Delaware amends its final pay requirements and introduces wage theft protections for employees.
Final Pay Amendment
Effective October 7, 2022, final pay requirements are expanded to provide that a terminated employee must be paid by the next date on which the wages would normally be paid or three business days after the last day the employee worked, whichever is later. Previously, the law only required payment by the next payday through the employer’s normal payment method, or by mail at the employee’s request.
Payment must be made using the employer’s usual method, or, if requested by the employee, by mail to the address the employee provides.
Wage Theft Protections
On October 7, 2022, a law defining “wage theft” went into effect. Under the law, all employers are prohibited from:
- Employing anyone without reporting their employment to all appropriate government agencies and paying all applicable taxes and fees for them;
- Failing to properly withhold state and federal taxes from an employee;
- Failing to forward money withheld from an employee’s wages to the appropriate state or federal agency within seven days of the applicable pay period;
- Paying an employee less than the state or federal minimum wage for work they performed;
- Misclassifying a worker as an independent contractor to avoid wage, tax, or workers’ compensation obligations; and
- Knowingly violating the law.
Next Steps for Employers
Employers should review their offboarding and compensation practices and procedures to ensure compliance with this updated final pay requirement. Employers should also review their pay practices and procedures to ensure that employees are compensated appropriately, classified correctly and that all applicable payroll taxes are being collected and reported.
