As digital currency picks up steam, it’s becoming increasingly obvious that it has the potential for more. With the government trying to get involved, and plenty of under-the-table payments going on for different freelance jobs, it begs the question: Is it possible (or legal) to pay employees with bitcoin and similar digital currencies? We’re here to answer that question for you.
Um … Maybe?
First of all, it might be legal to do so. But that’s it — might be. Workforce explained it well in an article from this February: The IRS treats bitcoin like property, and it’s possible the Department of Labor will not consider it equal to American currency. This means that if you pay your employees with bitcoin or other types of cryptocurrency, there’s a chance you can get slammed for not paying your employees the required minimum wage.
Regardless, there are tax things to be aware of if you do decide to risk it. Primarily, you need to keep in mind that cryptocurrencies are considered property by the government, so you need to file for them as such. This is dependent as well on how your cryptocurrencies were acquired, which you can read more about here.
Heading Into the Future
Even with this said, cryptocurrencies as proper forms of payment aren’t unrealistic. And they may come sooner than we think: companies like Ecobank have built 3 million new customers over the period of six months! The powers that be can’t stop the tides from turning.
Cryptocurrencies are already adding to our culture anyway. The government, corporations, and other miscellaneous industries are beginning to use blockchain technology for research and experiments. Accountants and financial companies like Quickbooks have started innovating new ways for cryptocurrencies to be included in invoices and analyses. So not only is crypto-technology being used, but it’s being taken and innovated upon to make other systems more efficient. It seems as if it’s just a matter of time before all currency is treated with the same regard.
What Will It Take?
Simply put, the systems in place aren’t quite ready yet to come down hard on whether cryptocurrencies act as official currency or not, which means paying your employees with them is risky. With that said, what will it take? We seem to be moving in a direction where bitcoin and the like are not only being used but influencing the world around them. To be used as actual payment by an employer, some things will need to happen.
First, the Department of Labor will have to make an official stance on whether it is a good enough cash equivalent. Frankly, the changing dollar value of cryptocurrency will be one of the biggest challenges. Second of all, the semantics of it must be figured out. For instance, it’s been recommended that if you pay your employees with cryptocurrencies, you should outsource your payroll. And third, it’s going to require people letting go of their reliance and stubbornness over how things have been. Some people simply do not like change, and they will have to learn that change isn’t always a bad thing, nor does it need to destroy what was already there. Cryptocurrencies are additions to the dollar as they’re being proposed here, not erasers.
What do you think? Would you risk paying your employees with cryptocurrencies? Would you not? Let us know in the comments below.