Dubai Court Acknowledges Salary Payments in Cryptocurrency

• The court previously acknowledged the crypto aspect of an individual’s unpaid salary but did not order the employer to pay the tokens.
• The court enforcing crypto-related salary payments in a new case this year legitimizes daily payments using the asset class in the UAE.

The Dubai Court of First Instance recognized the validity of crypto payments as a valid medium of salary payments under employee contracts. This development occurred as the court ruled in favor of an employee who was owed EcoWatt tokens as a portion of their salary, and their employer failed to pay this part of their remuneration for six months.

The individual filed the case due to “unpaid wages, wrongful termination compensation, and other related employment benefits.” The court ordered the employer to pay the employee the tokens, as stated in their employment contract, which mentions the salary as 5,250 EcoWatt tokens and a sum of fiat currency per month.

Irina Heaver, a partner at NeosLegal, a UAE-based law firm, appreciated the outcome, “This ruling affirms that if an employment contract includes such terms, both the company and the employee must honor them. It is reassuring to see the court recognize that wages, whether paid in fiat or cryptocurrency, are the rightful entitlement of the employee for their agreed-upon work.”

The Court Ruled Differently In a Case Last Year

A similar case unfolded in 2023 but in a different manner. Although the court acknowledged the token portion of the remuneration offered to the plaintiff, it did not enforce the payment. A reason behind this was the employee’s duty to assign a fiat value to the amount owed by the defendant, and their not doing so. “This decision reflected a traditional viewpoint, emphasizing the need for concrete evidence when dealing with unconventional payment forms,” Heaver added.

As Dubai’s courts now recognize crypto salary payments, the UAE moves further toward being the top crypto hub, if not already. This legal milestone can push crypto to the forefront, as the assets find their place in daily transactions.

Heaver also added the court, relying on the UAE Civil Transactions Law and Federal Decree-Law No. 33 of 2021, effectively applied wage-related laws. “It is reassuring to see the court recognize that wages, whether paid in fiat or cryptocurrency, are the rightful entitlement of the employee for their agreed-upon work,” said Heaver.