September 25, 2022

Unitranche

Supportive Business Potential

Paid family leave bill passes the House

Delaware Legislative Hall. | DBT PHOTO BY JACOB OWENS

DOVER – With limited debate, the Delaware House of Representatives approved a bill that would create a state-run paid family and medical leave program passed Thursday afternoon, once again falling mostly on party lines.

The bill saw three Republicans, Rep. Michael Smith (R-Pike Creek), Rep. Kevin Hensley (R-Middletown/Townsend) and Rep. Michael Ramone (R-Marshallton), voted for it, bringing the final vote to 29-11. Applause broke out on the House floor after the results were read.

Senate Bill 1 heads back to the Senate for a final vote, where it is expected to pass easily, and then heads to Gov. John Carney’s desk for his signature.

“Delaware has set the example by becoming one of the first states to establish paid parental leave for state employees and teachers. Now, Delaware has done the right thing for thousands of private workers and ensured they have access to paid family and medical leave,” Rep. Debra Heffernan (D-Brandywine Hundred), who led the bill through the house, said in a statement.

Unlike previous discussions on SB1, also known as the Healthy Delaware Families Act, in the past few months which took hours of debate, the House discussion lasted about 25 minutes. Most representatives levied questions to clarify which businesses it would impact, and some offered their appreciation for the collaborative effort in amending the measure.

Smith thanked Sen. Sarah McBride and Heffernan specifically for their work across the aisle to hear every concern.

“I think this has been a very complicated issue that is always well intentioned and has a practical application for a lot of business owners,” Smith said. “While I still don’t believe it’s the right timing for it, I think that you [Heffernan] and Senator McBride did a fantastic job of hearing our concerns and trying to adapt them into the bill. I thought that  actually was the ‘Delaware Way’ that people talk about.”

Others used their time to briefly argue about the bill and reiterated their stance against it. Rep. Lyndon Yearick (R-Camden) disagreed with the concept of mandating businesses on best practices for recruitment and retention, arguing that the marketplace will drive those needs.

“These are small business owners that provided that for employees that they valued and they appreciated their effort,” Yearick said.  “I still believe individuals in a competitive marketplace whether it’s a challenge to find good employees right now, regardless of what the role is, employers could offer this on their own, which they do.”

SB1 would offer 12 weeks paid parental leave and six weeks of medical and caregiving leave through a state social insurance program. Under the bill, eligible Delaware workers could receive up to 80% of their average weekly wages or up to $900 through the state-run insurance program. 

Businesses with less than 10 employees would not automatically qualify for paid parental leave, and those with 25 employees or less would not be covered for caregiving or medical leave.

Paid family and medical leave would only apply to full-time employees who worked 1,250 hours, or a full year, much like the federal Family Medical Leave Act of 1993. The benefit is tied to inflation, state officials noted.

The program would be funded by a 0.8% tax of an employee’s weekly pay, split evenly by the employee and employer. Breaking that down, Geisenberger notes that 0.4% tax would be for medical leave benefits, 0.08% for family caregiving — which included military leave — and 0.32% for parental leave. 0.8% would equal $4 for every $1,000 spent.

Another notable feature of SB 1 is that, if the program begins, contributions start at a fixed rate in 2025 and 2026, but it can adjust.  

The Delaware Department of Labor will be assessing the rate in early 2027. The bill is written to in essence cap the contribution rate to 1%, and if the benefit formula were to go over 1%, it would decrease benefits for workers. After payouts are assessed and costs to administer the program, the Secretary of Labor will determine whether it would be lowered.

Businesses would be able to opt out of the potential Paid Family and Medical Leave program, if they have an established paid leave program that is comparable. Businesses can choose to opt in for one of the three leave policies — medical, caregiving, parental — and leave the other policies on the table to mix and match with the private policies.

McBride celebrated the passage of SB 1, noting her and Heffernan’s hard work in working on concessions on the bill, calling the amendment “the result of thoughtful discussion and negotiation” in the past year.

“I want to thank my colleagues in the House for voting today to make sure thousands of working families in Delaware never again are forced to choose between earning a paycheck and welcoming a newborn or providing care to a family member fighting for their life,” McBride said.