Bartering and Bitcoins: The Legality of Alternative Wage Payments

Trading services is as old as commerce itself, but in a modern economy such as Canada it has largely faded away with the rise of currencies, central governments and tax codes. That being said, while cliches of exchanging labour for a bed and a meal may no longer be commonplace, alternative payment models continue to exist. A simple example could include a pizzeria paying a cook with a large pepperoni thin crust in exchange for staying an hour late.

will-work-for-food

While paying in pizza may be a mutually beneficial arrangement to the employee and the employer, it is also not compliant with Employment Standards, which reads:

How Wages Are Paid

20  An employer must pay all wages

(a) in Canadian currency,

(b) by cheque, draft or money order, payable on demand, drawn on a savings institution, or

(c) by deposit to the credit of an employee’s account in a savings institution, if authorized by the employee in writing or by a collective agreement.

Can’t get much clearer than that. While there is certainly no rule against providing staff pizza, it cannot take the place of regular or overtime wages.

But it makes one wonder whether employee payment systems are ripe for disruption, in much the way that Amazon has disrupted shopping, Uber has disrupted taxi services and AirBnB has disrupted the hotel industry? Bitcoin enthusiasts certainly think so, and envision a world where they can be paid in a truly international, virtual cryptocurrency, immune to inflation and central bank meddling.

No doubt there are a number of workers currently being paid in bitcoins or other virtual currencies, these arrangements are also offside with the Employment Standards Branch (they are not in Canadian currency). However, I also suspect that any companies and workers electing to be paid this way really don’t care, in much the same way that many AirBnB hosts are non-compliant with municipal by-laws or Uber users are unconcerned with government regulations on taxi services. Disruptive technologies have tendency to break rules now, become mainstream, and have societal regulations adapt to the new norms they create. Time will tell whether Bitcoin follows in the same path.

David M. Brown
Kent Employment Law
236-420-1946
david@kentemploymentlaw.com
LinkedIn: https://ca.linkedin.com/in/davidmjbrown
Twitter: @davidmjbrown

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