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Two weeks can be a long time between paychecks, though it's been the standard of large companies for decades. But now, to appease workers in a tight labor market, some of the biggest companies are reinventing how we get paid, even giving workers access to their earnings when they want them. Sarah Gonzalez from our Planet Money podcast reports.
SARAH GONZALEZ, BYLINE: For a lot of people, waiting for payday isn't working.
KELLY BLACK: Watch your hands, please. Hot fries.
GONZALEZ: This is Kelly Black (ph). She's been working at the Burger King in Epping, N.H., for three years now. She gets paid every two weeks, but her bills don't pop up on that same schedule.
BLACK: Paying the light bill, you know, if you don't pay it on time, they tend to shut you off. So you got to pay it when it's due. You send in the money and you overdraft the account. And the bank charges you a fee. And it's just - it's crazy.
GONZALEZ: Overdrawing your account, taking money out that you don't have for a fee - $35.
BLACK: So you end up paying twice as much for something that, if you had had access to your money sooner, you wouldn't have had to pay that much.
GONZALEZ: U.S. banks make billions in overdraft fees every year, charging people who have $0 in their bank account. And while Kelly has been struggling to pay her bills, her boss - the big boss, the owner - has also been struggling to attract and keep workers.
I understand you own a few Burger Kings. How many do you own?
SHOUKAT DHANANI: Approximately 505.
GONZALEZ: That's Shoukat Dhanani (ph). Around 2 1/2 years ago, the labor market started getting tight. Employment was high. Basically, everyone had a job. And Dhanani says it started getting hard to find workers.
DHANANI: We had a restaurant we were opening in Stoughton, Mass., and the restaurant sat there ready to open for three months because we couldn't get enough staff to open the restaurant.
GONZALEZ: So Dhanani starts offering perks.
DHANANI: We've got an aggressive bonus program. We rolled out 401(k)s. We've raised wages.
GONZALEZ: And then he hears about an app that gives workers access to their earned wages daily - DailyPay. Dhanani told employees at 100 of his New England Burger Kings, try it if you want. See what you think.
BLACK: I was a little skeptical. I mean, are we really going to get our money the same day?
GONZALEZ: Kelly Black was one of the first to sign up. And the way the app works is they front the money. If employees want to take their earnings before their paycheck comes, then when their paycheck comes on the regular two-week pay schedule, it kind of makes a stop at DailyPay. And DailyPay takes out what they fronted, and then the rest of the paycheck continues on its way to the employee. You can either transfer your earnings to your bank account now or the next day, both for a fee.
BLACK: The now is $2.99. The next day is $1.99.
GONZALEZ: OK.
BLACK: I'm going to do the now. So you hit complete transfer. So if I close out of that app and I open my bank app, and it shows me right there. It's already in my account.
GONZALEZ: Now she uses the app two to three times a week.
BLACK: To get gas or run to the grocery store or something like that, yeah.
GONZALEZ: And Jeanniey Mullen with DailyPay says users aren't actually taking out round dollar amounts. They're not using it like an ATM.
JEANNIEY MULLEN: They're taking very odd amounts, which typically are the exact amount of a bill.
GONZALEZ: And there are a few apps like this now offering instant pay to workers from Six Flags and Kroger grocery stores to Walmart and McDonald's, some without a fee to employees. That's not an option for Kelly, but she says the fee is worth it to her to fill in the gap between paychecks.
BLACK: No matter how hard you try and budget your money, it's not always easy because things happen. You get a flat tire. A child needs something for school. Somebody gets sick.
GONZALEZ: It's kind of like paying an ATM fee to access your money, which is not great for people who have zero dollars in their bank account. But it's still cheaper than the interest on payday loans or overdraft fees.
For NPR News, I'm Sarah Gonzalez. Transcript provided by NPR, Copyright NPR.
