Why “how you get paid” should be your most important job consideration

When looking for work, we tend to think about certain key factors. Will the job be something I enjoy doing for many hours per day? Will I get along with my coworkers? What’s the salary or hourly rate?

But we might forget about a simple question that can make or break our financial livelihood: How easy or difficult will it be to get paid by my new employer?

Think about what happens when you aren’t paid accurately or on time. You might have to spend a lot of time going back and forth with your employer’s accounting department. You might not be able to make your rent, or you may need to eat into your savings. In other words, “how you get paid” is far more than an administrative detail, and treating the subject as an afterthought is a mistake.

Several years ago, I worked very hard as a birthday party hostess for a new children’s play center. I earned $11 per hour, but when my employer realized I was receiving up to $100 a day in customer tips, they cut my hourly pay by 50%. I wasn’t able to buy a car as planned that year due to the unexpected loss of income, and from that moment forward, I gave a great deal of attention to pay. What is it going to be, how will I get the money, and how can I ensure I fairly receive it?

The next time you apply to a new employer, here are three things to keep in mind.

What is the pay structure – and is it legal?

This is an especially relevant question if you are thinking of working for a small business or startup. Your new employer should have a plan in place for paying employees in accordance with the Equal Employment Opportunity Commission and the Fair Labor Standards Act in the U.S. This means that it must:

• Procure an Employer Identification Number (EIN)
• Ensure new employees file a W-4 form
• Schedule pay periods that correspond to IRS tax withholding
• Have a payroll administration system
• Report payroll taxes regularly
• Have policies in place for overtime, sick and vacation time, and other paid time off (PTO)
• Understand what constitutes an employee versus an independent contractor and is classifying workers correctly

To determine if your target company is a reputable business, check out online databases such as FEIN Search, Dun & Bradstreet, Experian, and Guidestar. For a fee, you can gain access to an organization’s EIN and current financial standing.

Note that if you are applying to a large company with many offices or locations, it’s probably safe to say it checks the right boxes. You should, however, confirm the details with the human resources professional managing your hire.

What are employees saying?

When deciding to take any new job, it’s worthwhile to ask how people in your role today feel about their experience. If at all possible, try to meet these workers during your interview process.

The conversation can be casual, but should include questions like: “What’s a normal day like working here?” “Do you feel your manager values and appreciates you?” And on the topic at hand: “Is getting paid simple and reliable?”

A Glassdoor search is useful in uncovering potential red flags because comments are often published by former employees, and therefore likely to be both honest and informative. Alternatively, take a look at your own network to see if you’re connected to someone who works there (or are connected by a degree of separation) to gather additional intel.

How flexible is the compensation system?

Technology has made the pay process easier than ever, and ideally your new employer won’t make you count the days until your next paycheck. Many companies are now allowing workers to access funds as soon as they’re earned, helping them bridge the gap between pay cycles.

Especially in times like these, we have to expect unanticipated life expenses. If a potential employer has a flexible pay system, it can help you avoid needing cash advances and payday loans. These methods may get you out of immediate trouble, but you could pay high interest rates, drive down your credit score, and get stuck in a vicious debt cycle.

Some on-demand pay solutions also help you manage your finances overall, including checking balances, tracking transaction history, and drawing funds for new purchases. You can go to work with a clear head, knowing that your earnings will be available when you get home, and that you have what you need to protect your financial health.

Remember, a job is not real if you can’t pay your bills with it. Even if you’re excited about an opportunity, doing your homework will pay off later.

Learn more about getting paid on-demand