How Full-Service On-Demand Pay Works for Our Payroll Team


By April Smith
Director of Payroll and Benefits, Senior Lifestyle

As a payroll professional considering an on-demand pay solution for the first time, my mind swam with thoughts of special deduction files, massive payroll system changes, funding issues, more pay reconciliations, and a lot more employee questions coming into our department. I was thinking ‘I don’t have the bandwidth to absorb this, and neither does my team.’ It was like a nightmare to me. But it was a critical need for our employees, so I took a deep breath and trudged on.

As we began the journey of vetting providers, we determined that the growing number of on-demand pay offerings can be grouped into two general categories: those who offer a comprehensive full-service approach and those who offer the technology and make you put resources toward it to make it run. 

Most of the vendors offering on-demand pay are self-service and require extra work from payroll and the employer for each transaction, validating those nightmarish thoughts I had initially, such as more pay reconciliations and the need to develop deduction files for employees using on-demand pay. In looking at those ‘solutions,’ I thought to myself: ‘I’m not going to turn into a bill collector’ and deal with collections and having to reconcile each transaction every pay period.


We opted for the fine-dining version, the full-service option. I consider us (the employer) to be the silent partner. It’s an employee benefit I don’t have to monitor. The most time I spend on the daily pay solution, which our employees are embracing by the thousands, is to verify employee accounts and follow up when the on-demand pay provider team sends me information. In the past six weeks, I’ve literally spent less than one hour thinking about our on-demand pay benefit. 

The provider’s call center, not my team, handles all employee inquiries, and they are very careful to continuously and accurately track earnings, making them accessible to employees and seamlessly accounting for the amounts, so my payroll team doesn’t have to take any action. That’s full-service.


But there was another issue we needed to consider. I also am concerned for our employees. Most self-serve vendors place arbitrary limits on amounts employees can access, when they can request on-demand payments and the payment methods they can use. While I understand the surface reasoning for doing this, I am troubled by it. 

We determined that any program we were going to choose needed to come with the maximum benefit to employees, meaning no arbitrary limits on amounts earned that employees can transfer or limits on their ability to draw whenever they choose. 

I also oversee benefits for my employer and we know that some workers take advantage of each benefit offered and some don’t take advantage of any of these benefits. This all is because each employee’s particular life circumstances are different. So when it comes to on-demand pay, who can dictate to these employees how much and when they can use their own earnings? 

We couldn’t accept a one-size-fits-all approach here because each employee has different circumstances. People’s work hours can vary, their home situations may have two incomes (or not), their stages in life and career are all at different points.


Early in my career, my focus was on our growing family, and a lot of my unexpected spending came from diapers, medical care and prescriptions for my children. I would have used an on-demand pay benefit to stay on top of these had it been offered. Now that my children have grown, my financial needs have changed, but the bills and unexpected expenses still come at times that don’t necessarily sync with payday. 

It’s not an employee’s fault that our society has adopted the practice of paying employees at set intervals, such as bi-weekly, or that bill due dates don’t always sync with the employee paydays.


We wanted the employees to have a customized solution for them, and the one-size-fits-all approach that most on-demand pay providers apply to available amounts and frequency of use was not going to do that. Our full-service daily pay provider offers up to 100% of anticipated net pay and does not limit the frequency of use.

As more payroll professionals, like me, are put in a position of considering an on-demand pay solution, know first that this is because of the clear upside to employers and HR this benefit brings:  a reduction in employee turnover, better employee engagement and easier recruitment, to name a few. But the impact each offering has on the payroll operation can vary widely. So be deliberate in your analysis and know the consequences of going with a provider that does not offer the full-service on-demand pay we have adopted.

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