Delaware Paid Family and Medical Leave: Employer Requirements

Employee deductions

Employers may deduct up to 50% of these contributions from employees through payroll deductions. The state agency and payroll system both treat the deduction of the full 50% as the default choice by employers.

For an employer with 10 to 24 covered employees that deducts 50% of the required total contribution from employees:

For an employer with 25 or more covered employees that deducts 50% of the required total contribution from employees:

Employee count

To calculate the number of employees for the purposes of determining required lines of coverage:

1. Count every covered employee.
2. Add Reclassified employees (discussed below).
3. Subtract Waived employees (discussed below).

If an employer crosses a coverage threshold, they must:

• Notify employees at least 30 days prior to deducting contributions for new lines of coverage.
• Begin collecting contributions for that additional coverage within 5 weeks.

Note: Employers can gain lines of coverage by crossing an employee count threshold at any time, but employers only lose lines of coverage by staying below an employee count threshold for 13 consecutive months — 12 months to lose the line of coverage and 30 days to provide notice to employees of the loss of coverage.

Important: It is the employer's responsibility to monitor and initiate any payroll system changes required based on these changes in employee count and applicable lines of coverage. If an employer crosses an employee count threshold that requires an additional line of coverage, the employer must act comparatively quickly to notify employees and add the required payroll system tax codes to the employer and all covered employees.

Special employee circumstances

Reclassification

• Employees that do not work at least 60% of the time in Delaware but are connected to a Delaware work location in some way may be Reclassified as covered by the program.
• Both the employee and employer must complete a formal Reclassification process with the agency.
• For a Reclassified employee, both in-state and out-of-state wages are covered for the purposes of calculating contribution and benefit amounts.

Waivers

• Employees who are covered for the purposes of contributions but whose employment is not expected to meet the requirements of benefits eligibility — because they are expected to work short-term (less than a year) or very part-time (less than 1,250 hours per year) — may be Waived from contribution coverage.
• Both the employee and employer must complete a formal Waiver process with the agency.
• For a Waived employee, contributions are not required, but the employee must still be reported on the quarterly hour and wage report.

Private plans

• Employers may provide paid leave coverage as an alternative to the state program through a private insurance plan or, if the employer has at least 100 employees, self-insurance.
• For a private plan to be recognized by the state agency, the employer must complete a formal approval process, with applications to the agency open from September 1 through December 1 for plans effective in the subsequent calendar year.
• For 2025, the deadline to submit an application to use a private insurance policy was extended to December 15, 2024.
• An employer with an approved private plan is not required to make or deduct contributions, however, employee details must still be reported on quarterly hour and wage reports.

Form W-2

Employee contributions will be reported in box 14 of Form W-2 with the label DEPFML.

For additional information and other employer requirements related to this program, see the Delaware Paid Leave website.

Part 2: Payroll system setup

CoAd has assigned DE PFML payroll system tax codes to employers and employees based on an employee count associated with Delaware Work Locations.

When the DE state income tax withholding payroll system tax code is newly assigned to an employer, the payroll system will automatically assign the payroll system tax codes for the employer and employee portions of all DE PFML to that employer. These tax codes are required to be manually added to employees.

Review the material below and confirm within the payroll system that you have the appropriate payroll system tax codes assigned to you and your employees, and the appropriate payroll system selections made for your circumstances. If your payroll system tax setup does not accurately reflect the appropriate setup based on the employee count you have determined or other factors, send a support ticket to have this setup modified.

Standard DE PFML tax codes

• An employer with 10 to 24 covered employees should have DEEEPL and DEERPL assigned to them and their covered employees, covering the employer and employee portions of Parental Leave.
• An employer with 25 or more covered employees should have all six tax codes listed above assigned to them and their covered employees, covering the employer and employee portions of Parental Leave, Medical Leave, and Family Leave.

Employer paying the employee portion

If an employer chooses to pay a part or all of the employee portion of these taxes, the applicable tax codes from the following list should also be assigned to them and their covered employees:

If an employer has chosen to pay the entirety of an employee portion line of coverage:

1. Assign the applicable employer-paying-employee-portion DE PFML tax code from above to the employer and covered employees.
2. Within this DE PFML tax code within Tax Administration under Employer Setup, ensure that the Use System Rate checkbox is selected.
3. Delete or exempt the applicable DE PFML employee portion tax code from applicable employees.

If an employer has chosen to pay a percentage of an employee portion line of coverage:

1. Assign the applicable employer-paying-employee-portion DE PFML tax code from above to the employer and covered employees.
2. Assign the applicable employee portion DE PFML tax code to the employer and covered employees.
3. Within the applicable employer-paying-employee-portion tax code within Tax Administration under Employer Setup, uncheck the Use System Rate checkbox and enter the percentage of the employee portion rate the employer will pay in the Percent of Rate field.
4. Within the applicable employee portion tax code within Tax Administration under Employer Setup, uncheck the Use System Rate checkbox and enter the percentage of the employee portion rate the employee will pay in the Percent of Rate field.

Note: An employer should also have the payroll system tax codes for the standard employer portion of the applicable lines of coverage assigned to the employer and their covered employees.

Example — an employer with 10 to 24 employees has chosen to pay 60% of the employee portion of DE PFML:

1. Assign DEERPL, the employer portion of Parental Leave, to the employer and covered employees.
2. Assign DEEEPL, the employee portion of Parental Leave, to the employer and covered employees.
3. Assign DEERPLEE, the employee portion of Parental Leave paid by the employer, to the employer and covered employees.
4. Within the DEERPLEE tax code within Tax Administration under Employer Setup, uncheck the Use System Rate checkbox and enter 60 in the Percent of Rate field.
5. Within the DEEEPL tax code within Tax Administration under Employer Setup, uncheck the Use System Rate checkbox and enter 40 in the Percent of Rate field.

Tax code setup by scenario

If a cell contains text, it means that the corresponding tax code should be assigned to the employer and their covered employees under the scenario described. The text within the cell indicates whether the Use System Rate checkbox should be selected, or whether a percentage should be entered in the Percent of Rate field, in the referenced tax code within Tax Administration under Employer Setup. A dash means the tax code is not used in that scenario.

Employers with 10 to 24 covered employees

Employers with 25 or more covered employees