Compliance FYI: Delaware Paid Family and Medical Leave
In May 2022, Delaware enacted the Healthy Delaware Families Act that creates the Delaware Paid Leave program. This program provides paid medical, parental, and family caregiving/military exigency leave. Employers will have withholding obligations starting January 1, 2025. Benefits paid under the program will not start until January 1, 2026. Employers seeking to provide the required benefits through a private insurance plan, or a self-insured basis will need to act in the fall of 2024.
Covered Employers and Employees
The number of employees whose primary worksite is in Delaware determines the extent to which an employer needs to comply with the requirements of Delaware Paid Leave. An employer with 25 or more employees in Delaware in the past 12 months is subject to the medical, parental, and family caregiving/military exigency leave requirements of Delaware Paid Leave. An employer with between 10 to 24 employees in Delaware in the past 12 months must comply with only the parental leave requirements. Employers with 9 or fewer employees in Delaware in the past 12 months are not subject to the law.
Employees of covered employers can take leave under the law if they have been employed by the employer for at least 12 months, have worked at least 1,250 hours in the previous 12-month period, and have worked at least 60% of those hours in Delaware.
Length and Reasons for Leave
Delaware Paid Leave is broken into three types of leaves—medical leave, parental leave, and family caregiving/military exigency leave.
Medical leave is taken for a covered employee’s own serious health condition that makes them unable to perform the functions of their position.
Parental leave is taken due to birth, adoption, or placement through foster care of a child during the first year after the birth, adoption, or placement of the child.
Family caregiving/military exigency leave is taken to care for a family member with a serious health condition or when a family member has qualifying military exigency under the Federal Family and Medical Leave Act.
Up to 12 weeks of parental leave is available in a 12-month period and up to 6 weeks of other forms leave is available in a 24-month period.
Contributions
The Delaware Paid Leave program will be funded with payroll contributions. For 2025 and 2026, the overall contribution rate for all forms of leave is 0.8% of an employee’s earnings in Delaware up to the Social Security contribution limit. Up to 50% of that amount can be paid by the employee; the employer must make the remaining contributions.
The contribution rate is further broken down into 0.4% for medical leave, 0.08% for family caregiving/military exigency leave, and 0.32% for parental leave. Employers who only need to comply with the parental leave requirements only need to collect and transmit the contribution for parental leave.
Employer Responsibilities
Set up Delaware LaborFirst Account
Delaware Paid Leave will be managed using the Delaware LaborFirst system. Employers must register for an account on Delaware LaborFirst between September 1, 2024, and December 1, 2024.
Assess Whether or Not to Leverage a Private Plan
Employers are free to participate in the state plan to provide benefits to their employees, however they can also provide the same benefits through an approved private insurance plan. Use of a private plan must be approved through the LaborFirst system between September 1, 2024, and December 1, 2024. Re-approval of the private plan is required annually. Employers with 100 or more covered employees may be able to self-insure the required benefits, subject to state approval.
Prepare to Distribute Required Notice
Employers should prepare to distribute the required notice prior to January 1, 2025. The notice must then be provided to new hires, upon employee request, and when the employer acquires knowledge that an employee may need leave for a reason listed above. The model Notice of Employee Rights is available for download here.
Prepare to Withhold and Transmit Required Contributions
Employers participating in the state plan should prepare to begin payroll deductions starting on January 1, 2025. The first contribution payment is due by April 30, 2025.
Key Takeaways:
Employers with employees in Delaware should carefully review the requirements of Delaware Paid Leave to determine if they need to take any action to be compliant with the law.
The information provided is a summary of laws and regulations relating to employee benefit plan compliance. This information should not be construed as legal advice. In all cases, employers should consult with their own legal counsel.
