Do not withhold a worker’s wage… (Leviticus 19:13)
Withholding another person’s money or property is theft, plain and simple. It makes no difference how the property came into the person’s possession. In one situation, the rightful owner never even had the property in his hands: when he did a job but the one who hired him doesn’t pay on time.
Now, of course, there are different contractual arrangements that can be made between an employer and an employee. Most of us probably get paid weekly or bi-weekly. The Torah here refers specifically to a day laborer, who must be paid that night. Therefore, the rest of this verse says not to hold onto his wages until the next morning. In the case of a night worker, he must be paid the next day, not letting the sun set without doing do (see Deuteronomy 24:15). (These two verses reflect different scenarios in the same mitzvah, not two different mitzvos.)
This mitzvah applies to wages due for any reason: personal labor, hiring an animal or renting equipment. If the money is owed, it’s owed. If a person gives an object to someone to work on – whether it’s giving a suit to the cleaners or his car to a mechanic – he doesn’t owe the tailor or the garage money until he gets his property back.
If a person doesn’t pay his employee, he has violated this mitzvah, but that doesn’t give him license to keep on delaying. He still must pay when his worker asks for his wages and if he fails to do so, the employer just digs himself in deeper and deeper.
The basis of this mitzvah is that people work hard for their pay and they look forward to it. If they don’t get it on time, it’s very disheartening. It really takes the wind out of one’s sails. The discussion of this mitzvah in Deuteronomy 24:15 says this outright: “because he set his heart on it.” The Talmud in Baba Metzia (112b) interprets it more physically than emotionally: the worker sticks his neck out for the employer, so he deserves to be paid on time.
This mitzvah applies to both men and women in all times and places. It is discussed in the Talmud in tractate Baba Metzia, starting on page 110b. It is codified in the Shulchan Aruch in Choshen Mishpat 89. This prohibition is #238 of the 365 negative mitzvos in the Rambam’s Sefer HaMitzvos and #38 of the 194 negative mitzvos that can be fulfilled today as listed in the Sefer HaMitzvos HaKatzar of the Chofetz Chaim.