Walmart will let workers take pay early

This week, the nation’s largest private employer will begin providing its more than 1.4 million workers a service that will allow them to receive wages before their next payday.

Instead of waiting two weeks between paychecks, Walmart workers can now use an app to access a portion of wages for hours they have already worked. The goal is to help workers avoid costly payday loans and other debt traps.

“We believe this is the right thing to do, and we are happy to champion it,” said Judith McKenna, Walmart’s chief operating officer.

But Walmart’s new digital initiative also highlights, albeit unwittingly, the financial struggles of Walmart’s low-wage workforce. Even as the economy strengthens, many retail and service industry workers are not earning enough to make ends meet.

“It sounds like this may be a useful service, but it doesn’t tackle the fundamental problem Walmart workers suffer,” said Paul Sonn, general counsel of the National Employment Law Project, an labor advocacy group. “Their paychecks are too small.”

The app, which is called Even, also helps workers manage their finances by pinpointing exactly how much they can safely spend before their next paycheck. Walmart pays a fee on behalf of the workers to the technology firm that runs the app.

The minimum starting wage at Walmart is $9 an hour, which is $1.75 higher than the federal minimum wage but lower than the starting wage at retailers like Costco, which pays $13 an hour.

The average hourly wage for a full-time Walmart worker is $13.85, while the average hourly wage at Costco is about $24.50.

Every Walmart employee can use Even’s financial planning tool, and obtain eight payments, known as instapays, per year free of charge. For most of the workers, the instapays will be deducted from their next paycheck.

Alexis Adderley, who works nights in a Walmart distribution center in Fort Pierce, Fla., has started using the Even app as part of a pilot program.

The app, which connects to her bank account, calculates how much she pays for housing, food and phone bills and tracks when she makes big monthly payments. With that data, Even provides Adderley a real-time estimate of how much she can spend in a given day.

She earns $19.25 an hour and works 30 hours a week. This week, the app warned Adderley, 30, that she had only enough money to safely spend $9.08 before her next paycheck.

“I would love to save more,” she said.

Sam Hodgson / New York Times Walmart operates this fulfillment center in Bethlehem, Pa. Walmart has started offering payday advances — not loans — to employees through an app called Even, but some critics of the retailer’s labor practices say it should raise wages instead.