Many employers have increasing numbers of lower income employees who may struggle with day-to-day issues of transportation, housing, food insecurity and inadequate health care. Employers can support lower income workers with benefits such as health care navigation and quicker access to pay.

Many people in the United States who struggle financially are employed full-time in industries with historically lower wages, such as retail, food service, hospitality and health care. While raising wages would seem to be an easy solution, employers in industries with historically low wages may not be able to pay above-market rates. However, these employers may find other ways to help lower-wage workers with financial, health and lifestyle challenges.

The challenges of lower-income employees are growing in prevalence. Potential evidence includes a 50% increase in major worker strike activity from 2021 to 2022.1 Many of these strikes were driven by wages, benefits and working conditions. In addition, a record number of Americans tapped their 401(k) plans in 2022 for hardship withdrawals to help with medical bills or prevent housing loss.2

This article outlines some of the basic issues for lower-income workers and offers suggestions for how employers can address the issues of those who struggle to make ends meet. These suggestions may also benefit other workers as they continue to contend with the impact of inflation.


One set of researchers measured the economic well-being of families by looking at eight dimensions: child care, employability, food security, health care security, housing security, transportation, reliance on assistance programs and capabilities.3 As inflation has risen, families have reported more difficulty affording some of the costs in those eight categories. A 2020 survey showed that nearly 25% of U.S. parents reported there had been times in the past year when they could not afford food for their family or to pay their rent or mortgage and they had struggled to pay for health care. In addition, 20% reported they had struggled to pay for child care.4

The adapted table below shows the demographic breakdown of these four categories: food, housing, health care and child care.5

Table: Percentage of Low-Income Parents Reporting Struggles With Sufficient Money in the Last 12 Months for the Following:

 To Buy Food Their Family NeededTo Pay Their Rent or MortgageTo Pay for Medical or Health Care Their Family NeededTo Pay for Childcare
All parents25%25%24%20%
Lower income52%52%37%38%
Middle income17%17%21%16%
Upper income5%4%6%4%

The individuals described in the table are all employed. The federal poverty level for a family of four was $30,000 in 2023.6 According to the U.S. Government Accountability Office, 70% of people in the U.S. who depend on government assistance programs work full-time but rely on government support for basic needs, such as Medicaid for health care and the Supplemental Nutrition Assistance Program (SNAP) for food.7

Financial Hurdles

Many lower-income employees face additional challenges in accessing the cash they need and are struggling to survive from paycheck to paycheck. They may get dinged with “junk fees” from their financial institutions, which are charges for overdrafts, bounced checks and late credit card payments. These fees further deteriorate their financial wherewithal and are often exorbitant. A 2014 study by the Consumer Financial Protection Bureau found that the median transaction amount that led to an overdraft was about $50.8 That means the cost of an overdraft fee amounts to a sky-high interest rate of 4,000%.9 On a positive note, the average overdraft fee was $26.61 for 2023, which has fallen by 11% compared to 2022,10 and some banks are eliminating these fees altogether. However, some employees do not have bank accounts, and others may turn to payday loans for needed cash between paychecks. These loans are one of the most controversial alternative financial services due to their staggeringly high interest rates—which can range from 200% to 600%—and the risk of users falling into substantial debt.11

As mentioned previously, employees may tap their retirement savings to meet emergency expenses, which further harms their financial stability while also creating tax penalties. And when employees struggle financially, it can affect their performance at work.12

Social Determinants of Health

Having a lower income is also linked to poorer health outcomes. Health care is expensive in the U.S., including for those covered by employer-sponsored health benefit plans. According to the Kaiser Family Foundation, about 50% of U.S. adults have difficulty affording health care costs.13 Health care costs often prevent people from getting needed care or filling prescriptions. About 25% of adults say they or a family member in their household have not filled a prescription, have cut pills in half or have skipped doses of medicine in the last year because of financial concerns.14 Economic stability is a social determinant of health (SDOH), which is defined by the Healthy People 2030 as the “conditions in the environments where people are born, live, work, play, worship and age that affect a wide range of health, functioning and quality-of-life outcomes and risks.” It is said that a person’s ZIP code has as much to do with their health status as their genetic code.15 Access to high-quality food and health care depends on safe housing, transportation and other environmental factors.

