Salaries can be paid in cryptocurrency, Dubai court rules

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Wages in the UAE can be paid in cryptocurrency if the terms are clearly defined, according to a new judgment from the Dubai Court of First Instance.

This decision, made in case number 1739 of 2024 (labour), follows a prior case from 2023 where a similar claim was initially denied by the court.

According to a note published by law firm Wasel & Wasel last week, the 2023 case involved an employee whose contract included both fiat currency and EcoWatt tokens.

“The plaintiff’s employment contract stipulated a monthly salary in fiat currency and an additional 5,250 EcoWatt tokens, a form of cryptocurrency,” wrote Mahmoud Abuwasel, a Managing Partner at Wasel & Wasel.

“The dispute centred on the defendant’s failure to pay the EcoWatt token portion of the salary for six months and the allegedly wrongful termination of the plaintiff’s employment,” Abuwasel added.

In 2023, the Dubai Court of First Instance ruled against this claim, owing to what it said was a lack of a precise valuation of the EcoWatt tokens. At that time, the court had required tangible evidence of the digital currency’s value in fiat terms, reflecting a more traditional approach to financial dispute, Abuwasel noted.

But in an evolutionary approach, a similar case in 2024 has resulted in the court’s ruling mandating an employer to compensate the worker with both the overdue fiat amount and the missing EcoWatt tokens.

It’s unclear if the defendant is the same company which was taken to court in 2023. Nevertheless, Abuwasel said the ruling is a “significant step forward.”

“The court is now accepting and enforcing cryptocurrency as part of wage payments, provided that the contract clearly defines these terms,” he noted.

The decision reinforces the importance of clear and precise contractual terms, ensuring that both traditional and digital forms of payment are adequately addressed in employment agreements.

“This evolution in legal interpretation is a positive development for the integration of cryptocurrencies in business practices,” said Abuwasel.

“It sets a precedent for future cases and underscores the UAE’s commitment to adapting to the changing financial landscape.”