Paying Temp Employees with Debit Cards – A Win-Win?

Image showing cards- Bridgeware Systems

As this article is being written (Jan 2021) it is exactly one year since the World Health Organization’s (WHO’s) first declaration of a global health emergency. At the time there were only 200 recorded deaths and 9,800 cases worldwide.

In March, WHO declared it a pandemic and two days later our President declared a national emergency.

By the end of March the US House and Senate had passed the $2 trillion “Cares Act” and President Donald Trump had signed it into law.

Part of that economic stimulus bill was a $1,200 direct cash payment (plus $500 per child) to every adult US citizen earning less than $75,000 a year. In April and May millions of checks were being mailed and direct deposits were made by the US Treasury.

One problem with the distribution was that millions of Americans did not have checking accounts or there was no government record of one. It was decided that the best and fastest way to get the money to those millions was via a $1,200 debit card sent to their address.

The staffing industry had been paying contract workers via debit cards for several years. Modern staffing software has enabled virtually instant issuing, loading, and re-loading of debit cards with a simple key stroke.

This efficiency has enabled millions of employees to have instant access to their pay no matter their location or access to check cashing services (fees charged).

One company supplying debit card services advertises the following benefits for the debit card holders:

  • Easy activation (800# and set a pin #) (“once and done”)
  • Write checks on debit account.
  • No Activation Fee
  • Use at any merchant who accepts VISA.
  • No fee cash availability at thousands of In-Network locations
  • ATM Network Locator” available online for thousands of locations.
  • Get cash-back with any merchant that participates.
  • Mobile App for Money management Online (and other services)
  • Setup direct deposit with IRS, SS, etc..
  • Security and fraud protection (same as Visa and Master card) Zero liability.
  • lock and unlock.
  • Transfer funds to any US bank account (to family and friends?)
  • Savings plans to set aside funds for special events, purchases, etc.
  • Pay bills online.
  • Gift cards (buy, send, and store digital gift cards)

(Data courtesy of The Money Network)

So. the Win-Win?

For the staffing company, the debit cards it issues to their contract workers becomes an additional and significant benefit (as above) provided by the staffing company. That certainly helps to create happy and loyal workers.

The company also benefits by having no checks to provide, print, envelope, mail or re-issue (as is sometimes needed).

Debit card pay has enabled staffing companies to pay laborers or any employee on a daily basis upon receipt of an emailed timecard from the workplace supervisor. Emails are fast!

Clients also like the fact that the workers, whom their staffing company has sent to their workplace, are being paid at the end of a day even before they can get to their cars in the parking lot.

The client’s estimate of the professionalism of their staffing company increases.

A staffing company, like any company needs to make a profit, retain good contract workers and their clients. The hundreds of efficiencies that good staffing software delivers makes them more competitive.

The national staffing association, Staffing Industry Analysts (SIA) in its recent “History of the Staffing Industry” (Link restricted) points out that a significant event in the history of the staffing industry was the advent of staffing software which enabled even small staffing companies to compete with much larger companies.

We have all seen how a store clerk loads an American Express gift card at the register for the amount specified in seconds. This can also be accomplished remotely via the computer at the staffing company office without any contact needed because the money is electronically deposited into the Debit card account of the worker in seconds.

Personal story: Last week I sent a payment to a business in India via “Transferwise”. The money, including the exchange from dollars to Rupees, was deposited in the recipient’s bank account in 9 seconds!

Sometimes I hate technology but there are some wonderful things that it has enabled. Being able to pay employees in one second by remotely loading their Debit cards is one of them. It makes it a “Win-Win for the staffing company and their employees. Stay Safe!

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