Navigating Delaware’s Paid Family and Medical Leave: Key facts for employers
There are more than a dozen existing Paid Family and Medical Leave (PFML) laws, and another four are going live in the next couple of years. These laws are all broadly similar, but each has some variation that distinguishes it from the rest. Delaware Paid Leave (DE PL) seems to take that one step further, adding some interesting nuance employers need to track. In this blog, we will review some core elements of the program along with some unique aspects.
As a reminder, DE PL will go live on January 1, 2026, and the latest set of proposed regulations was published in early October.
Covered Employers
Requirements: An employer is required to participate in DE PL based on the number of employees primarily working in Delaware.
- Employers with fewer than 10 employees are exempt, along with federal government employees and any business that is entirely closed for 30 consecutive days or more per year.
- Employers with 10 to 24 employees working primarily in Delaware must provide Parental Leave only.
- Employers with 25 or more employees must provide full coverage, which includes Parental Leave, Medical Leave, Family Caregiver Leave, and Military Qualifying Exigency Leave.
Determining number of employees: To determine the number of employees, employers must count the number of employees who primarily work in Delaware and are expected to meet the “covered individual” definition defined in the Family and Medical Leave Act (FMLA). Certain employees working in Delaware may be able to opt-out if they are not expected to meet the eligibility criteria. They can do this via a defined Waiver process, which requires the signature of both employer and employee if both parties pay contributions.
DE PL Unique Aspect: Employers should also note that employees are counted per company based on each FEIN, not the total number of employees if an employer has multiple separate entities in Delaware. However, the Delaware DOL will utilize the FMLA’s definition of “integrated employer.” This means that multiple, separate FEINs may be treated as a single entity and thus count all employees together based on the following factors:
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- common management
- interrelation between operations
- centralized control of labor relations
- degree of common ownership or financial control
When the number of employees changes: When the number of employees meets a threshold for additional coverage, notice to employees is required. The required leave type must be provided within 30 days and maintained for 12 months. For example, once an employer goes from nine to 10 employees, they must provide parental leave. The employee count must fall below the threshold for 12 consecutive months to eliminate coverage, which requires 30-day advance notice to employees.
When it’s voluntary coverage: Finally, employers should note that they can voluntarily provide coverage for any leave type they are not required to provide based on employee counts.
Eligible Employees
An employee is any individual who primarily reports to work at a worksite in Delaware, defined as working at least 60% of their work hours physically in Delaware each calendar quarter. In addition, an employee must meet the following criteria at the time of the application for leave of absence, similar to the eligibility criteria for FMLA:
- the employee must have been employed for at least 12 months by the employer with respect to whom leave is requested
- have worked at least 1,250 service hours with the employer during the previous 12-month period.
Contributions
Employers and employees may share the contributions for DE PL, which begin on January 1, 2025, one year ahead of the go-live date for benefits. The contribution rate for 2025 and 2026 will be 0.8% of employee wages, split as follows:
- Parental Leave: 0.32% of wages
- Medical Leave: 0.4% of wages
- Family Caregiving Leave + Military Qualifying Exigency: 0.08% of wages
Employers may utilize payroll deductions from covered employees to share up to 50% of the costs with employees, or an employer can opt to pay a higher percentage of the contributions. These contributions are capped at the Social Security taxable limit, set at $176,100 for 2025, as covered in the October 2024 Statutory Update. Employers are only required to pay their share of contributions for the leave types they are required to provide based on the number of Delaware employees. Employers are prohibited from deducting more than 50% of employees’ wages, equal to 0.4% of the total 0.8% rate.
DE PL Unique Aspect: The 0.8% contribution rate applies only to wages earned while working in Delaware.
If any employer provides more than 50% of contributions or otherwise changes the contribution split in the future, notice of the change must be given by December 1 for an effective date of January 1 of the following year.
Benefit Amount
Benefits are calculated based on the employee’s wages 12 months before the application for leave of absence. Benefits are up to 80% of the employee’s average weekly wages, up to the maximum weekly benefit of $900, which is in effect for 2026 and 2027 and then subject to change annually.
DE PL Unique Aspect: benefit amounts are based on wages earned while working in Delaware.
Leave Entitlement
The maximum leave entitlement provided under DE PL is 12 weeks in a 12-month period, using any of the four leave year methods allowed for FMLA: calendar year, fixed year, forward-looking, or rolling backward.
