On May 10, 2022, Governor John Carney signed into law the Healthy Delaware Families Act, which will make Delaware the 11th state in the country to offer paid family leave when the law goes into effect. Starting in 2026, the new law will guarantee 12 weeks of paid parental leave and six weeks of paid medical, caregiving, and military leave to qualified employees through a new state-run paid family and medical leave social insurance program.
Under the law, eligible workers will continue to receive up to 80 percent of their average weekly wage, up to a maximum of $900 a week in 2026 and 2027, while out on a qualified leave. Like the federal Family and Medical Leave Act, the Delaware paid leave law only applies to employees who have worked at least 1,250 hours in the prior 12 months and were employed by the company for a full 12 months prior to taking paid leave.
Employees who work at companies with more than 25 employees will be eligible for the paid parental, medical, military, and caregiver leave. Employees at smaller companies, those who employ between 10 and 24 employees, will be eligible for the 12 weeks of paid parental leave only. Companies who employ fewer than 10 employees are not required to participate in the paid leave program but can voluntarily join the program. Additionally, the law permits businesses to opt out of the social insurance program, if they have an established paid leave program that offers comparable benefits.
The paid leave benefits will be funded by a new 0.8 percent payroll tax on employers beginning in 2025. This 0.8 percent payroll tax is broken down as follows: 0.4 percent for personal medical leave, 0.32 percent for parental leave, and 0.08 percent for caregiver and military leave. Employers can pay the full payroll tax themselves or can deduct up to half of the tax contribution from each covered employee’s paycheck. For example, the full payroll tax for $1,000,000 of annual payroll would be $8,000. If an employer chooses to split the paid leave payroll tax with its employees, an employee earning $50,000 a year will pay $200 per year into the social insurance program.