18 April 2018

Turkey: Can your salary be paid in Bitcoin?

Bitcoin can be briefly defined as a new virtual payment system. It provides an online payment opportunity for the purchase of goods and services. Transactions in Bitcoin can be made between users without the need of an intermediary, as the system that does not require a central pool or sole manager, making it the first non-centralised currency.

Can your salary be paid in Bitcoin?

As in many other areas, Bitcoin also raises a lot of questions in the field of labour law. The most basic of these is whether salary, notice and severance payments can be made with virtual money instead of "real" currency.
In Turkey, the labour law procedures and principles are regulated under Labour Law No. 4857 dated 22 May 2003 ("Labour Law"). In accordance with Article 32 of the Labour Law, remuneration is defined as "the amount paid in money to an individual by an employer or a third party in exchange for a job." In addition, it has been stated with regards to payment systems that "salary, premium, bonus and all kinds of remunerations are paid, as a rule, in Turkish lira at the workplace by hand or through a private bank account."
Pursuant to Article 99 of the Turkish Code of Obligations, "If the payment is to be made in a currency other than the national currency and if there is no provision in the employment agreement regarding payment in kind, then such payments should be made in Turkish lira in accordance with the currency conversion rate on the date of payment." In other words, "a currency other than the national currency" can be determined by an agreement and payments can be made with these other currencies. The Supreme Court has made decisions in this regard.
Another important piece of legislation is the Regulation on the Payment of Salary, Bonus and Other Remunerations through Bank Accounts. Pursuant to Article 10, "Employers that employ at least five employees in a business are obliged to pay the net amount of remuneration through private bank accounts."
In light of the above, a technical impossibility seems to arise. It should first be discussed whether virtual money can be treated as a "foreign currency". Secondly, the obligation to make payments via a bank account for businesses employing more than five employees presents an obstacle to payments with virtual money. We believe that any non-official currency should be treated as "foreign currency" and that salary in businesses employing less than five employees can be paid in virtual money (if so agreed in the employment agreements). Furthermore, for businesses employing more than five employees, we believe it would be illegal to make payments in virtual money due to the technical impossibility arising from the relevant regulations.  
In line with this trend, we believe that the legal regulations preventing the use of virtual money will soon be amended and that Supreme Court decisions will clarify the vague points of this issue.


We're on top of legal developments in Austria and CEE. Are you? Subscribe to our weekly updates!

Further reading:

Austria: News from the crypto-world
Austria: FMA Clarifies its Regulatory Approach towards Initial Coin Offerings (ICOs)
Are ICOs the future of fund raising?