In addition to placing first in men’s long-track speed skating, Canadian Ted-Jan Bloemen also became the first Olympic athlete to be paid in cryptocurrency while competing in PyeongChang this winter.

CNN reported the double world record-holder entered into a one-year sponsorship with ONG Social, a social network and crypto community, and CEEK VR, a developer of virtual reality experiences, in exchange for payment in cryptocurrency.

Bloemen is not alone. Bloomberg reports that a number of U.S. companies have begun paying their international workers in bitcoin through California-based Bitwage, which lets workers determine how much of their pay comes through cryptocurrency.

Bitwage by the numbers:

• About 200 employers are using Bitwage;
• About 65 percent of Bitwage employer clients are U.S. companies; and
• 95 percent are using Bitwage to pay international workers – but some are using the tool to offer domestic employees cryptocurrency payments, too.

With a Bitwage paycheck, employees can choose to either convert their money immediately into U.S. currency or retain the cryptocurrency in hopes that it will accrue value. While a boost to your investment portfolio may seem tempting, the fluctuating assets carry significant risk.

Moreover, being compensated in cryptocurrency may be illegal under federal and state laws.

Obstacles at the federal level

The Fair Labor Standards Act, which governs wage-related issues, “require[s] payments of the prescribed wages, including [minimum wage and] overtime compensation, in cash or negotiable instrument payable at par.” JD Supra says it is still unclear whether the U.S. Department of Labor deems cryptocurrencies as a lawful payment of wages under the act.

State level complications

Some states, such as Maryland and Pennsylvania, have Wage Payment and Collection Laws that require wages to be paid specifically in U.S. currency. Paying in cryptocurrencies would violate these state laws as they are currently written, as the virtual currencies do not belong to any specific country.

Many states also have regulations where employees are entitled to wages without incurring any costs, fees or encumbrances. As most cryptocurrencies levy a fee when converting to cash, paying wages with cryptocurrencies would be a violation to those state regulations.

Volatility concerns

After reaching a record-high value of nearly $20,000 in December, bitcoin’s price plummeted within weeks and had its worst first quarter in history in 2018.

With such vast fluctuations, cryptocurrencies can be extremely unpredictable in value. This can

make it difficult to remain compliant with minimum wage and overtime laws. If the value of the cryptocurrency drops significantly while an employer is still processing payroll, it could lead to incorrect compensation for the employee and violate minimum wage and overtime laws.

All considered, while cryptocurrency generates allure and headlines, it remains too unpredictable to fulfill workers’ fundamental rights to be paid fairly and reliably.

With more than 25 years of experience, the lawyers at Keller Grover have secured more than $100 million in recoveries for victims of wage theft. If you are facing a dispute with your employer, contact us at 866-663-3308 for a free consultation.