Employer Strategies

The challenges faced by low-income employees can be addressed through various strategies that add significant value to the employment value proposition without breaking the bank. The following are some suggested areas of focus:

Address Junk Fees

Employers can leverage their financial power with financial institutions to establish no-fee bank accounts for employees, helping them avoid junk fees and retain more of their money. Employees need access to bank accounts that don’t mandate balance requirements or charge fees for basic banking transactions. Employers can offer employees access to a free debit account option that is user-friendly and completely free of charges like overdraft fees, insufficient funds fees and bounced check fees. These accounts often feature debit cards but don’t have a check-writing feature to prevent bounced checks. If check-writing capabilities are a must for employees, employers can consider including an account feature that requires users to set aside the money for each check up front to prevent checks from bouncing due to insufficient funds when cashed. Employers may want to get started with this strategy by contacting their primary business bank, which might be eager to help a good customer.

Provide Quick Access to Pay

A shift away from the longstanding practice of weekly or biweekly payroll is making way for a new norm: daily pay. According to Forbes magazine, 83% of U.S. workers believe they should have access to their wages at the end of each workday.16 Employers can preempt payday loans by offering daily pay options through payroll firms that offer such programs or by adopting a new generation of third-party payroll automation platforms. A word of caution: Higher pay frequency has mixed effects. Employees may borrow less but experience more frequent periods of financial distress.17 Instant pay can also lead to less financial discipline. Because of these mixed results, employers should consider educating employees on basic financial management skills, such as budgeting and debt management.

Another approach to quicker access to wages are free, earned-wage access accounts. Employers know how much employees accrue in pay each week, and giving employees early, fee-free access to the money they’ve earned, without penalty or cost, is very popular for employees who increasingly want quicker access to their pay. Some employers place low caps, such as $300 to $500 per pay period, on the earned-wage access accounts so that they are used primarily for emergencies.

Offer Care Navigation to Address Social Determinants of Health and Build a Caring Culture  

Employes can consider offering care navigation services, which provide support to employees and their family members for navigating health care. For example, finding the right health care providers and dealing with multiple medical bills can be overwhelming for an employee who receives a serious diagnosis such as cancer. A care navigator can help employees understand their health benefits and connect them with resources that are often free. They can provide additional support such as finding transportation for low-income plan members or helping them tap into telemedicine options when transportation and missed time from work would be a hardship. They also can connect members with employee assistance programs (EAPs) that offer several free counseling visits. However, not all navigation providers are the same. Employers may want to look for firms that include care coordination, can proactively bridge health data and claims issues, and can address both health and access issues for better outcomes. A human-centric approach enabled by technology that uses smart data, such as apps or online access to care coordinators, may provide the best support for employees, particularly those with lower incomes. 

Offering care navigation may help demonstrate an employer’s commitment to establishing a culture of caring. This can increase job embeddedness, which is the likelihood that an employee will stay in their job because the value of staying outweighs the value of leaving. The author’s research suggests that the top predictor of job embeddedness is overall satisfaction with the organization.18

Other Benefits

Other programs that may help lower-income employees include the following:

  • Emergency savings accounts: Employers can help employees establish a savings account linked to the no-fee checking account with contributions deducted from their pay. Employers can consider offering an incentive program that allows employees to earn an employer contribution to these accounts by completing certain activities, or a contribution may be one way for the employer to express gratitude.
  • Hardship assistance: Some employers have a benevolent fund that is funded in part by the employer and in part by other employees. These funds can be used to help people following a crisis, such as severe damage to their home from a natural disaster.
  • Child care/elder care subsidies or on-site child care: One of the most significant challenges today’s workers face is the cost caring for others, including their children and elderly loved ones. Some employers with adequate facilities have created child care centers or places, such as a coffee shop or recreation area, for family members to spend time while the employee works. Some employers have facilities, programs and partnerships with elder care services to support employees who care for aging family members.
  • Flexible spending accounts for pretax medical and child care expenses as well as health savings accounts (HSAs): These tax-advantaged accounts can help employees accumulate money to cover high health insurance deductibles and child care costs.
  • Voluntary benefits: Offering access to benefits such as life, auto and homeowners insurance at discounted group rates with group underwriting can help the employee save money.
  • Subsidized or free meals and snacks
  • Tuition reimbursement plans: These plans help employees access education to improve their skills and potentially increase their pay. One challenge to this benefit may be the requirement for employees to pay the up-front costs of their education.
  • Financial education programs: Of course, education is key, and helping employees understand benefits and financial management, such as budgeting, go a long way.


