The History of Payroll and On-Demand Pay

Apr 22, 2022 8:00:00 AM

It’s unclear when payroll was invented, but sometime around 3100-3000 BC in Mesopotamia (southern Iraq), someone kept a record on a clay tablet of the amount of beer given to workers as part of their daily rations. This means that one of the earliest writings found anywhere in the world was a payroll. Pretty cool, right?

Payroll has been through a lot in the last century or so. From the 16th Amendment to Social Security Payroll Deductions and beyond, managing payroll is constantly in flux. Yet, as we look to the future, one thing is clear: on-demand pay is here to stay. 

Payroll Timeline

1909:  The 16th Amendment is signed, allowing the US government to collect income tax from all Americans. 

1935:  President Franklin Roosevelt signs the Social Security Act, implementing the first set of payroll taxes to fund social security and unemployment insurance programs. 

1947:  General Motors establishes a way to automate payroll. 

1957:  ADP became one of the first companies to begin the shift from manual to automated payroll processing. 

1964: Direct debit becomes general use in the UK to save money on printing and handing out physical checks. 

1978:  The alternative minimum tax is enacted. 

1980:  The desktop computer made it possible for tons of payroll companies to emerge. 

1982: The American Payroll Association is founded.

1992:  Social Security payroll deductions is introduced. 

1993:  Proliant opens up as a business providing accounting services and support to clients across the Southeast. 

2016:  The Payroll industry continues to automate and innovate, introducing concepts of on-demand pay, early access to earned wages, and all disbursements into payment cards.

2019:  Proliant introduces ReadyPay Today to the world.

2020: the World Health Organization (WHO) declares COVID-19 a pandemic, shaking every industry in the world to the core and leading to more companies investing in new solutions for recruitment, benefits, and payroll administration. 

2021 to Present Day: On-Demand Pay is the Future of Payroll 

Since the beginning of the pandemic, workers across the U.S. have experienced immense struggles, especially those in the service industry surviving on hourly pay. With store closures, massive job cuts, and the daily risks to their health, many of these workers left their jobs searching for something better. 

As a result of the turmoil of the past few years, many hourly workers are now holding out for jobs that will offer higher pay, better benefits, and an enhanced sense of security for both their health and their finances. And on-demand pay seems to be a much-desired benefit that is attracting many people back to the service industry. 

83% of all U.S. workers believe they should have access to their earned wages at the end of each workday or shift. (Forbes)

On-demand pay, or early access to earned wages, offers financial security for hourly employees who often live paycheck to paycheck. Working long shifts and receiving a paycheck the same day makes financial planning much easier, especially if there is an emergency (sick child at home, car breakdown, personal injury, etc.). 

Gone are the days when employers had to cut a physical check to their employees. We are well into the digital age, and on-demand pay has become the answer to a lot of the troubles caused by the pandemic for hourly workers. 

Benefits of On-Demand Pay

On-demand pay is an excellent tool for recruitment and retention for any business. Employers who offer early access to earned wages see a 30% increase in recruitment and a decrease in employee turnover by 40%. Additionally, employees that receive daily pay are more punctual, and their employers see a marked reduction in absenteeism. 

78% of U.S. workers in The Harris Poll said access to on-demand pay would increase their loyalty to an employer. (Forbes)

Everyone wants to have more control over their finances, so it makes sense that employees would respond so favorably to on-demand pay solutions, especially in today’s constantly changing economic atmosphere. Early access to earned wages is a simple benefit to add to your offerings, so it just comes down to finding an on-demand pay solution that will suit your needs. 

ReadyPay Today is a Flexible On-Demand Pay Solution that Meets the Needs of Your Business

ReadyPay Today is the most flexible on-demand pay solution in the industry. Proliant’s answer to early wage access will delight your entire workforce and increase productivity and retention. It’s also a powerful recruitment tool, providing an edge in this super competitive labor market. 

Here’s what makes our on-demand pay solution so special: 

  • Hourly and salaried employees have early access to earned wages.
  • Our solution guarantees you stay 100% compliant with the IRS. 
  • Daily pay perks can be made voluntary or mandatory. 
  • Daily payment thresholds allow you to manage your cash flow. 
  • There are various options for pay cards.

If you’re interested in learning more about ReadyPay Today or other Proliant payroll solutions, visit our solutions page or schedule a consultation by clicking the button below. 

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About Proliant

Proliant puts the human in human resources. We provide a fully integrated, cloud-based HCM solution that simplifies payroll and HR processes. The company serves small to large clients in multiple industries in all 50 states and is committed to providing the highest quality customer service in the industry.

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