Calculating a penalty for delayed payment
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Q: I ask Allah that you are in good health and well-being. I would like to ask Your Eminence about the fees that the General Organization for Social Insurance charges on their dues when they are delayed. I am a citizen who owns a commercial establishment with a small number of foreign workers under my sponsorship. According to the regulations of the Social Insurance Organization, we must pay 2% of the salary the foreign worker receives from us to the Social Insurance Organization on a monthly basis to cover what they call occupational hazards, which I and other establishments are committed to. However, if we delay paying the 2% to the insurance, even by a month, they calculate a penalty called a late payment penalty on us. My question here, Your Eminence, is: Is it permissible from a Sharia perspective for me to pay them that fee, knowing that their services in exchange for that 2% fee are not used by us except in the event of a physical injury to the worker at his workplace, which is a situation that we do not actually use, as we have the mandatory medical insurance provided by the state, may Allah protect it, for its employees. Please inform us, may Allah reward you with good.
The mandatory medical [insurance] provided by the state, may Allah protect it, for its employees. Please inform us, may Allah reward you with good.
A: Calculating a late payment penalty on one who delays paying the amounts that are obligatory to pay is not permissible; because it is an increase in the established right, and it is riba (usury or interest), which is not permissible to take or give; due to the generality of the saying of Allah the Exalted:[Al-Baqarah 2:278-280] .
The mandatory medical [insurance] provided by the state, may Allah protect it, for its employees. Please inform us, may Allah reward you with good.
A: Calculating a late payment penalty on one who delays paying the amounts that are obligatory to pay is not permissible; because it is an increase in the established right, and it is riba (usury or interest), which is not permissible to take or give; due to the generality of the saying of Allah the Exalted:
(278) O you who have believed, fear Allah and give up what remains [due to you] of interest, if you should be believers. (279) And if you do not, then be informed of a war [against you] from Allah and His Messenger. But if you repent, you may have your principal - [thus] you do no wrong, nor are you wronged. (280) And if someone is in hardship, then [let there be] postponement until [a time of] ease. But if you give [from your right as] charity, then it is better for you, if you only knew.
يَا أَيُّهَا الَّذِينَ آمَنُوا اتَّقُوا اللَّهَ وَذَرُوا مَا بَقِيَ مِنَ الرِّبَا إِنْ كُنْتُمْ مُؤْمِنِينَ (278) فَإِنْ لَمْ تَفْعَلُوا فَأْذَنُوا بِحَرْبٍ مِنَ اللَّهِ وَرَسُولِهِ وَإِنْ تُبْتُمْ فَلَكُمْ رُءُوسُ أَمْوَالِكُمْ لا تَظْلِمُونَ وَلا تُظْلَمُونَ (279) وَإِنْ كَانَ ذُو عُسْرَةٍ فَنَظِرَةٌ إِلَى مَيْسَرَةٍ وَأَنْ تَصَدَّقُوا خَيْرٌ لَكُمْ إِنْ كُنْتُمْ تَعْلَمُونَ
Source
www.alifta.gov.sa
The Arabic text is copied verbatim from the original source, without any edits.