Yes, Islam permits Muslims to enter into work contracts with Non-Muslims, hypocrites and transgressors. The only condition is that the nature of the work has to be permitted by shariah and the work contract should not contain any element contradicting hukm shariah. So, for example, to be employed as a computer programmer under a kaafir or faasiq employer is permitted because the nature of the work (i.e. computer technology) is not specific to an ideology. The technological aspects of computer are not dictated by the belief or lifestyle. The other aspect is the purpose for which the technology is applied. For example, to enter into a work contract to develop a riba calculating software package will be prohibited. However, if the contract did not mention the purpose for which software package is developed, then this work contract is halaal.

Entering into contracts with Non-Muslims and hypocrites does not means they become friends automatically. Friendship and contract relationships are two  different issues and serve different objectives. The relationship between employer and employee should be dictated by the terms included in the work contract. Moreover, the contract should not contain vague and abstract terms such as 'you will be given a decent salary'. This would mean that each party interprets the term 'decent' in different ways. Also, in the current climate in Maldives where the masses are eager to demand ''rights'' and ''to prove how corrupt he is'', it is extremely important that any kind of relationship which necessitates seeing someone's face for more than 5 minutes and any transactions that goes beyond drinking lavaazaa coffee, should be based on a sound contract. This would ensures that both parties entering into a contract are able to take comfort in the fact that they cannot be accused of not fulfilling an obligation that was not entrusted to them in the first place.

Since contracts define relationships between people and the fact that society consists of relationships, individuals, thoughts, convictions and a system to organise these relationships, we can extend this discussion to understand the dynamics of a society and how Islamic system can create harmonious relationships between people of different faiths. Here is a brief explanation of semantics:

Relationships - The vital energy in human beings drives them to fulfill their instincts. The relationship between employer and employee is one such example.

Concepts - Having said that relationships amongst people arise due to their motivation to satisfy needs, humans satisfy their needs according to concepts they believe in. For example, the terms and conditions included in a work contract are the concepts they adhere to.

Convictions - Believing in concepts is not enough to cement strong relationships in the society. People's sentiments towards these concepts must be the same. For example, Muslims are allowed to trade. The rules of trade have been given by Allah (swt) Both parties involved want to profit from the deal. However, the ''concepts'' of Islam prohibit ''Riba,'' but one party, due to his love for wealth, may disregard the rule while the other opts to obey Allah (swt). This difference between them is due to the disparities in the sentiment. Therefore the people should have the same feeling for these concepts (commands or ideas).

Systems - The System is the mechanism by which people resolve problems. For example, if one party in the contracts refuses to adhere to the terms stated in the contract, the system will enforce the other party to fulfill the terms. Therefore, the established system applies certain concepts and  forbid their violations. Thus the people live the life they convinced of and feel its tranquility.

Now, it may be asked: How can Non-Muslims believe in Islamic concepts and have conviction in them ? To understand this issue, we should examine the 3 basic relationships that exist within societies namely 

1) Relationship between Creator and the people, 

2) Relationships between people, 

3) Relationship between people and the Authority (State). 

The Islamic system does not interfere in people's private belief. Non-Muslims are allowed to worship their religion, but forbidden to propagate their religious views in public. Also, Islamic state does not enter into the privacy of the homes of Muslims to check if their Aqeedah is pure. Relationships between Muslims and Non-Muslims are based on the Shariah rules even if the Non-Muslims don't believe in the Islamic aqeedah from which the law emanates. That is to say, Non-Muslims entering into contract with Muslims should make sure that their contracts do not contain any terms that contradict Shariah. Otherwise, this contract would not be considered valid by the judicial courts if dispute arise between two parties. The third relationship that exist in the society is the relationship between the people and the State (rulers). It is this relationship that fosters people's affairs according to a specific ideology. The confidence of Non-Muslims in the Islamic authority stems from the fact that no people, or any group, can be the origin of law. Hence the rights of the Non-Muslims are fixed and known to the them before they decide to become citizens of the state. The fact that Allah (swt) alone is the Legislator means that there is no cause for rivalry or faction-forming amongst citizens. There will be no cause for contempt, competition and rancour amongst the citizens. No single group could usurp the rights of others. Nor by the nature of legislature would anybody believe that there was potential for a group to undermine their rights. The outcome of this is that what is paramount in the eyes of the citizens is their citizenship. The Muslims will view the Jews and Christians as citizens and vice versa. Harmony would arise as all matters are arbitrated by a source entirely independent of the citizens, Allah (swt). Thus, the motivation for the Non-Muslims to obey Shariah laws is due to the simple fact that Islam ''works'' and guarantees justice. Furthermore, Allah (saw) obliges the Muslim ummah to do dawah to mankind by presenting Islam as a working model.

Conclusion

Muslims can enter into contracts with Non-Muslims, but are forbidden from treating them as friends (awliyaa).

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