Governor John Carney recently signed the Healthy Delaware Families Act (the “Act”), which establishes the Delaware Family and Medical Leave Insurance Program (the “Program”) and makes Delaware the 11th state to provide paid family and medical leave for private-sector employees.
The Act provides up to 12 weeks of paid family and medical leave benefits, depending on the type of leave, and will be funded through a combination of payroll deductions and employer contributions. Although payroll deductions will start on January 1, 2025, employees will not begin to receive benefits and be able to take job-protected leave until January 1, 2026. The Program largely tracks the federal Family and Medical Leave Act (“FMLA”), except it applies to smaller employers at varying levels.
Although the Act directs the Delaware Department of Labor (the “Department”) to adopt regulations to further define the Program, the following outlines the Act’s current scope and requirements.
Reasons for and Amount of Leave
The Program provides paid leave to covered individuals for the following reasons:
- “Parental Leave”: for the birth, adoption, or placement through foster care of a child, and to care for such a child
- “Family Caregiving Leave”: (a) to care for a family member (i.e., a parent, child, or spouse) with a serious health condition, or (b) for a qualifying military exigency, as defined by FMLA regulations
- “Medical Leave”: for the employee’s own serious health condition that makes them unable to perform the functions of their position
An employee is entitled to up to 12 weeks of paid benefits for Parental Leave in a 12-month period and up to six weeks, in the aggregate, for Medical Leave and Family Caregiving Leave in a 24-month period. However, this does not mean that an employee can combine the three types of leave and take 18 weeks of paid leave within a year. Rather, an employee can receive a maximum total of 12 weeks of benefits for all types of leave within a 12-month period.
Leave may be taken intermittently or on a reduced leave schedule that reduces an employee’s usual number of working hours per workweek or per workday. However, Program benefits for intermittent and reduced leave schedules must be prorated. Paid leave benefits are not payable for leave of less than one workday in a workweek, but the Act does not specify whether subsequent leave can be used in increments of less than one day. Any paid leave used will count against the employee’s entitlement to any job protection under applicable policy or law.
Covered Employers & Individuals
The Program applies to all employers with 10 or more employees who primarily report to work at a Delaware worksite. Employers with 10 to 24 employees who report to work at a Delaware worksite only need to provide the Parental Leave benefit. However, employers with 25 or more employees who report to work at a Delaware worksite must participate in the full Program and provide all the benefits described. Individuals reporting to a worksite outside Delaware are not considered employees under the Program unless the employer “elects to classify them as such.” It is unclear how the classification process works based on the Program. Businesses with fewer than 10 employees (“small businesses”) have no obligation under the Act but may opt in to provide any or all of these paid leave benefits.
An employee is a “covered individual” under the Program if they have worked for the same employer for at least 12 months and worked at least 1,250 hours in the prior 12 months, as under the federal FMLA. Covered individuals must submit an application for benefits to the employer and comply with the Act’s administrative requirements.
Requesting and Documenting Leave
Employers may require employees to provide at least 30 days’ advance notice of the intent to take a leave under the Act when such leave is foreseeable, or as soon as practicable if the leave is unforeseeable. Employers or an approved private plan must collect and retain information verifying a qualifying exigency, parental leave status, or a serious health condition. Leave based on a serious health condition must be supported by certification from a health care provider that includes when the condition started, its estimated duration, appropriate medical facts pertaining to the condition, and a statement, as appropriate, such as when the employee needs to care for a family member with the serious health condition or if the leave is to be taken intermittently or on a reduced leave schedule.
At its expense, an employer may obtain a second and third opinion if it doubts the validity of the initial certification; however, the third opinion is final and binding on the employer. This mirrors the federal FMLA.
The Act requires employers to approve or deny the claim within five business days after receiving a completed application for benefits. If the claim is denied, an employer must provide a reason to the covered individual. If the claim is approved, the employer must notify the Department within three business days of the initial approval. The employer must make the first payment of benefits to the employee within 30 days after notifying the Department of the approved claim.
The employer or private plan may require recertification of the need for leave on a reasonable basis, though generally not more than once during a 30-day period. The employer is responsible for costs of recertification that are not covered by the individual’s health insurance.
Pay During Leave
The weekly paid leave benefit will be 80 percent of the covered individual’s average weekly wages rounded up to the nearest even $1.00 increment during the 12 months preceding submission of the application. The minimum weekly benefit may not be less than $100 a week, except that if the covered individual’s average weekly wage is less than $100 a week, the weekly benefit must be the covered individual’s full wage. The maximum weekly benefit is $900 for the years 2026 and 2027. The Department will establish the maximum weekly benefit for subsequent years based on increases in the Consumer Price Index for All Urban Consumers, rounded to the nearest even $5.00.
