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Capital City
Dover
Timezone
EST
(
GMT-5
)
Paid Leave
None
Income Tax
12.85%
Employer Tax
8% - 18%
Capital City
Dover
Timezone
EST
(
GMT-5
)
Paid Leave
None
Income Tax
12.85%
Employer Tax
8% - 18%
Delaware offers a business-friendly environment with no sales tax and low franchise taxes, making it cost-effective for employers.
The state has a skilled workforce, especially in finance, healthcare, and technology.
Additionally, Delaware’s favorable corporate laws and renowned Court of Chancery provide legal and tax advantages for businesses.
In Delaware, workers’ rights are protected by numerous employment and labor laws, at both the state and federal level. As a result, employees enjoy protection from discrimination based on age, religion, sexual orientation, gender, and race. Here are the key things you need to know about hiring in Delaware.
You will need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number is used for tax reporting purposes and is required for filing taxes, paying employees, and reporting wages. Additionally, you will also need to register for a Delaware State Payroll Tax Number with the Delaware Division of Revenue to handle state income tax withholdings, unemployment insurance, and other state payroll taxes.
There are no specific state laws limiting the number of hours an employee can work in a day or week, except for certain industries and minors. However, employees are protected under the federal Fair Labor Standards Act (FLSA). Delaware does not require employers to provide breaks for adult employees, though regulations apply to minors regarding working hours.
Full-time employment in Delaware is considered to be working 40 hours per week. However, the definition may vary depending on the employer's policies or the benefits offered, such as health insurance. Employers should define full-time employment in their company policies.
Delaware law does not require a specific probationary period for new employees.
As of January 1, 2024, the minimum wage in Delaware is $11.75 per hour. This applies to most employees in the state, with certain exceptions, such as tipped employees, who have a lower minimum wage rate. Tipped employees can receive a base wage of $2.23 per hour, provided that their tips bring their total earnings to at least the state’s minimum wage rate.
Delaware adheres to federal overtime laws under the FLSA. Employees are entitled to overtime pay at 1.5x their regular rate for hours exceeding 40 per week. Delaware does not have state-specific daily overtime rules.
Employees can be exempt if they:
The federal salary threshold is $684 per week or $35,568 per year.
Delaware's Anti-Discrimination Laws protect employees from discrimination based on race, color, national origin, sex, age (40+), disability, religion, marital status, familial status, genetic information, sexual orientation, and military status. Discriminatory practices in hiring, firing, promotions, job assignments, and compensation are prohibited. Employers must also provide reasonable accommodations for employees with disabilities unless it causes undue hardship.
Common payroll cycles include weekly, bi-weekly, semi-monthly, and monthly. Therefore, bi-weekly payroll is a permissible and common option, but it is not mandated by state law; the choice depends on the employer's payroll policies
Employment taxes and statutory fees affect both your payroll and your employees’ paychecks in Delaware. Understanding the tax obligations for both employers and employees is crucial when operating in Delaware's business landscape. This section explains how taxes and statutory fees affect payroll and individual earnings in Delaware. Note that employees may be liable for additional local taxes in certain cities and jurisdictions.
Delaware employers pay Unemployment Insurance (0.3% - 8.2% on the first $14,500 of wages) and Workers’ Compensation Insurance.
Employees in Delaware pay state income tax based on income brackets, plus federal Social Security and Medicare taxes.
Delaware does have a state income tax, and individual income tax returns are due by April 30, which is different from the typical April 15 deadline in many other states.
Delaware employers must withhold state income tax based on employee elections. The Unemployment Insurance (UI) tax rate ranges between 0.3% and 8.2%, applicable to the first $14,500 of wages. Employers need to file quarterly UI tax reports using Form UC-8. Compliance with federal payroll taxes, such as FICA, is also required.
In Delaware, there is no state-mandated pension system for private-sector employees. However, employers in Delaware may offer retirement plans such as 401(k)s or other pension options as part of their benefits package, provided it complies with federal regulations like ERISA.
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Delaware does not require employers to offer paid or unpaid vacation leave. If vacation leave is provided, employers must follow their own policies regarding accrual, carryover, and payment upon termination.
Below are the mandatory leave entitlements for full-time employees in Delaware.
Under the Delaware Paid Family Leave (PFL) program, eligible employees can take up to 12 weeks of paid maternity leave. However, employees must contribute to the PFL program, and employers are not required to provide this leave unless the employee meets the criteria.
Similar to maternity leave, paternity leave allows eligible employees to take up to 12 weeks of paid leave under the PFL program. Employees must contribute to the program, and employers are not required to offer it unless the employee qualifies.
Delaware does not require employers to offer paid time off (PTO). If offered, PTO is paid and determined by the company's policy.
Employees in Delaware are entitled to take leave for the scheduled duration of jury duty. While employers are not required to pay for jury duty leave, they may be required to provide paid leave if military benefits cover the employee’s jury service.
Employees who are emergency responders can take leave for the duration of the emergency. Employers with 10 or more employees are required to provide this leave, but it is typically unpaid unless covered by other leave policies.
Delaware law provides up to 30 days of paid leave for employees donating organs, and up to 7 days for bone marrow donation. This applies to public and private employers with 50 or more employees.
Employees who serve in the armed forces are entitled to unpaid military leave for the duration of their military tour, plus an additional 90 days after the tour ends. Employers are not required to pay for this leave, but must follow USERRA guidelines for military service.
While Delaware does not require employers to provide bereavement leave, up to 5 days of paid leave may be offered based on the employer’s policy for employees grieving the loss of a loved one.
Employees affected by domestic violence or sexual assault are entitled to up to 12 weeks of leave. Under FMLA, this leave is unpaid, but paid leave may be available through PFL for those contributing to the program.
Employees in Delaware are entitled to reasonable time off to vote during elections. This leave is typically unpaid, unless the employer’s policies specify otherwise, and it applies when an employee lacks sufficient time outside of work hours to vote.
Delaware requires workers' compensation insurance for all employers. Paid sick leave is not mandated, but businesses with 50 or more employees must comply with the federal Affordable Care Act (ACA). Standard benefits like vacation time and health insurance help attract and retain talent.
Competitive benefits are essential for attracting and retaining top talent in Delaware. Offering the right package helps employees feel valued and motivated. Our benefits experts understand the local labor market's trends, requirements, and expectations, ensuring your employees feel valued and supported. Common benefits in our Delaware packages include:
No, Delaware employers are not required by state law to provide health insurance. However, federal legislation - such as the federal Affordable Care Act (ACA) - applies.
Part-time employees may receive benefits based on specific eligibility criteria and employer policies.
No, Delaware does not require employers to offer retirement plans like 401(k).
The termination process is governed by the “at-will employment” doctrine, meaning that either the employer or the employee can end the employment relationship at any time, for any lawful reason, or for no reason at all. However, there are exceptions. Termination cannot occur based on discriminatory reasons such as race, gender, age, religion, or disability. Additionally, an employer cannot terminate an employee in retaliation for engaging in protected activities, such as filing complaints about workplace safety or discrimination.
No notice period required.
In Delaware, employers are not legally required to provide severance pay when terminating an employee unless it is specified in an employment contract, company policy, or a collective bargaining agreement. Severance pay is entirely at the discretion of the employer unless otherwise agreed upon.
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