Statutory Update: Delaware Enacts Paid Family and Medical Leave; WA PFML Rules; AL Adoption Leave

May 12, 2022

Non-COVID-19 Legislation

State and Local

Paid Family and Medical Leave Updates

Delaware Enacts Paid Family and Medical Leave

On May 10 the governor of Delaware signed the Healthy Delaware Families Act (SB1), establishing the “Delaware Family and Medical Leave Insurance Program” to provide job-protected paid leave to employees working in the state. Below is a summary of the law’s text.

Delaware Paid Family and Medical Leave (DE PFML)

Effective Date

• • Contributions: January 1, 2025
  • Benefits Entitlement: January 1, 2026

Subject Employers

• All Employers who employ 10 or more employees in the State of Delaware
  • Employers with 10 to 24 employees* in the state** during the previous 12 months are subject to only the parental leave requirements.
  • Employers with 25 or more employees* in the state** during the previous 12 months are subject to all parental leave, family caregiving leave, and medical leave requirements.
• Excludes the federal government and any business that is closed in its entirety for 30 consecutive days or more per year.
• Small businesses may opt in to the program.

“Small business” is defined as:

1. 1. For purposes of parental leave, all those that employ 9 or fewer employees working anywhere in the state.
   2. For purposes of family caregiving leave and medical leave, all those that employ 24 or fewer employees working anywhere in the state.

*  For this purpose “employees” includes those who meet requirements (a) and (b) under the definition of “Covered Individual” (see ‘Eligible Employees’ below) or are reasonably expected to meet those requirements during the previous 12 months.

** The law text does not specifically state whether these employee counts are based on an employer’s size nationwide or limited to within Delaware. However, since the exclusions from the definition of “employer” and the definition of “small business” both specifically indicate “in this state”, until regulations are released to clarify it is assumed that this distinction applies to these thresholds as well.

Eligible Employees

All Employees who primarily report to a worksite in Delaware

• • Excludes any individual covered under DE Code Title 29 §5903 (17)a (casual seasonal employees employed by the state), an individual employed by entities in DE Code Title 14 (public school system) in a position that would be covered under Title 29 §5903 (17)a, or an individual in an equivalent positionwith an entity covered by state employee benefits.

“Covered Individual” means an individual who meets all of the following:

1. 1. Has been employed for at least 12 months by the employer;
   2. Has been employed for at least 1,250 hours of service with the employer during the previous 12-month period. For purposes of determining whether an individual meets the service hours requirement, the legal standards established under FMLA apply.
   3. Meets the administrative requirements under the DE PFML law; and
   4. Has submitted an application for DE PFML benefits.

Types of Plans

• State Program
• Private Plan
  • A private plan must meet or exceed rights and requirements outlined for the state program.
  • An employer seeking to qualify benefits under a private plan must notify the DE DOL before January 1, 2024 (method TBD).
  • An employer may provide all family and medical leave coverage through an approved private plan or may provide one or more of medical leave coverage, family caregiving leave coverage, or parental leave coverage using an approved private plan and provide the remaining coverage using the state program.
  • If the private plan provides for insurance, the policy must be issued by an insurer authorized to engage in the business of insurance in the state.
  • If the private plan is in the form of self-insurance, the employer must furnish a bond running to the state, with a surety company authorized to transact business in the state as surety, in a form as may be approved by and in an amount as may be required by the DE DOL. This does not apply to public employers.
  • Private benefits in existence on the law’s enactment date (May 10, 2022) that the DE DOL deems to be comparable to the DE PFML program qualify as a private plan for a period of 5 years from the start of contribution payments if the DE DOL’s approval of private plans would not adversely impact the solvency of the Family and Medical Leave Insurance Fund. The DE DOL may determine comparable value through consideration of factors including wage replacement, length of leave, interrelated benefits, eligibility criteria, or frequency of allowed leave.

Contributions

• Employer- and Employee-Paid, beginning January 1, 2025
• For 2025 and 2026, the total contribution rate will be 0.80% of wages, allocated as follows:
  • • Medical leave: 0.40% of wages                                                                                                                                                                           
    • Family caregiving leave: 0.08% of wages                                                                                                      
    • Parental leave: 0.32% of wages.                                                                                                                                                                  

The contribution rates will be re-evaluated annually for future years.

