Salt Labs, a rewards platform aimed at hourly workers, has secured $10 million in pre-seed funding, led by Fin Capital and featuring Anthem Venture Partners and other investors.
The company’s goal is to enable hourly workers to own the long-term value of their work by modernizing the total rewards structure for frontline workers, according to CEO Jason Lee.
The Salt platform, set to launch this spring, will enable contract workers to earn rewards for every hour worked. The rewards can be redeemed for goods and experiences, similar to other rewards programs, or transferred to family and friends.
Salt Labs has more ambitious plans for the platform, including adding a “vesting” feature to allow workers to earn additional rewards by working at a given job for a specific period of time. Lee believes that Salt will offer an ideal solution to companies struggling to hire workers outside the tech sector, as they are having to raise wages multiple times in an environment where most companies are looking to reduce expenses. Salt Labs aims to better align enterprises’ long-term interests with those of their workers.
However, some workers may bristle at the suggestion that virtual currency is the answer to companies’ retention problems, instead of higher pay. According to a survey from Bankrate.com, more than half of respondents said that their incomes hadn’t kept up with rising household expenses amid persistent high inflation. A report from the Economic Policy Institute found that as of June 2022, 14% of gig workers in the U.S. earned less than the federal minimum wage and that 26% earned less than $10 per hour.
Gig workers face significant hardships due to subminimum wages, and they are more likely than salaried workers to live in households that don’t seek medical treatments because of cost, go hungry because they can’t afford to eat, or frequently skip utility bills. As a result, turnover tends to be high among contractors. The Economic Policy found that more than half intended to find a new job within the next three months.
Despite these challenges, Lee argues that earning “Salt” can convince generally underpaid workers to stick around, as long as contractors can gain rewards across multiple jobs. The platform will be available to any worker who downloads the app. While Salt Labs’ vision is that by offering Salt as part of a total rewards plan, employers will be able to differentiate themselves towards potential employees in a tight labor market, only time will tell whether that vision comes to pass.
