The Talmud (Berakhot 54a) relates that it was decreed that greetings should be made using the name of God and that the Heavenly court agreed to this (Makkot 23b). Whether this took place at the time of Boaz (As is the clear impression in Midrash Rut Rabbah 4:5.), whom the Talmud identifies with this practice (As per Megilat Rut 2:4. See, in the journal VaY’lakket Yosef¸vol 13: #s 76, 97, 103, 115, and 129), or was later enacted by the Hasmoneans, is a matter of some analysis (See Sefer HaMikhtam to Berakhot). R. Yehudah Assad (Responsa Yehudah Ya’aleh 9) assumes this to have been instituted by Ezra (See alsoRashash, Bava Kama 82a). The Meiri (Berakhot 63a) explains that the reasoning behind this innovation was to make clear from whence all peace comes. This was especially necessary in light of the erosion of faith caused by the activities of the Sadducees, apparently the motivation for the enactment. This preceded considerations of the inappropriate use of God’s name; as the Mishnah cites, “It is a time to do for God, they have nullified your Torah.” (Tehillim 119:126). Rashi, (Berakhot 54a, s.v. V’Omer) however, implies that the fundamental concern was the spreading of peace in this era, a goal apparently encouraged by the emphasis provided by the use of God’s name.
The scope of the enactment is not immediately clear. Rashi (Makkot 23b, s.v. vish’elat shalom bishaim. [This commentary is actually not written by Rashi, but by his student R. Yehudah b. Natan]) presents two possibilities as to whether it became obligatory to use the Divine Name in salutations, or just that one who does so need not fear that he is taking God’s Name in vain. In either case, empirical evidence will immediately indicate that modern practice does not usually involve pronouncing God’s Name in the normal mode of greeting. This discrepancy between talmudic law and modern custom is explained by the authorities in one of two ways. The first is that the enactment was temporary and is no longer in effect; in fact, the lack of reference to this notion in the Rambam’s Mishneh Torah is accordingly noted. This is the position of R. Chaim Yosef David Azulai (Petach Einayim, Yoma 39a) and others (see R. Yitzchak Weiss, Responsa Siach Yitzchak 39, and R. Joseph B. Soloveitchik, cited in the journal Mesorah 6:33). The second approach is that the essence of the enactment is fulfilled when care is taken to use the word shalom, which itself has Divine connotations (Shabbat 10a). Additionally, R. Yechiel Moshe Epstein (Be’er Moshe, Shoftim 6:12, p. 188) offers a more homiletically oriented take on the entire concept: the enactment was not primarily that greetings should be offered with the Name of God, but for the sake of the Name of God. That is to say, it must be realized that greeting others is not a mere social ritual but a profound religious act.
By such process the greeting of others became akin to pronouncing the Holy Name, in particular when the word shalom is used. This affects the treatment of greetings in halakhah in a number of ways. For one, it is forbidden to pronounce shalom in any place deemed inappropriate to say God’s Name (Shabbat 10a and Tosefta, Berakhot, ch. 3, per Shoftim 6:24; see Kessef Mishneh, Hilkhot Kriat Shema 3:5; R. Yissakhar Shlomo Teichtal, Responsa Mishneh Sakhir, vol. 2, Orach Chaim 15; R. Eliezer Cohen, Siach Kohen 9; and Responsa Sha’arei Kodesh 2:79). R. Yosef Engel (Gilyonei HaShas to Shabbat, based on Responsa HaRadbaz 1:220. See also Ta’amei HaMinhagim, p. 302) raises the question of whether this is because the act of offering greetings is now a sanctified act or because the very word shalom itself is considered holy. Relevant to that latter possibility, the Tosafot (Sotah 10a) consider the word to possess the status of a name that may not be erased, although Rabbeinu Asher (Responsa HaRosh 3:15) apparently disagrees. R. Assad notes that the latter position is also that of the Rambam. The Rama (Yoreh Deah, 276:13) recommends that an incomplete spelling be used when writing letters, to avoid problems of disrespectful treatment. The Shach (Yoreh Deah 276:16) records that most are not of the custom to be careful for this stringency. Some authorities were hesitant to allow using shalom to greet a bareheaded man, as he will then respond despite his lack of the necessary attire to do so (See R. Chaim Chizkiyahu Medini, Sdei Chemed, Kuntres HaKlallim, Ma’arekhet Ha-alef, Ot 313, citing the Sefer Mor V’Oholot, p. 5. R. Medini also discusses these topics in Ma’arekhet Aleph 113, Pe’at HaSadeh 110, and Mikhtav L’Chizkiyahu); nonetheless, R. Ovadiah Yosef (Yalkut Yosef) and R. Aharon Rosenfeld (Responsa Minchat Aharon 2:199) are lenient, fearing such reluctance will be misinterpreted as unfriendliness. So, too, R. Moshe Shternbuch (Responsa Teshuvot V’Hanhagot 1:12) feels that strictly speaking, there is no reason for concern. The Talmud Yerushalmi (Gittin 5:5) recommends distinguishing between greetings to Jews and to non-Jews in usage of the word shalom, and idea apparently rejected by the Talmud Bavli (see Gittin 62a and Tosafot, s.v. Atrata; see also Responsa Yehudah Ya’aleh 9.).