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Among other things: can the employee afford it, can the employee pay it back, etc etc.I think you're right. That makes the employer a credit provider.
So if the employer isn't registered, the employee should report them to the NCR.
A salary advance is a loan against your own salary. It is legally allowed and cannot attract any interest in the favour of the employer.How? (What law) Many people get/take salary advances or loan money from their work. It is a thing.