The Delaware State Chamber of Commerce has raised significant concerns about an early draft of regulations to implement a new state law requiring paid family leave.
“While I appreciate the enormity of your task, and with no disrespect intended, I find the law and existing draft regulations to be extremely daunting and difficult to use,” Timothy M. Holly wrote on the first page of his 41-page letter, prepared for the chamber and sent to the Delaware Department of Labor. He is co-chair of the labor and employment law group at Connolly Gallagher in Wilmington.
“In short, the law and regulations present a substantial burden as to both learning and implementation, with the ‘how-to’ and ‘what must I do’ frequently very unclear.”
The Healthy Delaware Families Act, which Gov. John Carney signed into law last May, mandates up to 12 weeks of paid family and medical leave for Delaware workers starting Jan. 1, 2025. The long gap is to allow time for creating regulations, forms, portals and other bureaucratic elements.
“This is exponentially complicated,” said Michael Quaranta, president of the chamber, referring to challenges that will make it difficult for small businesses to comply with Delaware’s family leave rules. “Compliance with the federal Family and Medical Leave Act is complicated enough.”
He emphasized the limited expertise of small businesses and the complexity of compliance.
Delaware has about 57,000 businesses. Big businesses employ about 240,000 workers. Small businesses – 56,000 of them – employ the other 240,000 workers.
Small businesses often hire a human resources staffer only when they reach 20 to 30 employees.
In the letter, Holly raises a dozen “high-level observations, requests and/or concerns.”
He starts out by asking how employers should handle salaried workers and owner/employees and how part-time status factors in employee count. Provisions apply differently to employers with at least 25 employees, employers with 10-24 employees and others. That last category includes the obvious (employers with less than 10 employees), and also the federal government and seasonal businesses.
“Employers will have many questions for which there appears to be no answers,” he writes in the letter for the chamber about applying the new law to telecommuting and traveling for work.
In the letter, he writes about burdens and lack of clarity at least 30 times each. “Delaware, including DDOL through these regulations, is making it increasingly difficult to do business in Delaware,” he writes. “It is self-defeating to do so. Proceed with caution. And ease employer burden, please.”
Unsurprisingly, all the politicians quoted when Carney signed the bill lauded the benefits, not the burdens. “It will make Delaware more attractive for younger workers,” Carney said.
Sen. Sarah McBride, D-Wilmington and the bill’s primary sponsor, referred questions to the Delaware Senate Majority Caucus, which referred questions to the Delaware Department of Labor.
The department plans to submit regulations to the Office of the Registrar March 15.
“This does include a public comment period,” a department spokesman said.
OF INTEREST: Compromises made along the way
The bill was actively pushed by the Delaware Cares Coalition for Paid Leave and its 60-plus member groups.
The law creates an insurance program that covers workers’ serious health condition, care for family members with serious health conditions, care for a new child and the impact of military deployment.
The cost of family leave
“We are pleased that it is increasingly closer to a policy that allows both employers and employees to appropriately deal with life events while recognizing the economic realities of running a business,” the chamber said last March, before the bill became law.
It had worked with McBride, who met with many stakeholders and altered her bill to address some concerns.
Quaranta said Monday the chamber continues to support the law and plans to continue to offer input so its implementation is “seamless and easy to understand.”
Delaware joins a dozen states on family leave, but Quaranta said few have implemented laws.
Benefits of the new family leave law would be paid with “contributions,” which the letter written for the chamber recommends calling “taxes.”
“Without that clarification, this is confusing,” the letter says.
The law says these contributions will start out at 0.04% of wages for medical leave, 0.08% for family caregiving leave and 0.32% for parental leave. Starting in 2027, these rates are to be adjusted to consider “sound actuarial principles” and inflation.
Employers can pay the whole 0.8%, the law says, or they can deduct up to half of it from employees’ wages.
The law’s fiscal note anticipates the state spending $17 million to set it up and $6.5 million annually to run it.
Holly’s letter closes with these sentences: “Feedback provided above does not necessarily reflect the views of any particular person or organization – including the organizer of the feedback or even the author of any feedback.
“Delaware State Chamber of Commerce reserves all rights to develop a formal organizational position on any matter, regardless of whether it is consistent with above feedback.”
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