Is My Income from a Workers’ Compensation Board Lawful?

Answered by Shaykh Irshaad Sedick

Question

I work as an accounts representative for a workers’ compensation board, which provides insurance for workplace injuries. My role is mostly customer service: I assist employers with the status of their accounts, advise whether they are required to register by the government, and at times process premiums.

When a transaction I process results in interest, I reverse it on my end.

At times, however, I must convey balances to be paid that have accrued interest prior to the current period. Is this work permissible? If not, what can I do? I am the sole earner in my family.

Answer

In the Name of Allah, the Most Merciful and Compassionate.

Working as an accounts representative at a workers’ compensation board is permissible, and the salary you earn from it is lawful.

The heart of your role, namely customer service and account administration, is itself a permitted line of work, and your practice of reversing interest wherever you are able only strengthens this.

Merely conveying a balance that already includes interest accrued beforehand does not render your own earnings unlawful.

The governing principle in our school is that the default ruling for matters is permissibility (ibaha). [al-Suyuti, al-Ashbah wa al-Naza’ir] We depart from this default only where there is a clear cause for prohibition.

When we weigh the lawfulness of any job, we look first to the nature of the work itself and to the soundness of the contract of hire (ijara).

A contract of hire is sound when the service contracted for is something lawful and the wage is known.

In your case, you are hired to perform administrative and customer service work: assisting employers with their account status, advising them on their registration obligations, and processing payments.

Each of these is a permissible service in itself. Since the benefit you are hired to provide is lawful and your wage is paid in exchange for it, your contract of hire is sound, and your salary is a lawful earning.

The point that troubles you is balancing the interest accrued previously. Here it helps to recall that the Prophet (Allah bless him and give him peace) named those directly implicated in interest as the one who consumes it, the one who pays it, the one who records it, and its two witnesses. [Muslim]

You do not draw up the interest, you do not record it into the account, and you do not stand as a witness to the contract. You are relaying information about an obligation that already exists, and where it lies within your power, you actively reverse the interest rather than impose it.

This places you outside the roles the Sacred Law censures, and your earnings remain lawful.

This is all the more so if the board you serve is a government-mandated compensation scheme rather than a commercial insurer, since a compulsory statutory arrangement of this kind does not fall under the commercial insurance contract that scholars treat as legally problematic for its uncertainty and interest.

Practical Guidance

Continue exactly as you have described: reverse interest wherever you are able, and keep your own hand clear of generating or benefiting from it.

Beyond the legal ruling, there is a station of God-consciousness to aspire to, for Allah (Most High) says, “And cooperate in righteousness and piety, but do not cooperate in sin and aggression.” [Quran, 5:2]

Acting on this verse, it is praiseworthy to lean your work, as far as you reasonably can, toward the permissible side of your duties and away from any involvement with interest.

You are not obliged to leave this position, and you should set your heart at ease on that point.

If one day you wish to seek work even further removed from any contact with interest, that is a commendable aspiration of wara’ (scrupulousness), but it is to be pursued calmly and without hardship to you or your family.

The Sacred Law does not ask the sole earner of a household to abandon a lawful income before another is in hand.

Hold to your livelihood, make your intention sound, and trust that Allah (Most High) rewards the one who seeks the lawful.

The Messenger of Allah (Allah bless him and give him peace) said, “Seeking a lawful livelihood is an obligation upon every Muslim.” [Tabarani, al-Mu’jam al-Awsat – Hasan, according to al-Haythami]

And Allah (Most High) knows best.

[Shaykh] Irshaad Sedick
Checked and Approved by Shaykh Faraz Rabbani

Shaykh Irshaad Sedick was raised in South Africa in a traditional Muslim family. He graduated from Dar al-Ulum al-Arabiyyah al-Islamiyyah in Strand, Western Cape, under the guidance of the late world-renowned scholar Shaykh Taha Karaan (Allah have mercy on him), where he taught.

Shaykh Irshaad received Ijaza from many luminaries of the Islamic world, including Shaykh Taha Karaan, Shaykh Muhammad Awama, Shaykh Muhammad Hasan Hitu, and Mawlana Abdul Hafeez Makki, among others.

He is the author of the text “The Musnad of Ahmad ibn Hanbal: A Hujjah or not?” He has been the Director of the Discover Islam Centre, and for six years, he has been the Khatib of Masjid Ar-Rashideen, Mowbray, Cape Town.

Shaykh Irshaad has fifteen years of teaching experience at some of the leading Islamic institutes in Cape Town). He is currently building an Islamic podcast, education, and media platform called ‘Isnad Academy’ and has completed his Master’s degree in the study of Islam at the University of Johannesburg. He has a keen interest in healthy Prophetic living and fitness.