Delaware Senate approves paid leave bill
DOVER – The Delaware State Senate approved a bill to create a state-run paid family and medical leave social insurance program in a party-line vote Tuesday afternoon, moving the controversial Senate Bill 1 to the House of Representatives.
The 14-7 vote Tuesday fell along the chamber’s partisan split, with all 14 Democrats backing the bill after two hours of debate on the floor. The vote came after SB1 was moved out of the Senate Health & Social Services in January, while the Finance Committee approved it Tuesday morning via a procedural move. Rep. Debra Heffernan (D-Brandywine Hundred) will now lead the bill’s efforts in the House.
State Sen. Sarah McBride (D-Wilmington) sponsored the bill last year that has raised a number of concerns from the business community, particularly small and medium-sized businesses. She amended the bill after the end of the last session and refiled it this year after spending six months touring the state and building support for the bill, including a vote of confidence from Gov. John Carney who said in his State of the State address that he would sign the bill.
“We should do everything we can to support businesses and the employees who work there,” Carney said in a statement released after the vote. “Younger workers aren’t just looking for a job; they’re looking for a way of life. This legislation builds on the work we’ve done for state employees and extends paid leave into the private sector. It’s the right thing to do, and it will help attract a talented workforce to live, work, and raise their families in Delaware. Thank you to members of the Senate for passing this legislation, and to Senator McBride for her leadership on this important issue.”
The Senate approval also came after large employers like ChristianaCare and Nemours Children’s Health have backed the bill in recent weeks.
Notably, the New Castle County and Rehoboth-Dewey Beach chambers of commerce have opposed the bill, but other chambers have remained neutral. On Tuesday morning, the Delaware State Chamber of Commerce and the Delaware Business Roundtable, a consortium of the state’s top CEOs, released a statement that essentially backed down any opposition.
“The current version [of SB1] more closely reflects the Federal Medical Leave Act. It provides clearer definitions and more time for employers to evaluate their current policies, react, and plan for the future. As we continue to look at the bill, 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,” they wrote.
In her comments before Tuesday’s vote, McBride said “the scale of the change that we can affect in this chamber is awe-inspiring.”
“Today, because of our work, there will be millions of Delawareans for generations to come, who when they face the most human of experiences, will have this basic but necessary support system to rely on,” she added.
In introducing the bill, McBride shared her story of using an employer-sponsored paid leave program to nurse and support her then-boyfriend and fiancé, Andrew Cray, as he was treated for cancer. She utilized it in the weeks after they learned his cancer was terminal, hastily planning a wedding and being by his side when he passed.
“At the end of the day, your ability to take care of your health, to look after your family, without sacrificing your income, shouldn’t be a matter of luck, it should be the law of the land,” she said.
Several Republican state senators continued to voice concerns Tuesday about the impact of paid leave on Delaware’s smallest employers.
“A lot of these small businesses are very specialized. You can’t just pull somebody off the street and train them to do whatever tasks there. And the concern that I hear again and again for those small businesses is , ‘When we have an employee that goes on leave, they take the full leave. We can’t replace them. We’ve spent time and money in training and developing these people, so without them our business grinds to a standstill,’” State Sen. Brian Pettyjohn (R-Georgetown) said.
“I support family leave … I just don’t understand why we, in this building, think that we can push that onto employers out there who are already doing it themselves,” State Sen. Colin Bonini (R-Dover) added.
SB1, also known as the Healthy Delaware Families Act, would offer 12 weeks paid parental leave and six weeks for 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.