For people living paycheck to paycheck, it’s the time between those paychecks that’s a killer. While workers might get paid every other week, the bills—gas, food, utilities—don’t wait. But through a new service offered at certain fast-food restaurants like Church’s Chicken, Pizza Hut, and Taco Bell, fast-food employees now have an option to get paid the same day they work.
Depending on the financial service providing the service, the new same-day or next-day options are sometimes free, sometimes available for a small fee. Bloomberg reports the new, faster pay services are designed to help fast-food companies attract and retain workers in a tight labor market and keep them from jumping to gig economy jobs with Uber, Lyft, Doordash, etc.
With one such same-day pay service, called Instant Financial, workers withdraw an average of $28, its CEO tells Bloomberg. Instant Financial doesn’t charge any fees to workers, but charges the employer instead. According to its website, Instant Financial’s app alerts workers after they’ve completed a shift, and offers them the option to deposit earned pay directly into a bank account, onto their Instant card (which works like a credit card), or withdrawn in cash fee-free via a network of participating ATMs. Another service, called Branch, has been adopted by some Taco Bell, Panera, Applebee’s, McDonald’s and Pizza Hut locations. Branch allows workers to get up to half the wages the same day they worked for a flat $3.99 fee. Payroll processing company ADP offers its own version of this service, too.
The services differ from payday loans in that there’s no interest—and in some cases, not even a fee—to access one’s paycheck instantly. Payday lenders are often preceded by the term “predatory,” because they can prey on low-income workers’ inability to obtain traditional bank loans, charging them exorbitant interest rates. Mother Jones cites a statistic from the Center For Responsible Lending, which finds the average pay-day borrower pays $1,105 to borrow just $325.
So the appeal of an alternative system of same-day pay for workers is clear. When I was waiting tables, one of the benefits of cash tips was that I could take money home in my pocket that night to put gas in the car, pick up groceries, etc., rather than waiting two weeks for a paycheck. Restaurant testimonials on Branch and Instant Financial’s websites boast that offering instant-pay services cuts down on turnover and helps attract employees. Fast-food is all about instant gratification—now that’s true for employees, too.