The amount of leave available for each leave reason varies as follows:
- Parental Leave: 12 weeks per 12-month period and must be taken within one year of a child’s birth, adoption, or placement.
- Medical Leave, Family Caregiver Leave, or Military Qualifying Exigency Leave: 6 combined weeks per 24-month period.
Any combination of the above can be used, but an employee may not exceed 12 weeks in a 12-month period. Leave can be taken intermittently, with a minimum of one full workday increment.
Coordination of Benefits
Coordination with other programs: DE PL runs concurrently with FMLA and may run concurrently with any employer-provided leave of absence, disability benefit program (e.g., Short-Term Disability), and paid leave program.
Use of PTO: Any employer may require an employee to use up to 75% of their accrued but unused PTO before utilizing DE PL, and that required PTO will be counted toward the length of the DE PL leave. An employer and employee may agree to use PTO during DE PL as a top-up to the DE PL benefits, up to 100% of the employee’s average weekly wage.
DE PL Unique Aspect: an employer must have a written policy that outlines the coordination of DE PL and any employer-provided leave of absence, disability benefit program, and paid leave program. The employer must provide written notice to employees that STD, long-term disability (LTD), or any other paid leave program is secondary to PFML. This means the STD, LTD or paid benefit will be reduced or offset. Otherwise, it will be assumed primary (meaning PFML would be reduced/offset).
State Plan Claims Administration
There is a single option to file a claim for DE PL, the Delaware LaborFirst Portal. When an employee submits a claim via the portal, both the employee and employer will receive an automated notification.
DE PL Unique Aspect: After the required materials have been submitted through the portal, the employer will receive a notice about whether the leave is qualified and substantiated. That same notice will advise whether the claim should be approved, the amount of the weekly benefit, and the length of the leave.
The employer must then determine whether to approve or deny the DE PL request, the amount of compensation the employee will receive, and the approved duration of the DE PL leave. If approved by the employer, benefit payments will come from DE PL within 30 days and every two weeks until the end of the approved leave.
Private Plan Options
Like most other PFML programs, employers may opt out of the state plan and comply with the DE PL requirements via a private plan. A private plan can be utilized for all required leave types or separately for one or more required leave types: Parental, Medical, Family Caregiver, and Military Qualifying Exigency. In contrast, any remaining leave types not covered by a private plan would be covered under the state plan.
Self or fully-insured private plans: The employer can self-funded private plans or be insured through an approved carrier. In either case, the cost to employees must not exceed the cost an employee would be charged under the state plan.
DE PL Unique Aspect: If the cost of an insured private plan is less than the state plan, the employee is only responsible for 50% of the lower cost rather than still being responsible for the higher contribution that would be charged under the state plan.
Employers may not deduct the costs of a private plan, either insured or self-funded, until the start date for PFML claims.
For self-funded private plans, an employer must have a minimum of 100 covered individuals unless the employer can demonstrate the administrative capacity to manage a self-funded plan adequately. This type of plan must be accompanied by a surety bond equal to one year of state program contributions.
Private plan deadlines: The window to apply for a private plan when benefits begin on January 1, 2026, ends soon. Applications must be completed on the Delaware LaborFirst Portal by December 1, 2024.
Also note that some employers may have applied for their existing plans to be grandfathered in to comply with requirements, which remains in effect until December 31, 2029. Employers with grandfathered plans for all required types of leave are not required to register or report hours and wages until 2030 but may be required to take action for any required types of leave that are not grandfathered.
Key Dates
December 2, 2024: Employers must notify employees of upcoming payroll contributions.
December 15, 2024: The deadline to apply for a Private Plan when benefits begin is January 1, 2026.
January 1, 2025: DE PL contributions begin.
April 1, 2025: First quarterly reporting and contributions due.
October 1 – December 1, 2025: Annual renewal period to apply for a private plan.
January 1, 2026: DE PL benefits begin.
December 31, 2029: Expiration of grandfathered private plans.
How can Marsh McLennan Agency’s Absence, Disability, & Life Practice help?
Please contact us for additional information on the upcoming paid family and medical leave programs or to learn more about how MMA ADL can help you understand these programs.
Marsh McLennan Agency’s Absence, Disability, & Life Specialty Practice helps clients understand, integrate, measure, and manage leaves of absence, time away from work, disability, and life insurance programs. Specializing in absence for over 20 years allows us to help employers meet employee expectations, reduce compliance risk, and manage costs. We are here to be your trusted partner, allowing you to prioritize what truly matters – your people.
