I work for a utility company and was told by my boss to add a late payment charge for chronic late paying customers every month. Please advise regarding the halacha on this matter.
It is permitted to charge a one-time fine for late payment in a sales / utility context.
There are three conditions for the permission to charge a fine:
1. That the fine doesn’t grow over time. If the fine is time-related, and grows every week and month, it is not permitted.
2. The time for payment is not extended. If somebody who pays the fine has the time for payment extended Poskim are stringent.
3. The buyer didn’t ask for a loan in advance.
Therefore, it is permitted to charge a one-time fine. If the fine is ongoing, and grows over time, this will be a problem.
However, the fact that the company, rather than a private individual, is charging the fine, which is added room for leniency. Because it is not you, rather the boss, who decides on the matter, and it is not your personal responsibility, you will not have to take any action.