Having your salary deposited into your bank account every single day. In the United States, receiving your wages more frequently than once a month or every two weeks has already become common practice. The trend is also gaining traction in the United Kingdom and Spain, according to Trouw. Is this an irreversible shift? We called Maarten Lafeber, senior strategist at APG, to find out.
This development is made possible by apps offered by payroll providers. “These apps are connected to an employer’s payroll system and track how many days an employee has already worked. In theory, someone could request the pay for just two days of work and have it deposited immediately,” Lafeber explains. At first glance, it looks like a smart technological innovation. But Lafeber points out that it’s no coincidence the trend started in the U.S. “I can’t help wondering whether it’s simply treating symptoms of deeper structural issues, such as low incomes, unstable employment, and expensive credit. Many Americans struggle to make ends meet each month. They’re overdrawn, and they face high interest rates on credit card debt or payday loans. Getting part of their paycheck earlier helps them cover groceries or gas.”
A tradition of protective regulation
Although the trend has reached Europe, Dutch law stands in the way of daily or near‑daily wage payments. Article 7:623 of the Dutch Civil Code states that the payment period may not be shorter than one week or longer than one month, according to Trouw. That weekly minimum protects employers from excessive administrative burdens, and it prevents especially smaller employers from running into liquidity problems, says Lafeber. After all, in a standard payroll cycle, employees are essentially extending credit to their employers by working now and being paid later. “The one‑month maximum, in turn, ensures that employees don’t go too long without receiving wages. In certain cases, early access to pay is possible, but that falls under the category of an advance rather than a true wage payment.”
Where American workers are often left to fend for themselves, Dutch employers have a long tradition of providing safeguards. Lafeber: “Take vacation pay, for example. It originated in the early twentieth century as a way for employers to act almost like responsible guardians, saving on behalf of workers so they could afford a summer holiday. Nowadays the system is more flexible, and some companies let employees receive their vacation pay or year‑end bonus at a time of their choosing or convert it into extra vacation days. In essence, this is still withheld salary, and many people no longer spend the extra money on vacations. Still, more flexible wage payments feel somewhat at odds with the way we tend to view income arrangements in the Netherlands.”