopes of shoring up the ongoing labor shortage.

Andrew Duffy, a labor economics expert, told The Food Institute most young workers have a clear philosophy regarding pay these days.

“To quote one of the most infectious commercials of all time, ‘It’s my money, and I need it now,’” said Duffy, the CEO of SparkPlug, an incentive management program for restaurant and retail workers. “Workers like that [with EWA] they get their wages for hours worked immediately, rather than waiting two weeks for the next paycheck,” Duffy said.

Some industry insiders also feel that EWA helps companies offer more transparency with employees. Melissa Johnston, VP of HR at Pacific Bells/World Wide Wings, said that’s a primary reason why employees appreciate on-demand pay.

“Some of the strongest feelings [regarding EWA] surround those who are young and already parents. Earned-wage access has assisted them in getting diapers and food for their young families without having to use a payday advance,” Johnston told The Food Institute.


EWA advocates say the pay method helps workers avoid overdraft fees and payday loans, reported Retail Brew (Aug. 17).

“Younger workers – often the primary workers in the food industry – are often ones who are living paycheck to paycheck and need the most flexibility when it comes to when they receive their pay,” said Jim Colassano, senior vice president of product development and strategy at The Clearing House Payments Company.

Gen Z has largely come to expect EWA because most members entered the workforce after the advent of on-demand, gig economy jobs.

“When workers have the alternative option of making money on Doordash, Uber, or TaskRabbit – where earned income is paid out much more quickly than at a standard, hourly job – they expect the same of their hourly employers,” Duffy said.

Noteworthy findings regarding EWA include the following:

  • According to earned-wage access provider Instant Financial, 87% of Gen Z and 84% of Millennials recently said they’d be more interested in applying for a job that pays them the same day they work.
  • A study by Mercator Advisory Group found that the average tenure of retail employees increased 24% when using EWA.

“The trend in EWA offerings has historically been toward hourly workers, but ‘instant [pay]’ is seeing more interest from companies with salaried workers, and the industry trend seems to be moving in that direction,” said Tal Clark, CEO of Instant Financial.


Clark insists EWA can provide a necessary boost to American workers, as long as businesses use the pay method responsibly.

The Consumer Financial Protection Bureau (CFPB) has outlined requirements that EWA providers must meet to avoid being defined as “credit” under the Truth in Lending Act. The service must be free for employees, who may only access wages that have already accrued, and earnings information must come directly from the employer. The CFPB plans to issue further guidance on EWA soon, Retail Brew reported.

“The narrative around EWA often paints a picture of payday lending in disguise, taking advantage of the most vulnerable workers and furthering the cycle of poverty,” Clark said, “which simply isn’t the case when employers partner with a responsible provider.


Johnston, the HR executive, said the employees she works with say they’re actually saving more money these days, thanks in large part to EWA.

“When we first went to an earned-wage access concept, as an organization we were concerned that our teams would withdraw daily (and) they would not have saved enough for their basic expenses, and that this would ultimately create a bigger issue for them,” Johnston recalled. “Much to our surprise, it had the total opposite effect.

“Our teams tell us that, because they can see daily how much they’re making – and they check, trust me – they’re able to better plan their weeks and, therefore, are seeing their bank accounts increase,” she added.