Delaware Becomes Eleventh State to Enact Paid Family Leave Law

Seyfarth Synopsis: On May 10, 2022, Delaware Governor John Carney signed the Healthy Delaware Families Act (the “Act”) into law. Paid leave under the Act becomes available to eligible employees for family caregiving leave, medical leave, and parental leave reasons beginning on January 1, 2026. Delaware is the eleventh state to enact a mandatory paid family or paid family and medical leave program.[1]

Legislative Background

On April 14, 2022 the Delaware General Assembly voted on and approved the Healthy Delaware Families Act. The Act was approved by a 29 to 11 vote in the Delaware House of Representatives and a 14 to 7 vote in the Delaware Senate.  On May 10, Governor Carney signed the Act into law officially creating a new paid family and medical leave program in Delaware.

Key Dates

The Act establishes a Family and Medical Leave Insurance Fund (the “Fund”), and takes effect July 1, 2022. Beginning January 1, 2025 employees, employers, and self-employed individuals must begin contributing to the Fund. Covered workers can begin receiving paid family and medical leave benefits for covered absences on January 1, 2026.

The Act grants the Delaware Department of Labor (the “Department”) authority to adopt general paid family and medical leave regulations, and the Delaware Department of Insurance authority to adopt paid family and medical leave regulations with respect to private plans. The Act does not indicate any specific dates by when these regulations must be published.

Substantive Highlights

Eligibility. The Act defines “covered individual” to mean an individual who (1) submits an application for paid family and medical leave benefits, (2) meets certain administrative requirements under the Act, (3) has been employed with the employer for more than 12 months, and (4) has worked at least 1,250 hours of service with the employer during the previous 12 months.

Employer Coverage. “Employer” under the Act means all those who employ employees working anywhere in the State of Delaware. “Employer” does not include anyone who employs less than 10 employees in Delaware, a business that is closed in its entirety for 30 consecutive days or more per year, or the federal government.

Notably, employers with between 10 and 24 employees during the previous 12 months are subject only to the parental leave provisions of the Act (see below). Meanwhile, employers with 25 or more employees during the previous 12 months are subject to all parental, family caregiving and medical leave provisions of the Act (see below). When determining employee headcounts, the Act notes that “employees” include those who meet the requirements of a “covered individual” (see above) or who are reasonably expected to meet these requirements during the previous 12 months.

Covered Absences/Family Members. Delaware paid family and medical leave benefits will be available for the following covered reasons:

• Parental Leave: The covered individual is caring for a child during the first year after the birth, adoption, or placement of the child;
• Family Caregiving Leave: The covered individual (a) is caring for a family member with a serious health condition, or (b) has a qualifying exigency as defined under the federal FMLA;[2] and
• Medical Leave: The covered individual has a serious health condition that makes them unable to perform the functions of their position.

“Family Member” under the Act means (1) a parent, (2) a child, and (3) a spouse, as these terms are defined under the federal FMLA.

Amount of Leave. Employees are eligible for a maximum of 12 weeks of Delaware paid family and medical leave benefits in an application year.[3] This leave can consist solely of “parental leave,” “family caregiving leave,” or “medical leave” (see above), or some combination thereof. In particular, the Act states that parental leave benefits are payable for a maximum of 12 weeks in an application year. By comparison, the maximum aggregate number of weeks during which medical leave and family caregiving leave under the Act are payable in an application year is 6 weeks in any 24-month period.

Funding. Beginning on January 1, 2025, employers must begin contributing to the Fund, at least quarterly, in the form and manner determined by the Department.  While additional funding details are forthcoming, the Act does provide certain helpful information about how Delaware paid family and medical leave benefits will be funded.

• Parental Leave: The contribution rate as a percentage of wages is 0.32% for 2025 and 2026.
• Family Caregiving Leave: The contribution rate as a percentage of wages is 0.08% for 2025 and 2026.
• Medical Leave: The contribution rate as a percentage of wages is 0.4% for 2025 and 2026.

In each instance, an employer can deduct up to 50% of the contribution required for the employee, although the option exists for the employer to elect to pay all or any portion of the employee’s share of the contribution. The employer is liable for the contribution at the time wages are paid and must remit the total required contribution to the Fund. Notably, if the employer fails to deduct wages of an employee when the wages are paid, the employer remains liable for the full amount of the contribution, including that amount not deducted from an employee’s wages.

Amount of Wage Replacement. The weekly benefit for a Delaware paid family and medical leave absence must be 80% 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 per week, except that if the covered individual’s average weekly wage is less than $100 per week, the weekly benefit must be the covered individual’s full wage. The maximum weekly benefit in 2026 and 2027 must be $900, and will be revisited annually thereafter and adjusted by the state as appropriate. 

Job/Employment Protection.  A covered individual who receives Delaware paid family and medical leave is entitled to be restored by the employer to the position they held when the covered leave commenced, or to a position with equivalent seniority, status, employment benefits, pay, and other terms and conditions of employment, including fringe benefits and service credits.

During covered Delaware paid family and medical leave, employers must maintain any health care benefits that a covered individual had before taking the leave for the duration of the leave. Relatedly, the covered individual must continue to pay the their share of the cost of health care benefits as required before the commencement of the leave.

Private Plans. A covered employer may apply to the Department for approval to meet the employer’s obligations under the Act through a private plan. To be approved, a private plan must meet a number of substantive requirements, such as, but not limited to, providing the right amount leave, making the leave available for the right reasons, and providing the right amount of pay to employees on leave.

Employer Takeaways

With the paid leave landscape continuing to rapidly expand and grow in complexity, we encourage companies to reach out to their Seyfarth contact for solutions and recommendations for addressing compliance with paid leave requirements. Stay tuned for another Seyfarth alert in the coming days, with a more detailed analysis of the Healthy Delaware Families Act that will focus on other topics, such as required employee notice, documentation, intermittent leave, waiting periods, coordination of benefits, employer notice and posting requirements, recordkeeping, and enforcement mechanisms and remedies.

To stay up-to-date on paid leave developments, click here to sign up for Seyfarth’s Paid Leave mailing list. Companies interested in Seyfarth’s paid family leave laws survey should reach out to paidleave@seyfarth.com.

 

[1] California, Colorado, Connecticut, Maryland, Massachusetts, New Jersey, New York, Oregon, Rhode Island, Washington, Washington, D.C., and San Francisco (CA)  have previously enacted mandatory paid family leave (“PFL”) laws. Certain PFL laws, like the new Maryland mandate that was enacted last month, are more appropriately called paid family and medical leave laws because they include benefits for absences related to an employee’s own medical condition, as well as “family” leave (e.g., bonding with a new child; care of a family member with a serious health condition; etc.). There are currently four PFL laws — California, New Jersey, New York and Rhode Island — that do not offer leave benefits for an employee’s own medical condition. However, each of these jurisdictions offers a separate state disability insurance benefit. San Francisco’s program is tied to the California state PFL program and is limited to paid parental leave.

[2] See 29 C.F.R. 825.126 for more information.

[3] “Application year” is defined as the 12-month period as set for under the federal FMLA.