Is it permissible to delay payment of salaries to employees?
It is not permissible to delay payment of salaries to employees beyond the time when they are due, which is when the work is completed or at the end of the agreed-upon period. If the agreement is that the salary be paid monthly, then it must be paid to the worker at the end of each month; delaying it with no excuse is regarded as unfair and unjust. Allaah says (interpretation of the meaning):
“Then if they give suck to the children for you, give them their due payment”
So Allaah commanded that they be given their payment as soon as the work is done.
Ibn Maajah (2443) narrated that ‘Abd-Allaah ibn ‘Umar (may Allaah be pleased with him) said: The Messenger of Allaah (peace and blessings of Allaah be upon him) said: “Give the worker his wages before his sweat dries.” Classed as saheeh by al-Albaani in Saheeh Ibn Maajah.
What this means to hastening to give him his dues as soon as the work is done. Similarly, when the agreed-upon period ends (which is one month in the case of most employees nowadays), then it is obligatory to hasten to give him his dues.
Al-Manaawi said in Fayd al-Qadeer:
It is haraam to delay and postpone when one is able to pay. The command to give it to him before his sweat dries is a metaphor for the obligation to pay him as soon as the job is done, even if he does not sweat, or if he sweated and it has dried. End quote.
The company owner’s delay in paying the salaries is wrongdoing which makes his honour and punishment permissible, as the Prophet (peace and blessings of Allaah be upon him) said: “Withholding of payment by a rich man is wrongdoing.” Narrated by al-Bukhaari (2400), Muslim (1564).
And the Prophet (peace and blessings of Allaah be upon him) said: “If one who can afford it delays payment, his honour and punishment become permissible.” Narrated by Abu Dawood (3682), al-Nasaa’i (4689) and Ibn Maajah (2427), classed as hasan by al-Albaani in Irwa’ al-Ghaleel, 1434.
What is meant by his honour becoming permissible is that one may say, “So and so delayed paying me and he wronged me.” Punishing him means detaining him. This is how it was interpreted by Sufyaan and others.
The Standing Committee was asked about a boss who did not give his workers their salaries until they traveled to their homelands once every year or two, and the workers agreed to that because they have no choice, job opportunities are few, and they need the money.
They replied: What this boss should do is to give his workers their salaries at the end of every month, as is the custom among people nowadays. But if there is an agreement and they accept that the salary will be paid all together after one or two years, there is nothing wrong with that, because the Prophet (peace and blessings of Allaah be upon him) said in a saheeh hadeeth: “The Muslims are bound by their conditions.” End quote.
Fataawa al-Lajnah al-Daa’imah, 14/390
Based on the above, you should advise the company owner and explain to him that it is haraam to delay the employees’ salaries and it is haraam to harm them.
And Allaah knows best.