Q: There is no cash available this month to cover payroll. May I delay payment of salaries?
A: There is a mitzvah to pay wages promptly. However, an employer does not violate the prohibition of delaying wages if he does not have funds to pay the employee. (Choshen Mishpat 339:10)
If the employer does not have sufficient funds to cover the payroll entirely, he must still pay whatever amount he is able to. Furthermore, if the employer has accessible funds in the bank or entrusted with someone, he is required to procure them, even if it involves time and effort. (Ahavas Chesed 9:7,10; Rama C.M. 104:4)
If the employer does not have funds, but has assets that can be sold, there is a dispute whether he is required to sell them in order to raise cash for payment of wages. (See R. Akiva Eiger C.M. 339:10) If he can borrow money in order to pay promptly, it is proper that he do so. (Pischei Teshuva 339:8; Ahavas Chesed 9:7)
In any case, a person should not hire a worker if he does not expect to be able to pay him promptly, unless the worker was told ahead of time and he agreed to receive payment later. (Ahavas Chesed 10:12)
Authored by Rabbi Meir Orlian
These articles are for learning purposes only and cannot be used for final halachic decision. The Business Halacha email is a project of Business Halacha Institute (www.businesshalacha.com) and is under the auspices of Rav Chaim Kohn.