Delaware: Guidance Issued for State PFML Program
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APPLIES TO Employers with 10+ Employees in DE |
EFFECTIVE As indicated
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QUESTIONS? Contact HR On-Call |
Quick Look
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Discussion
In 2022, Delaware enacted the Healthy Delaware Families Act (HDFA), creating a paid family and medical leave requirement for Delaware employers. As enacted, the obligation to provide paid benefits under the program does not begin until January 1, 2026, with employer and employee contributions beginning on January 1, 2025.
On July 11, 2023, and in anticipation of the HDFA’s effective date, the Delaware Department of Labor Division of Paid Leave (Division) published the first set of rules regarding the PFML program, which are summarized below.
Covered Employers and Employees
The HDFA applies to employers with 10 or more employees in Delaware. Employers with 10 to 24 employees in Delaware, however, are only required to comply with law’s Parental Leave requirements. Employers with 25 or more employees in Delaware are subject to all PFML requirements. As outlined in the rules, employers should determine whether they meet either the 10-employee or 25-employee coverage threshold by counting the number of employees over the preceding 12-month period
“Covered employees” include individuals who (1) work primarily at a worksite in Delaware (i.e., spend at least 60% of their working hours physically in Delaware) and (2) meet or are reasonably expected to meet the employee eligibility requirement of 12-months of service and 1,250 hours of service within the previous 12-month period. “Reclassified” employees must be counted but employees who are covered by a waiver of coverage are not. The rules define under what circumstances an employer may “reclassify” employees, as well as what is required to establish a waiver of coverage.
Once an employer meets either the 10-employee or 25-employee coverage threshold, the employer will remain subject to the program for at least 12 consecutive months. After the 12-month period, and with a covered employee count below either the 10 or 25-employee coverage threshold, the employer will no longer be obligated to comply with the applicable provisions of the HDFA. However, employers with 10 to 24 employees may voluntarily “opt in” to allow its employees to access PFML benefits for family caregiver leave, medical leave, or qualified exigency leave through the program. Employers must provide notice to employees who gain or lose coverage under the HDFA due to the change in their employer’s headcount.
Reasons for Use and Duration of Benefits
The rules categorize the PMFL benefits into four different areas of coverage:
- Parental Leave – leave authorized for time off within the first year after birth, adoption, or placement through foster care of a child.
- Family Caregiving Leave – Leave authorized for time off in the event of a serious health condition (illness or accident) of a child, spouse, or parent.
- Medical Leave – Leave authorized for time off in the event of the employee’s serious health condition.
- Qualified Exigencies – Leave authorized for time off for qualified issues that arise in connection with a military deployment.
Employees are eligible to receive up to 6 weeks of PFML in a 24-month period to be used for Family Caregiving Leave, Medical Leave, or Qualified Exigencies. The 24-month period is the 24-month period that begins on the first day of the requested leave.
Employees are eligible for up to 12 weeks of PFML in an application year to be used for Parental Leave. The “application year” is the employer’s designated 12-month period for leave under the federal Family Medical Leave Act (FMLA). If employees are combining Parental Leave with another line of coverage, employees are eligible for a maximum of 12 weeks of PFML in an application year.
The rules provide that employers with 10 to 24 employees may temporarily reduce the Parental Leave maximum benefit duration from 12 weeks to a minimum of 6 weeks for claims submitted prior to January 1, 2031. To qualify for this option, employers must notify the Division of their intention to do so by January 1, 2024, and they must notify their employees of this decision in writing no later than December 1, 2024.
Additionally, employees who are on Family Caregiving Leave for a family member who dies must notify the Division of the date of the family member’s death within 72 hours of the person’s passing. The Division may then continue to pay PFML benefits until seven days after the death of the family member or the previously approved end date for the leave.
The rules indicate that the Division will approve PFML benefits for leave taken on an intermittent or reduced schedule basis, but only when it is medically necessary and supported by documentation. PFML benefits are payable in increments as small as one workday, so if an employee is approved for and takes intermittent FMLA in smaller increments (i.e., 2 hours), the employee will not be eligible for PFML benefits during that absence. The rules do not address the possibility of taking Parental Leave intermittently.
Payroll Contributions and Amount of Benefits
Payroll contributions will begin on the later of either January 1, 2025, or the first day of the payroll period after the employer meets or exceeds the 10 or 25-employee coverage threshold. Payroll contributions will be submitted to the Division on a quarterly basis.
Employers must contribute 50% of the total contribution, but they may elect to contribute more. If an employer decides to contribute more than 50%, the employer must file a change with the Delaware DOL and provide notice to all affected employees by December 15 of the year prior to the January 1 effective date the following year.
Employee Notice Obligations
Under the rules, employees generally should provide employers with at least 30 days’ advance notice of a need for leave under the HDFA. If 30 days’ notice is not practicable, because of a lack of knowledge, a change in circumstances, or a medical emergency, notice must be given as soon as practicable, considering all the facts and circumstances of each individual case.
If the need for leave was clearly foreseeable to the employee at least 30 days in advance of the leave but the employee fails to give timely advance notice with no reasonable excuse, the employer may delay coverage until 30 days after the employee provides notice.
Private Plans
As with most other PFML programs across the country, employers may opt to use a private PFML plan rather than the state’s PFML program. The private plan must provide the same or greater rights, protections, and benefits to employees as they would receive under the state program. Employers may require employees to contribute to the private plan, but not more than what employees would have contributed under the state plan. Employers may also opt for a hybrid approach which may include combining a private plan for certain lines of coverage with the state PFML program for the remaining lines of coverage.
The application for submitting a proposed private plan for substitution will be opened on September 1, 2024. Applications to substitute a private plan for calendar year 2025 must be submitted by December 1, 2024.
Exemptions from Coverage for Pre-Existing Policies
Under the rules, employers that offered private paid time off benefit plans that were in place before May 10, 2022, may be exempt from compliance with the HDFA until December 31, 2029 if their plan is deemed “comparable” to the state’s public plan and they were made available to all employees. To qualify for this exemption, employees may not be required to contribute more to the employer’s “grandfathered” plan than what they would be required to continue under the state PFML program. Additionally, the grandfathered plan’s benefit percentages, maximum benefits, and benefit duration must be within 10% of the state PFML components.
Any grandfathered plan cannot be altered unless the change improves the benefit offered to employees and is approved by the Division. The deadline for submitting grandfathering applications is January 1, 2024. The application will be made available on October 1, 2023.
Action Items
- Review the Delaware Department of Labor website for more information on the PFML program.
- Revise policies and train appropriate personnel on paid time off procedures.
- Consult with counsel regarding any potential “grandfathered” exemptions or substitution of private plans.
- Subscribers can call our HR On-Call Hotline at (888) 378-2456 for further assistance.
Disclaimer: This document is designed to provide general information and guidance concerning employment-related issues. It is presented with the understanding that ManagEase is not engaged in rendering any legal opinions. If a legal opinion is needed, please contact the services of your own legal adviser. © 2023 ManagEase