Interest in an Employee Retention Program
Question
Shalom to the esteemed HaRav HaGaon shlita,
My wife works at “Nayax,” an Israeli company (more than 60% of the shares are held by three Israeli Jews), a company that deals with credit solutions.
This week the company announced a new employee retention program: they launched a program called ESPP, meaning that every employee is entitled to set aside 15% of his salary each month, and in return he will receive company shares at a 10% discount. In addition, the company insures him that if the share price drops, he will never lose the money that the employee set aside from his salary, plus the 10% discount that he received. He will receive the shares once every six months, according to the lowest price that was available during the preceding six months.
Is there a problem of ribbit in this program, since each month I am lending them from my salary and receive it only after six months together with additional benefits, or should one distinguish and say that since this is part of the employment terms and part of the salary, it is not a loan?
I will note that there is no issue regarding holding the shares (for those who are stringent), since I have the option to request after the six months not to receive any shares at all, but only the profits.
Thank you very much
My wife works at “Nayax,” an Israeli company (more than 60% of the shares are held by three Israeli Jews), a company that deals with credit solutions.
This week the company announced a new employee retention program: they launched a program called ESPP, meaning that every employee is entitled to set aside 15% of his salary each month, and in return he will receive company shares at a 10% discount. In addition, the company insures him that if the share price drops, he will never lose the money that the employee set aside from his salary, plus the 10% discount that he received. He will receive the shares once every six months, according to the lowest price that was available during the preceding six months.
Is there a problem of ribbit in this program, since each month I am lending them from my salary and receive it only after six months together with additional benefits, or should one distinguish and say that since this is part of the employment terms and part of the salary, it is not a loan?
I will note that there is no issue regarding holding the shares (for those who are stringent), since I have the option to request after the six months not to receive any shares at all, but only the profits.
Thank you very much
Answer
Shalom u’vrachah
Response of the rabbis of the Beit Hora’ah:
As long as the payment is received within the period of the employment contract, it is permitted.
The above permission is conditional on there being no option at the end of each month to choose how to receive the salary.
If there is an option to choose, one may send a message to the person in charge of payroll stating that you waive the right to choose each month.
If, in the event of dismissal within the six months, the money is not received immediately but only at the end of the period, this is prohibited.
Source
Shulchan Aruch, Yoreh De’ah, siman 176, se’if 6.
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