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Recent Changes in Delaware Employment Law

From: Delaware State Chamber Business May/June 2024 Issue

BY G. KEVIN FASIC, ESQ. AND ANTHONY N. DELCOLLO, ESQ.

IN RECENT YEARS, the Delaware General Assembly has introduced and passed legislation aimed at strengthening employee rights. While these efforts are positive for employees, some aspects create unintended consequences for small and mid-sized businesses. Increased regulatory complexity could make day-to-day operations more burdensome, potentially discouraging new business formation and impacting the growth of existing companies. These changes might make hiring decisions more challenging for employers, impacting overall workforce levels in the State. Some specific examples include:

SB 145 (signed): This new law clarifies and establishes caps on damages allowed in claims of employment discrimination. The caps exceed what is allowed under federal law. The likely result is that claimants will elect state courts to pursue these claims.

SS1 for SB 102 (signed): Contrary to decades of precedent, and federal law, this new law mandates prevailing wage rates on public works construction projects be paid to workers who fabricate custom components, regardless of where such work is performed. However, how this will be enforced when the work is performed out-of-state, by workers who never set foot in Delaware?

SB 27 (signed): This new law increases the statute of limitations for wage and other employment claims from one year to two years, changing decades of precedent.

HB 205 w/ HA3 (signed): This new law creates a state-sponsored retirement plan for employees that is to be “facilitated” by employers.

SS2 for SB1 (signed): This law, signed in 2022, creates an entirely new paid family and medical leave program that applies to employers with ten or more employees. Many employers are still unaware of this new law and its requirements. In addition to new tax burdens, this law provides for stiff penalties for noncompliance.

SB 35 (signed): This new law creates the crime of “wage theft” and subjects all Delaware employers (including owners and officers, individually) to criminal liability for various “wage violations.” For instance, improperly classifying an employee as an independent contractor is a violation.

SB 233 (pending): This Bill would establish employment protections, including mandatory employment by successor employers, for workers in the service sector.

HB 17 (pending): This Bill would mandate an hour of earned sick or safety time for every thirty hours worked by an employee, potentially conflicting with SS2 for SB 1, above.

SB 229 (pending): This Bill would allow former employees access to their former employer’s personnel file (including medical records) and expands what must be in the file.

HB 258 (pending): Overturning decades of precedent, this Bill would require domestic workers (including babysitters, housekeepers, nannies, and others) to be paid at least minimum wage.

The new laws and pending bills listed above are a sample of the efforts to protect employees from their employers. Whether they are necessary is a different question. What is clear is that employers, regardless of industry or size, have increasing regulatory obligations. Stay tuned for how these play out once enforcement begins.

G. Kevin Fasic, Esq. is managing principal of Offit Kurman’s Wilmington office and Anthony N. Delcollo, Esq. is a principal of Offit Kurman’s labor and employment practice group.