The Delaware General Assembly this year will discuss extending paid medical and family leave to the private sector, and possibly join a small number of states to expand support. | DBT FILE PHOTO
Democratic lawmakers are about to introduce a bill requiring Delaware companies to provide paid family and medical leave to their employees. This is a potentially difficult sale in a state known for its business-friendly practices.
Pending Vacation Bill sponsors want Delaware employees to have up to 12 weeks per year off for certain qualifying events. These include admitting a new child, treating a serious medical condition, caring for a sick family member, and managing the effects of domestic violence or military service of a family member.
Legislative details – including cost to Delaware employers – are still being worked out. According to illustrators, it would not go into effect immediately if it were passed.
State Senator Sarah McBride
State Senator Sarah McBride (D-Wilmington), sponsor of the law and one of the General Assembly’s progressive Democratic newcomers, said paid vacation will level the playing field between small businesses, which make up the majority of Delaware employers, and larger corporations Providing competitive advantage – what she calls “an advantage in the competition for talent”.
“As more states adopt this, Delaware is at a disadvantage in talent recruiting and retention in our state because so many workers want to live in places where they know they will keep that advantage,” said McBride.
About a Quarter of private sector employees According to the US Bureau of Labor Statistics, the US did not have access to paid sick leave in 2020. That number has steadily declined over the past decade, down from 37% in 2010. Of those who had access to paid sick leave, 68% had an average of just eight days per year.
A paid vacation policy would be a big change for Delaware employers and the state’s business landscape.
“We would look for a proposal that would give employers the greatest possible flexibility as we believe they are in the best position to meet the needs of their employees in relation to the realities of the market and the financial health of those they run Company to evaluate, “said Michael Quaranta, president of the Delaware State Chamber of Commerce.
The board did not take a position on the outstanding invoice because it was not submitted.
What the bill might contain
Paid vacation in Delaware would work as a social security program with payroll contributions Collected by the State Department of Labor, similar to Social Security and Unemployment Programs work.
Currently, nine states and the District of Columbia require paid family and sick leave.
“We can look at other states, see what works well, and develop the right solution for Delaware,” said McBride.
The Delaware Bill sponsors have not yet decided how the paid vacation program will be funded.
One option is to split the paid vacation contributions between employees and employers, since they are located in Washington state.
The paid vacation bonus there is 0.4% of a worker’s gross wage, and employers pay just over 36% of that. That is, if an employee in Washington makes $ 50,000, the employer pays $ 73, while the employee contributes about $ 127 per year.
Washington also has a small business exemption that Delaware lawmakers are considering they should require separate contributions between employers and employees.
In states like California and New Jersey, the programs are 100% financed through wage deductions. New Jersey Workers pay 0.28% on the first $ 138,200 (the state’s) this year income cover for family vacation) in covered wages or an annual maximum of about $ 387. Those who take vacation get 85% of their average weekly wage, capped at $ 881 per week.
Delaware workers’ income would also be partially funded up to a certain percentage, and there would be a weekly cap. For example, an executive who makes $ 400,000 per year is unlikely to receive the full payout.
According to Liz Richards, executive director of the recently launched program, a private company with its own vacation policy may opt out if the vacation program is in line with the state program or is more “generous” Delaware Cares Coalition for Paid Vacation, a group of 35 government organizations supporting the effort.
To qualify for paid vacation, Delaware employees would need to work a certain number of hours per week or year and have worked for the company for a certain amount of time.
Lawmakers said it will also take into account the seasonality of some businesses, particularly those in the Sussex County resorts that make most of their profits and hire temporary workers during the summer.
Not just about affordability
A government-led paid vacation policy can be cheaper than paying out of pocket, McBride said.
“Many small and medium-sized businesses struggle to provide this benefit to their employees on their own,” said McBride. “These state social security programs really are the most economical way to get this benefit for any worker.”
Employers can use the wages saved by the employee’s absence to hire agency workers or find a way to split the work among existing employees, Richards said.
But affordability isn’t the only factor at play, according to business figures.
“Fortune 500 companies have a lot of flexibility when someone is on paid vacation,” said Michael Egenton, vice president of the New Jersey Chamber of Commerce. “They have more employees to draw from. We were initially concerned that small employers might not always have this ability. “
New Jersey has required paid vacation since 2009. The state expanded its paid family vacation insurance program to 12 weeks amid the coronavirus pandemic last July.
Business advocates fear that the requirements don’t take into account the different sizes, locations, markets, and finances of the business world.
“It doesn’t mean you never do anything, but it’s incredibly important for people to realize that a single policy written without these realities and considerations will have limited implications,” Quaranta said.
According to on 2012 survey from 259 companies According to the New Jersey Business and Industry Association, 54% of small businesses and 59% of large employers reported having higher administrative and overtime bills due to the state’s 2009 Paid Family Vacation Act. This financial impact can be detrimental to companies that continue to struggle with rising economic costs, ”the study said.
“It’s never just that one problem,” Egenton said when asked how paid vacation is affecting employers in New Jersey. “They are all piled up. I have taxes. I have rules. I have agencies that do spot checks. Let’s throw in a pandemic. “
By Taylor Goebel
Contributing writer
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