United States: "Daily Pay" And Cryptocurrency: Will Advances In Technology Change How Wages Are Paid?

Last Updated: January 23 2018
Article by Benjamin M. Ebbink

Technology seems to be advancing faster than we can keep up. These advances impact the employer community as well—even regarding basic things such as how, when, and in what manner wages are paid.

Take two recent examples straight from the headlines.

Two Modern Trends May Impact Pay Practices

First, as the Society for Human Resource Management (SHRM) recently reported, many employers are utilizing "daily pay" or "instant pay" apps that allow employees to receive their wages daily or more frequently than the common payroll schedule. Many employees favor this method because it allows them to access their wages immediately when faced with unplanned emergencies, such as automobile repairs or other expenses.

Second, as reported BNA Bloomberg, paying wages in cryptocurrency (such as bitcoin) is becoming more common, particularly for American companies with international workers. A number of third-party payroll platforms have emerged recently that either enable employers to make a cryptocurrency deposit to be converted to local currency when transferring to a worker's account, or vice versa. For international employees, these options may be attractive as they reduce complications and costs associated with international payroll, particularly for employees in parts of the world without developed banking systems or stable currencies.

Technology can be a great thing, and can greatly benefit both employers and employees. But just because technology makes something capable doesn't necessarily mean that it is lawful in every instance.

Daily Pay Issues

Take daily pay. Jurisdictions regulating the frequency of wage payments generally allow an employer to pay on a more frequent schedule than required. For example, in California, state law specifically provides that it does not prohibit the payment of wages "at more frequent intervals, or in greater amounts, or in full when or before due," as long as other provisions of law are not contravened. But employers still need to consider how more frequent pay (regardless of what payment method) may implicate a host of other issues and obligations.

For example, employers who are tempted to utilize a daily-pay app or similar platform should consider that the practice could necessitate complex reconciliations when properly calculating the "regular rate" and overtime pay, which are based on the employee's total remuneration and hours actually worked for the entire workweek. Additionally, in many ways paying daily runs counter to a common desire among employers to pay as infrequently as possible due to the administrative burdens and costs that recur each time payroll is processed. As just one example, state paystub or wage statement requirements usually apply at the time of the wage payment. There also is the matter of calculating legally-required deductions, which often correlate to the length of the pay period. Employers should closely consider all applicable requirements before increasing the frequency of wage payments.

Bitcoin And Other Cryptocurrency

Similarly, wage payments in cryptocurrency (regardless of frequency), could raise a whole host of issues that employers should consider before taking the plunge into the digital payment world.

First, employers must ensure that non-exempt employees are paid the applicable minimum and overtime wages. Some employers have faced these types of issues already with respect to employees paid in foreign currency. The U.S. Department of Labor has provided some guidance by its finding that a salaried employee who was paid partially in foreign currency had indeed met the minimum salary requirements for an FLSA exemption.

Second, employers must ensure that all applicable withholding and deductions are made and remitted appropriately. Last I checked, the IRS didn't accept bitcoin.

Third, employers need to evaluate whether any of these platforms charge fees to the employees. Some states have specific rules that employees must be afforded an opportunity to access or withdraw the full amount of their wages without being charged a fee. Moreover, there could be a violation in any jurisdiction if these fees cut into legally-protected wages due under FLSA or similar state or local provisions.

Finally, we've seen some pretty significant spikes and falls in the value of bitcoin, to name just one cryptocurrency, in the last few months. What if you deposit the full amount of an employee's wages in cryptocurrency at midnight, but by the time the employee wakes up to access the wages, the value has plummeted 30 percent? The volatile nature of cryptocurrency may simply be inviting problems and litigation.

The Bottom Line

No doubt technology can be tremendously valuable, and these new advances in payroll practices may be very beneficial to both employers and employees. Nonetheless, particularly given that these forms are still evolving, if an employer desires to offer payments in such ways, the best practice is not to mandate payment, but rather permit employees to "opt in" voluntarily. Probably not a good idea to walk into your workplace one day and announce to your employees that, "Guess what? From now on we're paying you in bitcoin!" For one thing, short notice could cause a violation of yet another type of provision in some jurisdictions.

Do your homework in consultation with employment counsel before implementing the latest technology, and minimize the risk of a lawsuit later.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Benjamin M. Ebbink
In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions