On January 1, 2025, qualifying Delaware employers will begin making payroll-linked contributions to a State-run leave-benefits Fund; beginning January 1, 2026, that Fund will pay for up to twelve weeks of family or medical leave for qualifying Delaware employees. Certain employers with approved private plans will be allowed to keep their plans and will be exempt from contribution.
On May 11, 2022, Governor John Carney of Delaware signed into law the Healthy Delaware Families Act (the Act). The Act creates Title 19, Chapter 37 of the Delaware Code, entitled the “Family and Medical Leave Insurance Program.” Also known as “Senate Substitute 2 for Senate Bill 1,” the Act creates for “covered” Delaware employees – including many in the private sector – up to twelve weeks of paid family and medical leave for qualified events through a new paid leave trust fund administered by the State and contributed to by employers. The Act will make available paid parental leave, medical leave, and family caregiving leave (which includes both caring for a severely ill family member and addressing “the impact of a family member’s military deployment”).
The Act defines an “employer” as anyone with more than ten “covered” employees within the past twelve months. Employers are grouped into categories, each with separate responsibilities under the Act. Notably, any business with less than ten employees within the State during the previous twelve-month period does not qualify as an “employer” and is exempt from the Act, as are the federal government and any business that is closed in its entirety for at least thirty consecutive days per year.
“Covered” employees are defined as those who have been employed with their current employer for at least twelve months and have worked at least 1250 hours in the preceding twelve-month period.
Employers with twenty-five or more covered employees will be subject to all of the Act’s provisions, whereas Employers with ten-to-twenty-four covered employees during the preceding twelve-month period will only be subject to the parental leave provisions.
While the statute itself has an effective date of July 1, 2022, the actual family and medical leave program is not due to begin operating until January 1, 2025. The Department of Labor will establish a family and medical leave insurance program by January 1, 2025, including creation of the Family and Medical Leave Insurance Account Fund (the Fund). Qualifying employers will begin making contributions to the Fund on January 1, 2025. Benefits under the Act are to be available no later than January 1, 2026.
Employer contributions to the Fund will be made quarterly and will be payroll-linked for 2025 and 2026. Separate contributions will be made for each benefit. Employers will contribute 0.4% of wages for medical leave benefits, 0.08% of wages for family caregiving benefits, and 0.32% of wages for parental leave benefits.
Employers who have an approved private plan for a similar plan benefit can opt to keep their plan and will not be required to contribute to the fund. Small businesses who do not qualify as “employers” under the Act or have less than twenty-five covered employees will be able to opt into the plan on a benefit-by-benefit basis but must do so for a period of at least three years.
The Act includes anti-retaliation provisions aimed at preventing any adverse employment action against individuals who request leave under the Act. Employees who exercise their right to take covered leave are entitled to restoration of their previous position or one of equivalent seniority, status, pay, and benefits upon their return; employers who violate this obligation will be liable to the employee for twice the sum of any damages suffered by the employee plus interest.
Employers who do not comply with the Act will be subject to fines.
We anticipate this new law may raise many questions and welcome you to reach out to our employment law group for guidance.