Many employers have raised wages and are embarking on multi-year strategies to increase pay, but some employers lack the market flexibility or resources to offer above-market compensation. Implementing strategies to reduce junk fees, provide quicker access to pay and provide comprehensive care navigation are among the cost-effective tools that can not only provide meaningful help to employees and their families, but also support a culture of caring that fosters greater levels of productivity, engagement and job embeddedness.

Benefits Magazine Extras articles provide you with bonus content on a mix of benefits topics as well as deep dives and analyses on the latest benefit trends and compliance issues. International Foundation members can visit to view the full bimonthly print edition of the magazine.


<1> Margaret Poydock, Jennifer Sherer and Celine McNicholas. “Major strike activity increased nearly 50% in 2022: Upcoming Supreme Court case threatens workers’ ability to strike.” Economic Policy Institute.

<2> “Record Share of Americans Are Raiding Their 401(K) Plans Due to Hardship.” www.Cbsnews.Com. CBS Market Watch, February 6, 2023.

<3>“Well-Being and Stability among Low-income Families: A 10-Year Review of Research.” www.Ncib.Nim.Ni.Gov. PMC PubMed Central, October 25, 2020.

<4>Dana Braga. December 7, 2022. “One-in-four U.S. parents say they’ve struggled to afford food or housing in the past year.” Pew Research Center.


<6> “HHS Poverty Guidelines for 2023.” www.Aspe.Hhs.Gov. Office of the Assistant Secretary for Planning and Evaluation, January 19, 2023.

<7> “Low-Income Workers: Millions of Full-Time Workers in the Private Sector Rely on Federal Health Care and Food Assistance Programs.” U.S. Government Accountability Office, February 5, 2021.

<8> G. Flores and Todd J. Zywicki. Commentary on CFPB Report: Data Point: Checking Account Overdraft. George Mason Law & Economics Research Paper 14-45 (2014).

<9> Marc Anthony Fusaro. “Hidden consumer loans: An analysis of implicit interest rates on bounced checks.” Journal of Family and Economic Issues 29 (2008): 251-263.


<11> Karina.Sytnychenko. “What to Know Before Taking Out a Payday Loan to Improve Your Credit Score.” International Science Journal of Management, Economics & Finance 2, no. 2 (2023): 10-16.

<12>E. Thomas Garman, Irene E. Leech and John E. Grable. “The negative impact of employee poor personal financial behaviors on employers.” Financial counseling and planning 7, no. 1 (1996): 157-168.

<13> A. Montero, A. Kearney, L. Hamel and M. Brodie. “Americans’ Challenges with Health Care Costs.” Kaiser Family Foundation. July 14, 2022.


<15>G.N. Graham. Why Your ZIP Code Matters More “Than Your Genetic Code: Promoting Healthy Outcomes from Mother to Child.” Breastfeed Medicine. 2016 Oct;11:396-7. doi: 10.1089/bfm.2016.0113. Epub 2016 Aug 11. PMID: 27513279.

<16>Segal, Edward. “Most Workers Want To Be Paid Automatically Every Day According To New Poll.” Forbes, February 13, 2021.

<17> Brian Baugh and Filipe Correia. “Does paycheck frequency matter? Evidence from micro data.” Journal of Financial Economics 143, no. 3 (2022): 1026-1042.

<17>Eric M. Parmenter. “I Had a Bad Day but Tomorrow I Will Carry On: Nurse Burnout and the Relationship Between Psychological Capital and Job Embeddedness.” Ph.D. diss., The Chicago School of Professional Psychology, 2023.

Eric M. Parmenter, Ph.D., CEBS, REBC, RHU, SPHR, CLU, ChFC, is an organizational psychologist and vice president of health systems at Quantum Health. He has worked in the employee benefits business for more than 30 years as an advisor to midsize, large and health system clients and has deep experience in health plan strategy, design, prevention care, and productivity and behavioral economics. He leads the hospital industry vertical for Quantum Health.

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