Funding for Paid Leave Benefits
The Program is funded through a combination of payroll deductions and employer contributions. Contributions will begin on January 1, 2025. For 2025 and 2026, contributions will equal the following percentage of an employee’s wages:
- 4 percent for Medical Leave
- 08 percent for Family Caregiving Leave
- 32 percent for Parental Leave
For 2027 and each year thereafter, the Department will set the contribution rate for Medical Leave, Family Caregiving Leave, and Parental Leave benefits “based on sound actuarial principles.”
An employer cannot deduct greater than 50 percent of the contribution required for the employee. If an employer does not deduct the employee’s portion of the contribution when wages are paid, the employer is liable for the full amount of the contribution. Employers and employees may file a waiver to opt out of these contributions if the employee’s work schedule or length of employment is not expected to meet the eligibility requirements for benefits.
Employers must provide all employees with written notice of their rights and duties and the procedures for requesting leave under the Act. Employers must provide the notice upon hire and whenever an employee requests covered leave or if the employer acquires knowledge of an employee’s qualifying leave. The Department will also issue a poster that employers will need to display in English, Spanish, and any other language that is the first language spoken by at least 5 percent of the employer’s workforce (if the Department has published the poster in that language).
Interaction with Other Leave Laws
All leave that qualifies under the Program will run concurrently with eligible leave under an employer’s policy and the FMLA (where applicable) and may not be taken in addition to leave under the FMLA. Employers may also require that employees exhaust paid time off, vacation, or sick leave during such a leave.
Collective Bargaining Agreements
An employee’s right to covered leave under the Program may not be diminished by a collective bargaining agreement. The Act does not affect any collective bargaining agreements entered into or renewed after the Act’s effective date.
Leave under the Program is job-protected, and an employee who received paid leave benefits under the Program or takes leave for which benefits may be paid under the Program must be reinstated to an equivalent position or the original position held by the employee when the leave started. During covered leave, employers must maintain any health care benefits the covered individual had before taking the leave for the duration of the absence.
Employers may satisfy the requirements of the Act through their private plan so long as the private plan meets or exceeds certain conditions, including providing the maximum amount of Family Caregiving Leave, Medical Leave, and/or Parental Leave benefits. An employer may provide a private plan that covers some Family Caregiving Leave, Medical Leave, and/or Parental Leave benefits and use the Program for the remaining coverage. If an employer self-insures its private plan, the employer must furnish a surety bond covering the state of Delaware with a surety company authorized to transact business in Delaware. This surety requirement does not apply to public employers. Employers must file any such private plan with the Department and must notify the Department of their intent to qualify as a private plan before January 1, 2024. Employers and employees covered under a private plan are not required to make the contributions detailed above.
Employers that are not obligated by the Act to provide benefits may choose to do so by opting in to the Program. The Act permits employers to opt in to each facet of the Program separately so that they may choose to provide benefits for (i) Parental Leave, and/or (ii) Medical Leave, and/or (iii) Family Caregiving Leave to eligible employees. Small businesses that wish to opt in to any (or all) facets of the Program may do so by providing notice to the Department but must commit to remaining in the Program for at least three years and may not opt out without giving at least 12 months’ notice to the Department and employees.
Retaliation and Prohibitions
The Act makes it unlawful to discharge, demote, discriminate, or take adverse action against an employee because the employee has (i) requested, filed for, applied for, or used benefits or leave under the Program; (ii) communicated an intent to file a claim, complaint, or appeal under the Act; or (iii) testified or planned to testify or otherwise assist in an investigation or other proceeding under the Act. Furthermore, an employer’s attendance or absence policy may not count Parental Leave, Family Caregiving Leave, or Medical Leave under the Act as an absence that could lead to or result in discipline or any other adverse action.
Penalties and Enforcement
Although the Act creates no direct private cause of action, it expressly provides that nothing “prevents a person from pursuing an action at law or in equity against an employer under other applicable law.” In addition, employees may file a complaint with the Department if they believe their employer has violated the Act. An employer that fails to comply with the Act or discharges or discriminates against an employee in violation of the Act is subject to a civil penalty of $1,000 – $5,000 for each violation.
If the Department determines that the employer violated the Act, the Department will notify the employer of both the initial determination and any amounts owed. Employers may appeal the determination to the Family and Medical Leave Insurance Appeal Board (“Board”) within 15 days. Any appeal of the Board’s decision must be filed with the Superior Court within 30 days.
What Delaware Employers Should Do Now
- Review family and medical leave policies and modify them as needed to incorporate the new paid leave provisions.
- Ensure that your human resources personnel and payroll personnel or payroll service provider take the appropriate actions to prepare to administer paid leave benefits, including implementing the employee payroll deductions once the amount of the contributions is determined.
- If you have 10 or more employees, ensure that appropriate action is taken to implement the employer payroll deductions, once the amount of the contributions is determined, by January 1, 2025; alternatively, apply for a private plan by January 1, 2024.
- Monitor for the release of regulations, procedures, forms, and guidance from the Department in connection with the implementation of the Program.