Employers still have time to grandfather paid leave benefits

The state’s new paid family leave law doesn’t go into effect until Jan. 1, 2026, but now is the time for businesses with an existing paid family leave program to apply with the state for a five-year grandfathering of their current paid leave program. The deadline for businesses to apply for grandfathering is Sunday, Dec. 31.

In May 2022, legislation was signed into law creating a statewide paid family and medical leave insurance program, which offers eligible Delaware workers up to 12 weeks of paid leave to address a worker’s own serious health condition; to care for a family member with a serious health condition; to bond and care for a new child; or to address the impact of a family member’s military deployment.

To help its members begin to wrap their heads around the new program, the Rehoboth Beach-Dewey Beach Chamber of Commerce hosted Delaware Division of Paid Leave Director Chris Counihan during its monthly membership luncheon Nov. 29.

Counihan said the program is similar to the federal government’s Family and Medical Leave Act, which has been around for 30 years. This is the paid version of FMLA, he said.

Counihan said it’s not just an employee benefit; the program will also benefit businesses because it will allow them to compete with businesses in other nearby states, he said, adding there are 14 states that already have a program like this, including Maryland and New Jersey.

As for the five-year grandfathering option, Counihan said an employer's program has to be similar to what the state is offering. As of that meeting, he said, 25 companies had gone through the application process, and only one had been denied.

Counihan acknowledged the program will push a significant portion of the record keeping onto the employers, but, he said, the state is actively developing an online portal that is being built by an outside company.

“Delaware is not building this. It’s being built by top-notch people from a billion-dollar corporation,” said Counihan. At the time of the meeting, the state had not officially awarded the contract for creation of the program.

Basic program information

The program applies to employers with 10 or more employees, but there are tiers. A business with 10 to 24 employees has to provide parental leave only. A business with 25 employees or more has to provide parental leave, family caregiver leave and medical leave. Federal government employees and seasonal operations that shut down for a month or more are exempt.

The program applies to employees who have been employed for at least one year with a single employer and worked at least 1,250 hours in the most recent 12 months. Coverage includes up to 12 weeks for the care for a new child; up to six weeks for the care of a family member; up to six weeks for addressing an individual’s own illness or injury; and up to six weeks for dealing with issues related to a loved one’s overseas military deployment.

The program will be funded by 0.8% of an employee’s in-state salary. Employers can require employees to contribute up to half the cost.

From Sept. 1, 2024 to Dec. 1, 2024, the opt-in/opt-out opens for employers who wish to use a private plan to opt out of the state’s program, or for small groups to opt into the state’s plan. Beginning Jan. 1, 2025, contributions into the program begin. The first due date for employers is April 30, 2025, but employers will begin collecting employee contributions for pay periods starting Jan. 1, 2025. Employees can submit claim applications for payments Jan. 1, 2026.

For more information on the state’s paid leave program, go to de.gov/paidleave or call 302-761-8375, 24 hours per day, seven days per week.