Under the scheme, 140,000 staff members could access 50% of their salary before pay day through financial wellbeing app Wagestream.
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This will be free the first time they access the early payment. However, a £1.50 fee will be charged every time they access the payment after that in the same pay cycle.
Employees can also use the app to automatically set aside money in a 'rainy-day pot' and access financial wellbeing tools such as a benefits entitlement calculator.
Hayley Tatum, chief people officer at Asda, said that the measures were in place to help employees through the current challenging economic landscape.
Speaking to HR magazine, she said: “We understand that from time to time our colleagues may need a bit more financial help, something which has been made worse by the current cost of living crisis.
“We are always looking at ways we can help, and giving our colleagues flexible access to their pay, alongside a range of support and guidance through the Wagestream app, could prove vital in giving them financial peace of mind as well as their mental wellbeing.”
Steve Herbert, wellbeing and benefits director at insurance advisory Partners&, said that the system formalises non-digital wage advances that are already in use.
Speaking to HR magazine, he said: “The difference though is that previously there was a degree of human interface in the process. Employees would have to request the advance from the HR team, and this interaction would allow the employer at least some involvement in deciding whether that request was likely to be beneficial or detrimental to the employee asking for it.
“Possible reasons for concern could be that a series of advances might leave the employee without adequate funds at the next pay date, or a perceived problem with gambling or substance addiction.”
Herbert recommended HR teams using similar systems to put checks and balances in place.
“Whilst these facilities are useful, it would perhaps be sensible for employers to limit the frequency of use. Alternatively putting in place a protocol to refer to the HR team if the facility is being used too frequently by any individual employee would at least mitigate some potential areas of concern,” he said.
