Pay advance app Earnin is rolling out a new feature to let people immediately access unemployment benefits - and it comes as unemployment claims are skyrocketing

• Pay advance app Earnin is rolling out a new feature that lets people access unemployment benefits early.
• Earnin says it's the first company industry-wide to provide early access to unemployment benefits.
• Nearly 10 million people filed for unemployment in March. Congress just passed a historic enhancement to unemployment benefits as part of its $2 trillion coronavirus stimulus bill.
• Unemployment checks could take months to arrive for millions of Americans, but many will need that money sooner.
• Visit Business Insider's homepage for more stories.

As millions of Americans need immediate financial assistance amid shutdowns tied to the coronavirus outbreak, one company is promoting a new feature to let people immediately access unemployment benefits early.

Unemployment numbers reached record highs last month, with nearly 10 million Americans newly filing for unemployment. Congress recently passed a historic $2 trillion stimulus that includes a $600 weekly increase in unemployment benefits for up to four months. The bill also provides a one-time $1,200 stimulus check for all Americans.

Earnin, an app that gives users advance pay on paychecks, is releasing a new feature that will be deployed in mid-April, the company told Business Insider. Earnin says it's the first company industry-wide to provide early access to unemployment benefits. But Earnin's new feature won't include early access to $1,200 stimulus checks because it's too difficult to predict when they'll arrive, the company says.

"We believe this is an industry first, and demonstrates how Earnin is deploying engineering and product resources to meet the rapidly shifting needs of people who find themselves in a new income environment," CEO and Founder Ram Palaniappan said in a statement to Business Insider.

People who already use Earnin will have access to the feature once their first unemployment payment has hit their bank account. New members will be able to contact Earnin's team directly to verify that they qualify for unemployment benefits before accessing the money early.

The app does business by verifying users' employment status and then allowing them to take money from the app ahead of their paycheck, encouraging users to add a "tip." Earnin then automatically withdraws that money, along with the tip, from the user's bank account on payday.

There's no clear timetable for when unemployment benefits or stimulus checks will become available to people who just filed. Some will receive benefits as early as next week, but for roughly 70 million Americans who don't already have direct deposit information on file, benefits could take at least a month to arrive, according to an estimate by Brookings Institute economic studies fellow Aaron Klein.

It's inevitable that online companies like Earnin are swooping in to provide pay advances, Klein says, given how long it will take for stimulus payments to reach Americans.

"Policy makers operate under the false assumption that the federal government can quickly get money in the hands of people who've been impacted by the COVID recession," Klein told Business Insider. "People can't wait months to get a paper check when they have to pay bills today."

While Earnin insists it doesn't provide payday loans - the "tip" that users pay is not a flat rate, and can be dialed down to zero - critics have said the app is functionally a payday lender. Both Democrats and Republican lawmakers have criticized payday lenders in years past for making money from people seeking stimulus money or government benefits early.

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