Recently, there has been lots of media coverage highlighting Bitcoin mining, block chain technology, and the rise in value of certain cryptocurrencies. Consequently, the general public is realizing that – while volatility is inevitable – Bitcoin (BTC) and other types of virtual money offer the chance to become rich. Therefore, it is reasonable to ask why employers don’t pay their staff’s salaries in cryptocurrency. Here are four obstacles that make a mass adaptation of that process hard:
Check or Cash Payments are Mandatory Under Some Laws
The FLSA (Fair Labor Standards Act) is one of the major federal laws that relate to staff wages in America. This states that employers have to satisfy some of the minimum wage rules, by paying staff with checks or cash. At the moment, Bitcoin payments are not applicable, and this is also the case for overtime pay.
Cryptocurrencies Might be Classed as Securities
The SEC (Securities and Exchange Commission) made a statement recently about cryptocurrencies. This highlighted that cryptocurrency investments can rapidly move into other geographical territories, without the owner realizing — which increases the potential risk.
Moreover, the SEC might eventually decide that some cryptocurrencies should be classed as securities. Should this happen, employers would need to adhere to the extra laws for securities, as well as the salary-related laws mentioned previously.
Employers Might Feel Apprehensive
The large fluctuations in value linked to cryptocurrencies, like Bitcoin, might make employers reluctant to pay their staff via this unconventional method. Likewise, they may believe that not enough vendors accept Bitcoin payments yet, despite the growth in numbers.
Each Country Has Different Tax Rules
For employers that frequently hire remote staff, who live in one country but pay tax in another, the various rules that different countries have, with regards to tax and cryptocurrencies, could delay the adaptation of this P2P payment method.
Firms with large numbers of international staff might believe that calculating the logistics is too time-consuming and difficult. In this situation, staff who have a Bitcoin wallet and want to pay in cryptocurrency, via a private key and digital signature, could volunteer to research the details then report this back to their bosses.
In Some Firms, Staff are Paid in Cryptocurrency
In spite of the above obstacles, some innovative firms do make cryptocurrency payments to their staff. Revealingly, none of these firms are in America, so not all of the points mentioned above will be applicable. Geographical variations aside though, if increasing numbers of firms worldwide decide that paying staff in cryptocurrencies makes sense, this might lead to other organizations following suit.
Firms that are in the cryptocurrency industry already may even ask staff, during the recruitment process, whether they will accept virtual currency payments.
If you want to explore the option of receiving cryptocurrency payments, it is vital to understand the volatility related to cryptocurrency values, and the fact that employers might not be conversant with digital payment methods. They may need you to do some research and offer guidance.