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The law is that if an employer does not pay by the tenth of the month, they have to pay a fine for each day late. Is that “extra” money considered ribbis?




This does seem to be ribbis, because a fine that increases with time is considered ribbis. What can be done is that the employee can either make a heter iska with the employer, or he can tell the employer before he pays the extra money that he is not accepting that money as payment, rather that it will be considered as if he is holding the money for the employer until he returns it to him.

Best wishes


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