Workers at Church's Chicken, Pizza Hut, and Checkers can now getexpedited pay as U.S. restaurants grapple with a labor shortagethat's not showing any signs of abating.

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Restaurant chains are pulling out all the stops to attract andretain cooks and cashiers amid persistently low unemployment. Thelatest move: same-day and next-day paychecks. Starting in June,eight Church's Chicken restaurants will offer employees half oftheir earned pay the day after their shift. The test will gaugewhether the 50 percent is enough for workers, and the idea is toroll it out more widely going forward. It's not a loan, and thereare no fees.

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“It will give the employee the chance to get spending moneyquicker,” Church's CEO Joe Christina said in an interview. “Somepeople just can't wait two weeks to get paid.”

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With an accelerating economy and the U.S. jobless rate at a49-year low, restaurants are hurting. The dining industry isgrowing increasingly desperate to attract and keep qualityemployees, and simply raising wages isn't always enough. That's whythey're getting creative with hiring parties, text-messagerecruiting, and signing bonuses. McDonald's Corp. is even goingafter senior citizens to flip burgers.

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Labor is “the number-one item” discussed among management,Christina said. “In all my years, it's the toughest labor marketthat I can remember.”

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Restaurants are being squeezed as fewer teens enter theworkforce and higher minimum wages go into effect in parts of theU.S. Also, higher pay for lower-skilled workers at companies suchas Amazon.com, Walmart, and Target are making it more difficult forrestaurants to compete for talent.

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Atlanta-based Church's reached into the city's northern suburbsto hire another company, Instant Financial, to offer the perk.Church's and sister brand Texas Chicken have more than 1,500 storesworldwide.

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Venture capital-funded Instant Financial also works withBloomin' Brands Inc.—the parent of Outback Steakhouse—and recentlyadded Checkers & Rally's Restaurants as customers. InstantFinancial CEO Steve Barha said that the tight labor market has madeinstant pay “almost a requirement” over the past year for thedining industry.

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On average, restaurant employees take out $28 with his company'sservice after working, Barha said. Instant Financial doesn't chargeany fees to workers but rather makes money by charging the employerfor the service.

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The majority of working adults are living paycheck to paycheck,according to a recent survey from thenonpartisan research organization NORC at the University ofChicago. The study found that 51 percent of Americans wouldn't beable to cover necessities without dipping into savings if theymissed more than one paycheck.

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That's why Pizza Hut franchisee Erik Bittner is consideringwhether to mention the perk in the ads he uses to attract deliverydrivers as he competes for their services with Uber TechnologiesInc. and Lyft Inc. He added the benefit in March through the BranchMessenger Inc. mobile app.

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“The expectation in the future from employees is going to bethey want their pay now,” said Bittner, a partner at BittnerRestaurant Group, the owner of 12 Pizza Huts in Pennsylvania. “'Whydo I have to wait two weeks?'”

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Branch, which also provides its service to Taco Bellfranchisees, charges a flat fee of $3.99 for workers to get up tohalf of their wages the same day they worked, and offers three-daytransfers for free. The Minneapolis-based startup has seen 150percent growth among restaurant employees since introducing theearly-wage part of the app in September.

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Most Branch early-pay users are spending the fast cash ontransportation, groceries, and unexpected bills, Branch CEO AtifSiddiqi said. Expedited pay can “help keep employees happy.”

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Meg Waters

Meg Waters is the editor in chief of Treasury & Risk. She is the former editor in chief of BPM Magazine and the former managing editor of Business Finance.