Ethical Teachings of the Torah

THE CHALLENGE OF MONEY: WAGES AND LABOR; EMPLOYER AND EMPLOYEE [part 2]

In addition to money, there have always been other forms of remuneration of wages. Not only are they as much part of the wages as money but they often become more important to the employee. Stock options, bonuses, holiday and sick leaves, tenure, job security, and perks such as travel expenses, vacations, and entertainment are only some of the modern forms of such non-monetary remuneration; there seems to be no limit to the forms of non-monetary remuneration except the imagination of employees or their representatives. In halakhic terms, these are not something special to labor relations but rather they flow from the decisive role guaranteed by contracts, communal legislation and, even beyond them, by custom. “In those places where it is customary for the workers to eat [at the employer’s expense and time] he must provide for them. [Where it is customary to provide desserts,] he provides dessert….One cannot compel his employees to come earlier or later than is customary in that place” (Bava Metzia 7:1).

Monetary wages have a moral dimension in that what is being paid for is clearly stated, easily measurable and requires no disclosure on the part of the recipient. Benefits on the other hand, are none of these; furthermore, they vary according to the status of the employee and sometimes even between individuals in the same group. In socialist and planned economies, the very nature of non-monetary wages encouraged evasion of the publicly proclaimed egalitarian wage structure that was contrary to economics, while at the same time encouraged accept- able falsehoods both of the employees and their superiors. Making benefits liable to income tax and the change over to freer economies have perhaps removed the necessity of these falsehoods; unfortunately their effects are still evident in all the former socialist and planned economies.

However, the free market provides immoral aspects of its own to non- monetary wage benefits that like wages reduce the return on investor’s and employer’s capital; perhaps two examples will suffice:
Empirical research shows that distribution of profits through dividends are always linked to corporate profit- ability, while executive compensation [stock options, prestigious corporate headquarters, bonuses, expense account living, travel and leisure] that also are a distribution of profits, are seldom so related. Where they are not related, it is a fraud committed against the shareholders.
In non-listed or family owned businesses it is common practice not to declare dividends but to withdraw profits in the form of managerial salaries and expenses. These are tax- deductible for the firm but difficult to collect from the recipient since it is difficult to separate legitimate expenses from what are in effect dividends. To some extent, these are forms of tax evasion and always defraud the non-active owners who do not benefit from non-dividend forms of profit distribution.

While the individual was powerless to remain moral and yet survive in the socialist and planned economies, “you shall fear your G-d” would seem to be the ultimate protection against the unethical elements in non-monetary remuneration under free markets.
“When you come into your fellow’s vineyard you may eat grapes as you desire, but you may not put anything in your vessel” (D’varim 23:24). This verse and the following one giving a worker the right to eat of the produce are forms of employee benefit in the Torah that are beyond contracts or custom. In today’s nonagricultural society this right would seem to be of limited importance, however, further examination yields very important principles for labor relations.
Throughout the halakhic discussions, the rights of the employer and hence the obligations of the employee are carefully enunciated. “He may only eat the raw fruit but not press it for juice and throw away the rest; may only eat that which he picks himself” (Bava Metzi’a 87a). “One who idles in eating [beyond the time allotted] or eats like a glutton, while the Torah only allowed him to eat his fill or gives it to others [who are not entitled to it] transgress a negative mitzva” (Hilkhot S’khirut 12:3). Similarly, Rambam writes that a shortened form of Birkat HaMazon was instituted so that workers should not detract from the work of their employer” (Hilkhot B’rachot 2:2).

In our day of corporate perks, frequent flyer accounts and fringe benefits, it is necessary to re-emphasize the relevant halakhot of using non-monetary benefits according to the pertinent conditions. There is no grey area between right and wrong - even in employee benefits.

• Other Ethical Teachings of the Torah
• Today is the Birthday of the World, whether as Children or as Servants [2] by Dr. Meir Tamari
• Funding Social Costs - Taxation [2]
• THE CHALLENGE OF MONEY - Funding Social Costs - Taxation [1]