“Wages” means remuneration for employment as determined for purposes of old-age, survivors, and disability insurance for employees and employers under the Federal Insurance Contribution Act, 26 U.S.C. Chapter 21.

Maximum contribution amount not stated; given the definition of wages, the maximum may be linked to the maximum wages subject to social security taxation ($147,000 in 2022).

• • An employer may deduct from employee wages no more than 50% of the contribution required for each leave type. An employer may elect to pay all or any portion of the employee’s share of the contribution for each leave type.
  • Private Plans:
    • Employees covered by a private plan may not be charged a higher rate than the state program rate.
    • An employer with an approved private plan will not be required to remit the contributions associated with the leave type(s) covered under the private plan.
  • An employee and employer may opt to file a waiver of the required payroll contributions when an employee’s work schedule or length of employment with the employer is not expected to meet the requirements for eligibility for DE PFML benefits.

Reasons for Leave

DE PFML benefits will payable to a Covered Individual for the following reasons:

• • Because of the birth, adoption, or placement through foster care of a child during the first year after the birth, adoption, or placement.
  • To care for a covered family member with a serious health condition (as defined under FMLA).
  • Due to the individual’s own serious health condition that makes them unable to perform the functions of their position.
  • Due to a qualifying exigency arising out of the foreign deployment of the employee’s spouse, child, or parent (qualifying exigency is as defined under FMLA).

Covered Family Members

The employee’s

• • Spouse
  • Child
  • Parent

All as defined under FMLA

Leave Entitlement

• • Parental leave: 12 weeks per Application Year*, to be taken within one year of the birth, adoption, or placement of a child.
  • Medical leave, family caregiving leave, qualifying exigency: 6 weeks combined in any 24-month period
  • Maximum: 12 weeks per Application Year*

* An “Application Year” is the 12-month period as defined under FMLA.

• • Except for parental leave, a Covered Individual is eligible for benefits not more than once in a 24-month period.
  • If two parents are entitled to parental leave, family caregiving leave or qualifying exigency leave and are employed by the same employer, the aggregate number of weeks of leave to which both may be entitled may be limited by the employer to 12 weeks during any 12-month period. The DE DOL may adopt regulations limiting aggregate family caregiving leave claimed by multiple family members for the same qualifying event.
  • Intermittent or reduced schedule leave may be taken only when medically necessary and supported by documentation. DE PFML benefits are not payable for less than one work day of covered leave taken in one work week.

Weekly Benefit Amount

• • 80% of the Covered Individual’s average weekly wages during the 12 months preceding submission of the application, rounded up to the nearest even $1.00

“Wages” means remuneration for employment as determined for purposes of old-age, survivors, and disability insurance for employees and employers under the Federal Insurance Contribution Act, 26 U.S.C. Chapter 21.

• • Minimum Weekly Benefit: $100; if the Covered Individual’s average weekly wage is less than $100 a week, the weekly benefit must be the full wage
  • Maximum Weekly Benefit: $900 in 2026 and 2027; to be re-evaluated annually after 2027
  • No unpaid elimination period is specified in the law.

Notice to Employer

• • An employee must provide their employer notice of the intention to take covered leave 30 days in advance, if known, or as soon as practicable.
  • For leave on an intermittent or reduced schedule basis, the employee must provide the employer with prior notice of the schedule on which leave will be taken, to the extent practicable.

Employment and Benefits Protection

• • Employees returning from DE PFML leave are entitled to be restored by the employer to the position held when 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, to which the employee had been entitled at the commencement of leave.
  • During DE PFML leave the employer is required to maintain any health care benefits the employee had before taking leave for the duration of the leave as if the employee had continued in employment continuously. The employee must continue to pay their share of the cost of health care benefits as required before the commencement of leave.

Coordination with Other Leaves

• • DE PFML leave that also qualifies as leave under FMLA runs concurrently with leave taken under FMLA and may not be taken in addition to leave under FMLA.
  • An employer may require that payment made under DE PFML be made concurrently or otherwise coordinated with payment made or leave allowed under the terms of disability or family care leave under a collective bargaining agreement or employer policy. The employer must provide employees written notice of this requirement.
  • An employer may require the use of unused accrued paid time off before accessing DE PFML benefits, and the use of accrued paid time off may count toward the total length of leave provided under this chapter, if the employee is not required to exhaust all paid time off.  “Paid time off” is defined as an employer’s provision of vacation and sick leave.
  • An employee may not access DE PFML benefits if the use of benefits results in the employee receiving more than 100% of their weekly wages.
  • The DE PFML law does not diminish an employer’s obligation to comply with any of the following that provide more generous leave:
    • A collective bargaining agreement;
    • An employer policy; or
    • Any other law.

