US PayPal employees will be able to get paid faster thanks to an agreement the company has made with Even Responsible Finance.
The deal allows PayPal employees to access their pay as soon as they earn it, so they don’t have to wait for payday every two weeks. They also have free access to Even’s app, which forecasts income and expenses to help formulate a monthly budget.
PayPal is one of many U.S. employers looking for ways to help staff save money and avoid borrowing from expensive payday lenders. Almost 40% of American workers live paycheck to paycheck, and even among those making more than $ 100,000, the figure is close to 20%.
For PayPal, the push began when the company launched an emergency relief fund that employees could access if they had to face an unforeseen expense, like a major auto repair or a medical emergency. But leaders quickly noticed that the problem was bigger than expected.
“We have had a lot more people asking for help than I expected,” CEO Dan Schulman said in an interview.
To better understand the situation, PayPal surveyed hourly and entry-level employees at the company to find out how much they could save each month. The results: Workers in some places were left with just 4% of their wages after paying taxes and other necessary living expenses, a measure he calls net disposable income.
“They were financially stressed, they were forced to choose between full health care benefits and putting food on the table for their families,” Schulman said. “I thought the results were going to be very positive as PayPal pays market rate or above in every region of the world.”
PayPal is now looking to increase the net disposable income of hourly and entry-level workers to 20%. The San Jose, California-based company began by raising wages and lowering costs to employees for health care benefits. PayPal has also made every worker a shareholder, a valuable advantage now that the stock has climbed more than 75% this year, beating the earnings of many of the company’s competitors.
On average, Even users can save around $ 167 in their first three months of using the app. Schulman expects workers at all levels to start using the app, which includes an “OK to spend” balance to help users avoid shattering budgets.
This feature “is just more relevant information that you can go out and manage your life with,” Jon Schlossberg, CEO of Even, said in an interview.
Initial data shows that half of PayPal employees using the app are salaried employees.
“It’s not just the lower income levels that struggle, but of course they struggle disproportionately,” Schulman said. “It is both the lower income levels and the new middle class that are going through a very difficult time.”
Mark Hansen, a PayPal customer service agent in Omaha, Nebraska, said when he started with the business a year and a half ago, his family lived from paycheck to paycheck, which l ‘prompted them to seek help from the company’s emergency fund. He received a $ 300 Walmart gift card and was then invited to participate in panel discussions with senior executives on his financial situation.
“For me and my family, it just means trying to stay ahead,” Hansen said of PayPal’s new programs. “At the very beginning, when PayPal was asking employees are you good financially, I think there were stories of people living in their cars at the time. These responses were heard by PayPal.