Transforming Payroll and Worker Empowerment with Jason Lee, Founder of Salt Labs and DailyPay
In this episode of The Room Podcast, we sit down with Jason Lee, the founder of Salt Labs and DailyPay, to explore his journey from finance to fintech entrepreneurship. Salt Labs, Jason’s latest venture, focuses on empowering workers to maximize their earnings potential, while DailyPay revolutionized the way employees access their wages.
Key topics of this episode include disrupting traditional employee benefits, the role of technology in enhancing financial well being and building fintech startups that prioritize the needs of every day workers
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T1: Disrupting traditional employee benefits
Both of Lee’s companies, DailyPay and Salt Labs, serve the purpose of disrupting traditional employee benefit and payroll structure. Lee could see that frontline workers are often living paycheck to paycheck, and need the value of their work to be recognized immediately. However, the structure of benefits is not conducive to immediate gratification, and the lack of lasting, built benefits can cause a gap in employee ownership and loyalty. These issues are systemic, and produce a structure where employees are underserved and employers are handling immense turnover.
What Lee and his cofounder(s) understood early on, was that in order to actually disrupt the industry, the companies (employers) “had to want it”. Lee identified turnover — which is a huge cost for large companies — as a new framing for this glaring problem with employee benefits. In his own words, “turnover is bad for business”, and Lee noted McDonalds as a great example — the company spends $3000 on every turned over employee. Therefore, with DailyPay he aimed to disrupt the payment structure. With Salt Labs, he and his team are solving the turnover problem by not only giving employees financial tooling, but also building company loyalty.
T2: Role of technology in enhancing financial well being
With years of experience at Goldman Sachs, Lee saw a way to enable financial health for frontline workers in DailyPay and Salt Labs. The crux of Daily Pay was to use technology to complete payment daily, without companies having to run payroll daily. This product makes earned wage access available to employees on the day that they work. By removing the work from employers, and leveraging his financial background in securitization of assets, Lee and the DailyPay team created an entirely new “asset” on wall street — allowing workers’ to get paid immediately without any burden on the companies themselves.
Lee sees his work at Salt Labs as an extension of the mission of DailyPay. Salt Labs allows employees to earn a new, nun-fungible asset (cleverly called “salt”), which is funded by the employer. Today, slat can be redeemed for certain prizes such as tickets and experiences. The benefit of the Salt Labs ecosystem has already proven ot enable financial health of the employees — Lee shared that the company has seen employees save 55% of their earned salt (up from -2% of earned wages), and a 54% improved retention rate. The numbers prove out Lee’s theory about building loyalty, self confidence, and saving habits. In the future, Lee sees a path for building an equitable system in which employees are interacting with financial systems which were previously unavailable to them — such as ETFs. Salt Labs is a financial vehicle for employees to build out savings while employers build out “retention levers”.
T3: Building a fintech start up that prioritizes the needs of every day workers
Ultimately, both of Lee’s businesses have relied on his conviction that employees needed it. In his own words, Lee said that all he needed to do to convince others was to tell them to “talk to anyone living paycheck to paycheck”. Though the foundational problem was there, Lee still had to prove out the perceived risk, and demonstrate to financial institutions and large employers the ability to be paid back by ‘blue chip’ customers, To prove out these concepts, Lee and his DailyPay confounders put personal fortune on the line, and then set out to prove product-market-fit on a specific, consumer target: Uber drivers. The early success of DailyPay (and Uber’s attention to the product), was a signal to Lee that his own assumptions were correct, and DailyPay’s success followed.
When Lee went on to build his next fintech start up for frontline workers, his past success made fundraising easier. Lee acknowledges that they were “fortunate” to have this tailwind, but that solving hard problems for a longitudinal workforce is an “arduous” task. That said, Lee is encouraged by the challenge. To tackle the larger shift in the workforce, Lee knows that his fintech company, Salt Labs, ultimately needs to rebuild that “incentivization”. In gamifying employee rewards and quantifying hard work beyond a paycheck (which often is spent in entirety), Salt Labs builds wealth, savings habits, and confidence — which can be redeemed for a savings bond, or a trip, or kept to grow employee’s balance.