Collective Bargaining Agreements (CBA)

• • An individual’s right to covered leave may not be diminished by a collective bargaining agreement entered into or renewed, or an employer policy adopted or retained, after the law’s effective date (July 1, 2022).

Notice Requirements

1. Individual notice

• • At time of hire, and
  • When an employee requests covered leave or when the employer acquires knowledge that an employee’s leave may be for a qualifying event under DE PFML.

Note: At the time a Covered Individual files a new claim for DE PFML benefits, the employer or an approved private plan must also advise the individual that:

(1)  Family and medical leave benefits may be subject to federal and state income taxes;

(2) Requirements exist pertaining to federal and state estimated tax payments on family and medical leave benefits; and

(3) Under regulations established by the Secretary, applicable taxes will be deducted and withheld from the Covered Individual’s payment of family and medical leave benefits.

2. Poster displayed in a conspicuous place accessible to employees at the employer’s place of business in English, Spanish, and any language that is the first language spoken by at least 5% of the employer’s workforce, if the poster has been provided by the DE DOL.

Note: The DE PFML law features interesting phrasing in designating core administrative functions such as certification collection, claim determination, and benefits payment as the responsibility of “the employer or an approved private plan”. This seems to suggest that employers will be expected to administer DE PFML benefits even if participating in the state program.  However, in one of final sections of the law (§3713) are the statements, “By January 1, 2025, the Department shall establish and administer a family and medical leave insurance program.” and “By not later than [January 1, 2026], the Department shall pay family and medical leave benefits as specified under this chapter.” This may be clarified as additional information is released

Washington Paid Family and Medical Leave (WA PFML) Rules – Waiting Period

On April 26 Washington’s Employment Security Department (ESD) adopted rules regarding the 7-day waiting period for WA PFML benefits.  Effective June 9, 2022, the rules found at WAC 192-500-185 are amended as follows:

• A waiting period does not reduce the maximum duration of an employee’s available paid family or medical leave. The rules were previously silent on this.
• The waiting period does not apply to medical leave taken upon the birth of a child. Currently the waiting period is waived only for family leave for bonding following a child’s birth or adoption and for leave due to qualifying exigency.

Other News

Alabama Adoption Promotion Act

On April 7 Alabama’s legislature passed the Adoption Promotion Act (SB31/Act 2022-424).  Effective July 1, 2022, the Act requires that:

• Employers provide 12 weeks of unpaid family leave to an eligible employee for the birth and care of a child born to that employee during the first year after the child’s birth, or for the care of a child placed with the employee in connection with adoption within one year of the placement of the child with the employee.

Note: As this is a covered reason for leave under federal FMLA, and considering the new law only applies to employers subject to and employees eligible for FMLA, this provision doesn’t pose a significant change for employers.

• Requests for additional family leave due to the adoption of an ill child or a child with a disability must be considered on the same basis as comparable cases of complications accompanying the birth of a child of an employee. Employers are not required to provide additional family leave to an eligible employee once the employee has exhausted the leave to which the employee is entitled under federal law.
• Employers who provide paid leave* to an employee for the birth and care of a child born to that employee must also provide the lesser of either (1) equivalent paid leave or (2) two weeks paid leave to an employee for the care of a child placed with the employee in connection with adoption during the first year after the placement of the child with the employee.
  • An employer is only required to provide paid leave described above to one of two different eligible employees if both employees would be using the benefits for the care of a child placed for adoption with both employees.
  • * Update June 2, 2022:  According to guidance we have obtained from legal resources, “paid leave” would include benefits provided under an employer’s Short Term Disability program. This means that, even if an employer does not sponsor a separate paid leave policy for bonding, but does offer STD benefits for childbirth and recovery, they must provide paid leave to an employee who adopts a child.
• Leave benefits may be taken by an employee intermittently only if the employee and the employer agree.
• Employee must provide at least 30 days’ notice of intent to take the leave, except that if the date of placement requires leave to begin in less than 30 days, the employee shall provide notice as is practicable.

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