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More Companies Explore Offering Cryptocurrency to Pay Their Employees

  • More companies are exploring the possibility of offering cryptocurrency as part of their employees’ compensation
  • Benefits include the potential for workers to receive higher value compensation and the ability for employers to attract younger job candidates
  • However, crypto payments also come with several complications, and one human resources group recommends restricting their use to bonuses

Summary by Dirk Langeveld

More companies are considering cryptocurrency as a form of payment for their workers, regarding the compensation as a good way to appeal to younger job applicants.

Advocates for cryptocurrency as at least part of one’s paycheck see it as an opportunity to earn more than if they were just paid in cash. Companies whose products and services already complement the blockchain system are well-positioned to offer cryptocurrency payments, and this form of compensation also avoids certain fees and costs such as those involved in paying international workers.

However, cryptocurrency payments also come with a number of complications. The value of cryptocurrency can fluctuate considerably, and employees could end up paying tax on income that has diminished in value. Employers could be on the hook if the value drops below the employee’s base wages or if they lose access to their crypto holdings. In addition, the Fair Labor Standards Act does not allow businesses to pay base wages in currencies that have not been issued by the government.

Companies interested in incorporating crypto payments into their compensation should be sure they are in compliance with any federal, state, and local laws on compensating employees. The arrangement should also be drawn up in writing to ensure that an employee agrees to receive cryptocurrency as part of their compensation.

The Society of Human Resource Management recommends that employers avoid using cryptocurrency as part of workers’ regular compensation. However, they say companies could use crypto for supplemental payments such as bonuses.

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