Want to Improve Employee Financial Health? Pay Them More Often

Newsweek

05-06-2025

Spain and Portugal top the list of desired destinations for digital nomads and aspiring expats for more than a few good reasons. They have delicious food, temperate climates, fascinating art and architecture, and relatively low costs of living compared to much of the continent. Their worker-friendly employment policies include over a month of paid time off for vacation and public holidays, as well as four months of paid parental leave for both mothers and fathers. Particularly enticing may be the bonus paychecks for employees in both June and December to help families enjoy the summer and winter holidays.
But that's not the only payroll quirk that makes these countries unique, and the other one might make some wannabe Madrileños or Lisboetas think twice. If you work for an employer based in either country, you will only be paid once every month. It's a legal requirement that's common not only throughout much of Europe, but also Central and South America.
An angled view of a new $100 bill laying on a bed of cash.
An angled view of a new $100 bill laying on a bed of cash.
Getty Images
For those of us accustomed to the more common biweekly pay cycle in the U.S., it's easy to imagine the challenges this may present for family budgets—especially for workers on the lower end of the income spectrum. But monthly pay is more common in the U.S. than you might think. Nearly 11 million American full-time workers still get paid this way, including many public sector employees. But whether you're in Porto or Pittsburgh, there's little reason for unnecessary delays in giving people money they've already earned.
Academic research has shown how longer waiting periods for payment hurt workers and shorter ones help them. For example, one study found that retired couples who receive their individual monthly Social Security payments on staggered weeks fare better economically than those who get them at the same time. Another study found that higher pay frequency not only improves household financial liquidity, but it can even reduce credit card borrowing between pay days.
There's little doubt that higher inflation, increased housing costs, and other economic factors have exacerbated these problems for many families. All this raises an important question: in an era in which transactions occur instantly, why should one's pay be different? Frankly, why should workers have to wait at all?
We recently conducted survey research to better understand the current frequency of pay for full-time workers in the U.S., as well as how decreasing waiting periods between paychecks might help them and their families. We found that over three-quarters of people are paid only once or twice a month, and 8 percent of workers are still being paid monthly.
There's a strong sense that this system isn't working for workers and their families. More than half would like to be paid at least once a week. Roughly 7-in-10 individuals in households making less than $75,000 said the same, as did a similar proportion of those in families enduring challenging financial circumstances. Half of workers under 30, and nearly two-thirds of Black and Latino workers, said that increasing their pay frequency would be very or extremely beneficial to their mental wellness. Broad cross-sections also felt that more frequent pay would help them better manage their bills and expenses.
To anyone who has worked for a paycheck, none of these findings should be a shock. But what might surprise you is that it's quite easy for companies to pay their people more frequently. It's an outdated mindset, not technology, that keeps paychecks tied to antiquated pay cycles. For example, my company continuously calculates take-home pay, taxes, health care premiums, retirement contributions, and other withholdings for our customers and their employees, regardless of the duration between pay cycles. We also give our customers the ability to offer their employees in U.S., Canada, and the U.K. the option to get paid at the end of every day or shift worked.
The argument that more frequent paychecks can help workers isn't new. In 1886, former Governor George Robinson signed the groundbreaking Massachusetts Wage Payment Act, which required employers to pay workers at least once a week. Today, there are pay frequency laws in every state except Florida and Alabama. This includes a requirement in Michigan, New York, and seven other states for workers in certain industries to be paid weekly.
At a moment when workers face higher costs of living and other economic struggles are real and rising, it's time for a new paradigm shift. This is especially true for the 44 percent of workers in the U.S. who don't make a living wage. Increasing pay frequency can't solve every ill, but it is a fast and free way to give them greater agency, choice, and flexibility in managing their family's every day and unplanned expenses. It's their money, they've earned it, and they shouldn't have to wait.
Jason Rahlan is the global head of sustainability and impact at Dayforce. He has previously held a number of roles in the public, nonprofit, and private sectors. This includes time at Chobani, the Human Rights Campaign (HRC), the U.S. Department of State, and the U.S. House of Representatives. He is currently a member of the New York Stock Exchange (NYSE) Sustainability Advisory Council as well as a board member for the Center for Family Support (CFS) Foundation.
The views expressed in this article are the writer's own.