In recent years, more consumers, merchants, and financial institutions have accepted cryptocurrency as a form of payment for everyday products and services. Last November, mayors of two major U.S. cities signaled what may be the next phase of cryptocurrency’s melding into the mundane, when they announced they would accept paychecks in cryptocurrency. On Twitter, Mayor Francis Suarez of Miami said he would accept his next paycheck in Bitcoin, to which Mayor Eric Adams of New York responded that he would accept his first three paychecks in Bitcoin.
Just as the Mayors are trying to project their cities’ images as leaders in the technology and the crypto-wave, employers are considering paying employees’ wages or other compensation in cryptocurrency in order to position themselves as forward-thinking companies that embrace change and the new. Relatedly, employees may want to be paid in cryptocurrency because of its potential to grow in value. Some experts predict that Bitcoin’s price will continue to grow to $100,000, and therefore some employees may want a portion of their salary to be paid in this dynamic form as a way to structure part of their income as a long-term investment as soon as it’s paid.
Before taking the plunge, however, employers should take note of the New York’s Office of the Mayor’s January 20, 2022 press release on Mayor Adams’ cryptocurrency paycheck:
Due to U.S. Department of Labor regulations, New York City cannot pay employees in cryptocurrency. By using a cryptocurrency exchange, anyone paid in U.S. dollars can have funds converted into cryptocurrency before funds are deposited into their account.
Here are some things employers should keep in mind if they are considering paying their employees in cryptocurrency.
Employees Must Be Paid in U.S. Currency or Its Equivalent
The Fair Labor Standards Act (FLSA) is the key federal legislation that governs many aspects of both public and private employment in the United States….
