Gov. Carney signs historic paid leave bill

Gov. John Carney holds up Senate Bill 1 after signing it outside Legislative Hall in Dover on Tuesday, creating a statewide paid leave program in Delaware. | PHOTO COURTESY OF THE GOVERNOR’S OFFICE

DOVER – Gov. John Carney signed Senate Bill 1, also known as the Healthy Delaware Families Act, into law Tuesday, becoming only the 11th state to offer a statewide paid family and medical leave program.

The new program will not go into effect for nearly three years as the state prepares the administration of the policies similar to unemployment insurance. Coverage for workers will begin Jan. 1, 2025.

While historic, the bill, passed nearly entirely along party lines with the support of a Democratic governor and majority statehouse, was not uniformly supported. Many small business owners expressed concern about its impact on their workforces and operations, and state chambers of commerce voiced their worries for members as well.

Noting those concerns, but also that a number of businesses big and small did voice their support for the bill, including ChristianaCare and Nemours Children’s Health, Carney said it wasn’t a zero-sum fight in remarks before signing the bill on the east steps of Legislative Hall.

“We also know that running a business is really hard – to make sure that you can pay the bills and your employee. But I, like all the legislators behind me and so many in our business community, believe strongly that the interest of business owners and their employees are not mutually exclusive. In fact, they’re inextricably related,” he said.

Adding that he was proud to be a Delaware public official, Carney said of the legislators who sponsored the bill, “They were collaborative. They made compromises. They listened and reached out to stakeholders and those affected on every side of the issue. They communicated. They were straight shooters from the beginning. And that’s why, in my opinion, we’re able to stand here today to become one of the first states to offer this benefit.”

State Sen. Sarah McBride speaks at a national bus tour stop in Wilmington for the Paid Leave for All campaign on Aug. 4. | DBT PHOTO BY TAYLOR GOEBEL

Senate Bill 1 was the work of freshman State Sen. Sarah McBride (D-Wilmington), who worked for two legislative sessions to assuage concerns from the business community and earn the votes of her caucus. In the end, three Republican House members joined Democrats in backing the bill.

“This has been really a whole of government approach, a truly collaborative effort between the legislative and executive branches. And I, of course, want to thank you, governor, for your leadership and key partnership on this bill. Your support and vision has been integral and the role that Governor Carney played in this legislation cannot be overstated,” she said.

Liz Richards, director of the Delaware Cares Coalition, that organized health, faith, labor, and business leaders from around the state to lobby for the bill, said, “This day is historic, but it was not guaranteed. We had to fight for it.”

“Too often the burdens of that changing world have fallen to the most vulnerable among us,” she added. “I now look at my daughter Josephine – born a little over 5 weeks ago – and I am profoundly moved by what this bill will mean to those parents and to every child born in Delaware in the years to come.”

SB1 will 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 will 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 will not automatically qualify for paid parental leave, and those with 25 employees or less will not be covered for caregiving or medical leave.

Paid family and medical leave will 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 will 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 will be for medical leave benefits, 0.08% for family caregiving — which included military leave — and 0.32% for parental leave. 0.8% will 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 will 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 will 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.

Reporter Katie Tabeling contributed to this story.