Easy Money

The pros and cons of next-day pay.

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Is next-day pay a solid recruiting tool, or a nightmare for employers? / Photo: kazanovskyiphoto

Since running a restaurant has become infinitely more difficult, operators must now consider the benefits and drawbacks of every decision. One of the latest efficiencies to weigh is next-day pay. Also called expedited pay, same-day pay, or daily pay, this model allows employees to collect their earnings without having to wait out the regular pay cycle.

In a strapped labor market, next-day pay could be the very thing that differentiates one restaurant from another in a potential employee’s mind. It could also solve the headaches surrounding payday. “Every single payroll I get, ‘Oh boss, I forgot to clock in on Saturday and you owe me eight hours,’” says Jed Levin, owner of the Piper Inn in southeast Denver. “The time to correct the error is less because they would tell me the very next day because they didn’t get paid.”

Another potential benefit for Levin (who is considering the service but has not yet pulled the trigger) is the immediacy of funds. “From a human aspect, it could help wage staff quite a bit because their money is in a bank account as soon as they do the work. It eliminates excuses; there’s no coming to me for fronting or advances,” he continues.

Not so fast, says Mark Rubinstein, owner of Denver’s On-Call Restaurant Accounting. Where Levin sees potential pros, Rubinstein sees possible pitfalls. “In my mind, it’s going to be difficult to make sure everyone clocks in and out appropriately,” he says. “Where do the checks and balances come from? Are managers approving this every day? There’s a chance that we make more work for managers.” And what if, he adds, someone “forgets” to clock out, is paid, and then rides off into the sunset?

As for hoping that staff will budget their personal finances better, Rubinstein again shakes his head. “[Waiting for payday] was maybe helping them get on a schedule. But getting money daily doesn’t help with that,” he says.

Talk to us! Email your experiences (and thoughts, opinions, and questions—anything, really) to askus@diningout.com

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