CIPP launches earned wage access guidelines



One in 10 UK employers now offer workers the option to be paid when they choose under earned wage access (EWA), and the Chartered Institute of Payroll Professionals (CIPP) has launched a new code of practice to help standardise the scheme.

EWA gives employees access to a percentage of pay they have already earned ahead of their usual pay day.

Pay is usually accessed via a third-party app, which providers charge fee of between £1 and £2 per use, though employers can also opt to cover the cost.

Due to the fee for use the Financial Conduct Authority, Nest Insight and The Woolard Review have called for more oversight of how employers provide it.

The CIPP’s code has been launched in response to this call for responsible use of EWA.

Read more:What benefits do your employees really care about?

Speaking to HR magazine Samantha O'Sullivan, policy lead at CIPP, said: “The new EWA Code of Practice introduces an easy to understand base level for what a good EWA offering should include and the best practice to apply.”

According to Nest Insight's 2023 Bridging Financial Gaps for Workers one in 10 UK employers currently offer EWA to employees, benefiting more than 4 million workers across the country.

One of the criticisms of EWA is that, without financial education, giving employees the means to withdraw pay early can worsen debt issues.

Therefore for HR teams looking to introduce EWA, O’Sullivan advised the scheme should be part of a wider financial wellbeing strategy.

She added: “The CIPP strongly believes that a foundation of financial education is needed to support a successful wage access programme.”

“Additionally, understanding why you want to introduce EWA as a benefit will go a long way in encouraging its responsible and beneficial use.

“With EWA usage expected to rise, employers may want to introduce the benefit to aid recruitment and retention. Using the code of practice will ensure that it is done responsibly and effectively.”

Case study: Early wage access at Camden Town Brewery

Seven UK-based EWA providers, including Wagestream, Ceridian and Hastee have become founding members of the code.

Its seven commitments include a pledge to communicate clearly with customers and provide fair value for money.

It also introduces a commitment for providers to monitor products to make sure they continually meet customer needs.

To ensure the standards are upheld, members are independently audited each year.