An instant payroll system that gives employees access to 50% of their pay every day was launched in August and already nearly 75,000 Canadians are using it.
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The KOHO company wants to help workers who struggle to meet their daily needs. Several large companies like Tim Hortons and Boston Pizza use their program.
Once registered, employees can withdraw and use half of their daily salary free of charge each day.
For example, if a worker earns $ 200 per day, he may claim $ 100 daily. On pay day, the amounts withdrawn will be deducted from his salary.
According to the management of the company, this service reduces the financial stress of the most vulnerable employees and it helps in the retention of workforce.
Félix Wu (TVA Nouvelles)
“One in two Canadians lives pay to pay. Many Canadians therefore do not have enough money if they have improvised expenses, such as a broken car, ”explains Felix Wu, director of finance.
According to the Cooperative Family Economy Associations (ACEF), however, we must be vigilant. If misused, the service could encourage families to take on more debt.
“It’s an exceptional troubleshooting solution. This is a sign that our financial situation is in trouble, ”says Hélène Hétu Budget consultant ACEF Rive-Sud de Montréal and Fonds d’Entraide Rive-Sud.
Ms. Hétu suggests first of all to make a budget. The key, she says, is planning.
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