Some employers are now paying their employees with cryptocurrency rather than using traditional fiat currencies. Cryptocurrency is still a relatively new phenomenon, as is the infrastructure which it runs on—the blockchain. Even so, uses like this are beginning to become more common.
If you read tech blogs, watch the news, or listen to the latest chit-chat at work, you've probably noticed that everyone is talking about "the blockchain" and cryptocurrency these days. Now that there are cryptocurrency millionaires, many investors are rushing into the crypto space in the hopes of a big payday. But the practical applications of cryptocurrency are more likely to have a lasting impact than the predictable surge of consumer interest in the assets themselves.
BitWage Makes it Possible:
People have been using Bitcoin and other crypto tokens to pay for goods online for several years, but a company called BitWage has created a platform employers can use to pay their employees in Bitcoin.
With BitWage, all an employer has to do is purchase the USD equivalent of what they need to cover their payroll in Bitcoin. After they have obtained all the Bitcoin they need, they can instantly send the Bitcoin to an employee's crypto wallet. The employee then has the option to either keep the funds in Bitcoin or exchange them for a fiat currency.
One major problem that BitWage has overcome in order to make this possible is that the platform enables employers to deduct taxes in Bitcoin, eliminating the need for deductions to be calculated separately. BitWage is available in every State in the USA.
Is it Bitcoin or Cryptocurrency?
"Bitcoin" and "cryptocurrency" are often confused or used interchangeably, but there are actually two different things. Cryptocurrency is an asset class that refers to tokenized digital currencies. Bitcoin is a type of cryptocurrency.
What Are the Advantages of Paying Employees with Cryptocurrency?
Although we will have to see broader adoption of cryptocurrency as an asset before payment in cryptocurrency becomes commonplace, it is clear that there are several advantages.
1. Simplified money transfer for global companies.
Cryptocurrencies like Bitcoin don't have the same geographic restrictions as fiat currencies, since they can be used globally and converted into almost any national currency. This makes it very easy for companies that need to pay employees in multiple countries.
2. Enhanced security.
We already know that blockchain is a highly secure means of relaying information. Paying employees with cryptocurrency is actually more secure than using traditional means because all movements are recorded on the ledger and because crypto wallets are next to impossible to access without proper permission.
Paying employees in cryptocurrency gives them the opportunity to save crypto assets, spend them, or convert them to their own national currency if they would like to. Over time being paid with Bitcoin or another cryptocurrency could help your employees to build up some crypto investments if they choose to do so.
Advantages of Crypto Payments:
- Simplified money transfer for global companies.
- Enhanced security.
Legal Challenges to Paying Employees with Bitcoin:
It is important to note that according to the Fair Labor Standards Act (FLSA), Bitcoin payments are not a legal way to meet minimum wage or overtime obligations. However, any payments beyond this could be made using Bitcoin or another cryptocurrency with the consent of the employee. Because of this legislation the United States sees far less usage of cryptocurrency as a means of payment than other, less regulated countries.
Keep in mind the laws concerning cryptocurrency uses are bound to change and adapt as the technology develops, so there may be less regulatory intervention as time goes on.
Payment through cryptocurrency is still in its infancy, but one day it may be commonplace. Perhaps there are people in your company who work remotely, or perhaps you employ workers in other countries. If you've been looking for a faster, safer, more efficient way to pay your workers, a service like BitWage could be the answer.
If you decide to pay your employees with cryptocurrency, make sure you consult State and Federal labor laws to avoid violating any rules.