Gusto’s new flex payment program allows employees to pick their payday

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In today’s gig economy, where part-time and hourly workers are often plagued by financial stress, waiting twice a month for a paycheck can be an inconvenience. To help workers make ends meet, HR and payroll technology firm Gusto has launched Flexible Pay, a new feature to its payroll application that allows employers to give their employees the option of choosing their payment schedule.

As part of Gusto’s cloud-based payroll program, workers can opt to be paid when they want: once a month, once a week or every work day — and any combination in between.

With Flexible Pay, Gusto calculates, pays and files relevant taxes automatically. The company advances money to the business, so employers do not need to run additional payroll or manually approve their employees’ Flexible Pay requests.

The solution is aimed at small businesses with two to 100 employees and for part-time or hourly workers, although it also will work for full-time, salaried employees, according to Gusto.

The pilot program began recently for Gusto’s users in Texas, where a company representative says it has “thousands of clients” using its payroll program currently. The Lonestar State was ripe for the pilot program due to its businesses with part-time and hourly workers, Gusto says.

This offering was made available to employers on their Gusto payroll screen informing them that they can now allow employees to choose when they get paid.

Eight in 10 Americans are living paycheck to paycheck and “this [option] gives them the power to choose when they are compensated,” says a Gusto spokesman. “The old method of paying once a month or twice a month was to allow accountants to float the money that the business’s workers earned.”

See also: Walmart’s ticket to employees’ financial security: Advance payday, budgeting help

Gusto monitors an employer’s payroll accounts and if they do not have enough funds to pay employees every day or every week, Gusto will cover the employer’s payroll. The service also monitors an employee’s work and payment schedule and will highlight any discrepancies, such as if a worker requests payment for 30 hours of work when they have only worked for 25 hours, for example.

This offering highlights the changing work economy, explains Gusto co-founder and CEO Josh Reeves.

“Flexible Pay lets employees decide when they want to get paid for the work they’ve already done, without additional cost to employers — it’s the way we believe everyone will get paid in the future,” he says.

The solution is free to employees and employers are not charged more for the service. Gusto says it soon plans to expand the pilot program to employers in others states such as California and New York.

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