© 2022 American Payroll Institute, Inc. Delaware Establishes Paid Family Leave Insurance Program Beginning January 1, 2025, applicable employers will be required to begin withholding and remitting employee contributions and paying employer contributions for a new paid family and medical leave (PFML) insurance program in Delaware [S.B. 1, L. 2022]. Delaware is the eleventh state (plus the District of Columbia) to establish a PFML program (see PAYSTATE UPDATE, Issue 8, Vol. 24). See APA’s Guide to State Payroll Laws, §9.1 State Disability Insurance, Paid Family Leave, and Long-Term Care Insurance Programs for additional information on state PFML laws. Coverage Covered employees. The term employee means an individual primarily reporting for work at a worksite in Delaware unless otherwise excluded or exempt. To qualify for coverage, an employee must be: (1) employed for at least 12 months by the employer from which leave is requested and (2) employed for at least 1,250 hours of service with the employer during the previous 12-month period. Exemptions, exclusions. The PFML program excludes certain state government and state Department of Education casual, seasonal employees who are employed on a temporary basis. Additionally, employers that have employed fewer than 10 employees in the state during the previous 12 months, the federal government, and any business that is closed in its entirety for 30 consecutive days or more per year are exempt from the program. Covered employers. Employers with employees working anywhere in Delaware that have employed 25 or more covered employees during the previous 12 months will be subject to all parental, family caregiving, and medical leave benefit requirements. Employers with 10 to 24 covered employees during the previous 12 months will only be subject to the parental leave requirements. Waivers, opt-ins Employer coverage waiver. An employer providing a private plan with comparable coverage will be able to apply for a waiver from the state program. A waiver for each type of benefit (i.e., parental, medical, or family caregiving leave) can be applied for separately. Small business opt-in. A small business will have the option to opt in separately for each type of benefit (i.e., parental leave, medical leave, or family caregiving leave) to provide a certain type of benefit to covered employees for a period of at least three years. A small business is defined as an employer with nine or fewer employees working anywhere in the state for purposes of parental leave or an employer with 24 or fewer employees working anywhere in the state for purposes of medical leave and family caregiving leave. Contributions Employer withholding, remittance required. PFML program benefits will be funded by payroll contributions. Remittance and reporting will be required quarterly unless the Department of Labor (DOL) requires a more frequent schedule. Taxable wages for PFML purposes will be the same as social security wages for federal purposes. Breakdown of contributions. Employers will withhold and remit employee contributions, which will equal 50% of total contributions for the covered employee. The employer will be responsible for the other 50%. For 2025 and 2026, a contribution rate of 0.8% of wages (0.4% for medical leave, 0.08% for family caregiving leave, and 0.32% for parental leave) will apply when the employer has 25 covered employees or more, with the covered employee and the covered employee each paying half (0.40%). The DOL will set future contribution rates of up to 1% of wages for 2027 and beyond. Benefits Beginning January 1, 2026 (one year after the start of contributions), eligible employees will be able to qualify for family and medical leave benefits: (1) to care for a child during the first year after the birth, adoption, or placement of a child (i.e., parental leave) (2) to care for a family member with a serious health condition (i.e., family caregiving leave) (3) for the employee’s own serious health condition that makes the employee unable to perform the functions of his or her position (i.e., medical leave) or (4) for a qualifying exigency. Duration. A covered individual will be eligible for a maximum of 12 weeks of PFML benefits in an application year. The maximum number of weeks during which benefits will be payable will be: (1) 12 weeks in an application year for parental leave benefits and (2) six weeks in any 24-month period for medical leave and family caregiving leave benefits. Coordination of benefits PFML that also qualifies as leave for federal Family and Medical Leave Act (FMLA) purposes will run concurrently with FMLA leave and may not be taken in addition to FMLA leave. An employer may require that PFML run concurrently or be otherwise coordinated with disability or family care leave provided under a collective bargaining agreement or employer policy. An employer may require the use of unused, accrued paid time off (PTO) including an employer’s provision of vacation and sick leave before the employee may access PFML benefits, and the use of accrued PTO may count toward the total length of PFML provided if May 30, 2022 Volume 24 Issue 11
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