Flexible access to pay has long stopped being a novelty. Advanto’s Earned wage access is a modern benefit that adapts wage payment to the modern world. Yet a number of myths still circulate around it. Let’s look at the four most common misconceptions and set the record straight.
Earned wage access = a loan
Many people think that if an employee withdraws part of their pay before payday, it counts as a loan. That’s a misconception, though. A loan is usually tied to arrangement fees, interest, late-repayment charges, and in some cases even insurance fees. Earned wage access differs from expensive loans in that it comes with no interest or penalties for late repayment whatsoever. The employee receives part of the pay they are already entitled to, with no interest and no hidden fees. No debt – just greater flexibility.
The whole paycheck up front, and no money left by the end of the month
Companies often worry that employees won’t manage their money sensibly and will withdraw all available funds before payday. But through Advanto, employees can never withdraw their entire paycheck – only ever a part of it. On average, one user withdraws less than CZK 8,000 a month – not even half of the minimum wage.
What’s more, data shows that people use Earned wage access responsibly, mostly to cover unexpected expenses or everyday purchases during periods when prices are climbing and payday is still far off. This helps people manage their money better and avoid expensive loans or late fees. “This social benefit actively trains people in financial literacy and thereby limits the risks associated with unnecessary indebtedness, which can lead to a debt spiral, personal bankruptcy, or falling into a debt trap,” explains HR Director Petra Slabá of OREA Hotels & Resorts.
Earned wage access means a lot of paperwork
Many companies, and especially their accounting departments, think that introducing Earned wage access means more work for accounting. In reality, the entire process is automated and requires no additional administration. “The service requires no additional administrative work and does not affect our cash flow,” comments the HR team at Vitesco Technologies. The only action required from the company is to download a spreadsheet of the withdrawals made and, if needed, import it into the payroll system. Everything else runs automatically, with no need for intervention.
The benefit is only for low-income employees
Flexible access to pay is for everyone, and it’s used by people across all pay grades. It enables better financial planning regardless of income bracket. Higher income is usually paired with higher expenses. Even highly qualified employees or managers occasionally face unexpected costs and appreciate not having to reach for a credit card or personal reserve. “We believe the privacy the app offers, and the fact that the whole process is online, also play an important role,” says HR Director Eva Kyselová of Lagardère Travel Retail, commenting on the benefit.
Earned wage access is not a loan, it does not increase administrative burden, and it is not just for low-income employees. Instead, it brings flexibility, financial security, and higher employee satisfaction. If you’re considering introducing this benefit, take a look at the real benefits and experiences of companies where it’s already up and running, such as Notino, Adler Pelzer, or ORLEN Unipetrol.
Want to find out more? Get in touch with us and find out how Earned wage access can help you too.
