Salary in bitcoins?
Nadine van Pol
by Nadine van Pol
Remuneration in bitcoins can by now no longer be called a novelty, yet there do not yet seem to be many companies using it in the Netherlands. This is not surprising, since cryptocurrencies like bitcoin are currently not yet seen in the Netherlands as a traditional and legal means of payment, but only as a “means of exchange”. So far, paying salary in bitcoin seems mainly to be a statement by employers who like to radiate that they are ahead of the curve and have modern policies.
Could a payment in cryptocurrency like bitcoin constitute wages within the meaning of Article 7:610 of the Dutch Civil Code? The law lists five permissible forms of wages, and upon review, it appears that payment in cryptocurrency does not fall under any of these forms of wages. However, this does not mean that as an employer you cannot pay salaries in cryptocurrency. If you agree on a wage in bitcoin, this would qualify as a compensation owed by the employer to the employee with respect to the stipulated work and the performance by employee of the job. Salary in bitcoins also falls under the labour law wage concept, and employees can enforce payment thereof; also, for example, in cases of employee disability.
Given employees’ rights under the Minimum Wage and Minimum Holiday Allowance Act, payment in cryptocurrencies will only be possible as an additional payment on top of the statutory minimum wage to which the employee is entitled. After all, this law requires a non-cash payment of wages to the employee, and a payment in cryptocurrency does not qualify as a non-cash payment.
The employer also has a duty of information to the employee, and will, therefore, need to carefully inform the employee about the payment of part of their salary in cryptocurrency, and the associated risks. It is advisable to record in writing the fact that the employee was informed by the employer about these factors in order to prevent any future problems or confusion.
If an employee regrets their choice and prefers to receive euros instead of bitcoins after all, they can ask the employer, on the basis of Article 7:620 (2) Dutch Civil Code, to still provide payment in standard currency (euros) from the second upcoming payment day. The conversion into euros will, in principle, take place at the exchange rate applicable at the time of payment. This holds a risk for the employer.
The moment cryptocurrency is seen as an accepted and prevalent form of money in today's society, government legislatures will eventually move and adapt to this change. However, how far and how fast, time will tell. We watch with curiosity the speed at which the usability of the use of cryptocurrencies will develop in labour law.
Baat Legal Services B.V. is part of Baat accountants & adviseurs, a consultancy firm focused on accountancy, fiscal matters and advice. Baat Legal Services provides entrepreneurs with superior quality legal advice regarding employment legislation and corporate law, including cross-border issues.
GGI member firmBaat accountants & adviseursMaastricht, Roermond and Sittard,The NetherlandsT: +31 43 325 87 00
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Nadine van Pol is Head of the firm's Legal Department, advising clients on a wide range of matters concerning employment legislation, including various types of contracts, negotiations, illness and dismissal. Contact Nadine.
