Compensation in Islam

Compensation is defned as the beneft (money, material or kind) received

for the performance of work. Money is regarded as the direct
compensation while other benefts come under indirect compensation.
Another word which is interchangeably used with compensation! is
wages. "n economic terms wages means the compensation, which a
person receives, for his mental or physical work.
#rophet Mohammed (pbuh) has always preached and practiced the act of
doing $ustice to everyone in all a%airs of life including the business and
employment. &e (pbuh) has emphasised to be $ust and kind with the
employees and labours. #rophet Mohammed (pbuh) cursed the one who
employs a labourer and gets the full work done by him but does not pay
him his wages ('ukhari). (his hadith clearly indicates the care and
concern he (pbuh) had regarding the rights of the labours and employees,
especially in relation to compensation.
Allah (swt) says in the )uran, *+(hen every soul will be compensated for
what it earned, and they will not b wronged (i.e., treated un$ustly), ()uran
-.-/0). Allah (swt) also says in the )uran, *+(hey will every soul be (fully)
compensated for what it earned, and they will not be wronged, ()uran
1.020). (hese verses make it e3plicit that on the 4ay of 5udgement man
shall be fully recompensed for his deeds, the deeds being good or bad,
small or big, and none shall be treated un$ustly. (he other aspect of the
)uranic verse referred
deeds and none shall be treated un$ustly. (he same principle should be
followed in worldly dealings. (he workers should receive their wages and
the employers their proft in accordance with this )uranic rule.
#rophet Mohammed (pbuh) said, *Allah said, " will be an opponent to
three types of people on the 4ay of 6esurrection, the one who makes a
covenant in My 7ame, but proves treacherous, the one who sells a free
person and eats his price and the one who employs a labourer and takes
full work from him but does not pay him for his labour, ('ukhari). (he
hadith states that on the 4ay of 6esurrection, #rophet Mohammed (pbuh)
is going to stand against three category of people and third category of
people are those who take full work from the employees and do not pay
him for the work done. (his is a very frm warning to the people to give
fair compensation to its employees.
8ages are a form of compensation. "slam o%ers a very reasonable
solution of wage problem which is based on $ustice and fairness and
protects the interests of both the employer and the employee. 8ages,
according to "slam, are to be determined in e9uitable manner, without
harming the interests of any party, keeping in view the teachings of
"slam. Allah says in the )uran, *+ you do not wrong, nor are you
wronged, ()uran -.-:;). Allah also says in the )uran, *"ndeed, Allah
ordered $ustice and good conduct+, ()uran 02.;<).
#rophet Muhammed (pbuh) has also said, *(hey (your slaves or
servants) are your brethren, Allah has placed them under your control=
so whoever has his brother under his control should feed him from what
he (himself) eats and give him clothes the like of which he (himself)
wears= and do not impose on them task which should be too hard for
them, and if you impose on them such a task, then help them (in doing
it), ('ukhari and Muslim).
(he problem of wages is very important as it a%ects the whole society. "f
the workers do not get fair and reasonable wages, it will not only a%ect
their subsistence but also their purchasing power. And if a large portion
of the population has no purchasing power, it would adversely a%ect all
those industries which are supplying consumer goods to the working
class. Moreover, in$ustice to working class would lead to discontentment,
frustration, agitation and strikes. (hus if the labourers are deprived of
their $ust share from the national income, it would be in the long run an
economic suicide for a country. (hus, "slam highly emphasis on giving
fair wages to the labourers.
(hus, the employer and the employee should treat one another as
brothers and not as master and servant. (hey should not wrong each
other and show $ustice and kindness in their relationship. (he employer
should not forget that contribution of the labour in his produce is
considerable. &e should, therefore, pay reasonable wages to an
employee to enable him to en$oy a reasonably decent living.
(he minimum wage rate in an "slamic society will be determined
keeping in view the basic human needs which include food, shelter and
clothing. A worker shall be paid ade9uate wages so that he can meet
e3penses on his and his family!s food, shelter and clothing. &e should
also be provided for his children!s education and medical treatment of
his own self and his family. "t is reported that #rophet Muhammad (pbuh)
used to prescribe minimum wages for a person engaged in some
government $ob with a view to provide him decent living. &e used to
say, *>or a ?overnment servant, if he is not married, he should get
married= if he has no servant, he may have one= if he has no house to
live, he may build one and anyone who e3ceeds this limit is either a
usurper or a thief,. (his yardstick f3ed by #rophet Muhammed (pbuh)
should be kept in view while f3ing minimum wages.
#rophet Mohammed (pbuh) said, *#ay the labourer his wages even before
his sweat dries, ("bn Ma$ah). (his hadith mainly speaks about the
promptness to be adopted in order to make the payment to the labourer.
(he hadith also discourage to withhold the wages of any labourer.
"t is narrated by "bn @Abbas that, *8hen the #rophet was cupped, he paid
the man who cupped him his wages, ('ukhari). "n another narration by
Anas (ra), he said, *(he #rophet used to get cupped and would never
withhold the wages of any person, ('ukhari). (his two hadiths also
emphasis on the aspect of paying the wages soon after the work is done
and avoid withholding it.
#aying the remuneration on time has a lot of benefts to o%er. "t ensures
desired behaviour, it motivates a person, it helps in retaining the
employee and ultimately leads to $ob satisfaction.
"slam gives two important principles with respect to compensation. >irstly,
not to e3ploit the labourers and to pay the compensation based on $ustice
and fairness and protects the interests of both the employer and the
employee. Aecondly, to pay the labourers on time and avoid withholding
of any sort. (he Muslim faith teaches that work is sacred and a form of
worship and that fair employee compensation is paramount. 8orkers and
employers should have a relationship of brotherly love and not patron to
subordinate. (he employers should think of employees as members of
their families. (his type of relationship will help the organisation to grow
and improve in leaps and bounds.
Ayed BaCim