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this month in dover

1/27/2022

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By Tyler Micik

The General Assembly returned to session this month in a virtual format and a number of bills were introduced that are noteworthy for employers.
 
First, SS1 for SB1, the Healthy Delaware Families Act creates a statewide paid family and medical leave insurance program. This latest version has undergone substantial revisions from the original bill that was introduced last year. Employers with 25 or more employees are required to provide up to 12 weeks of paid parental leave and up to 6 weeks paid medical and family caregiving leave. Employers with 10 or more employees but less than 25 are only required to provide up to 12 weeks of paid parental leave. Under current law, small businesses, those with 50 or fewer employees, are exempt from the 1993 Federal FMLA law.

The bill was released from the Senate Health and Social Services Committee yesterday and awaits a full vote in the Senate. You can view a full copy of the legislation here and a short summary here.

We continue to work closely with the bill sponsor, our Employer Advocacy Committee, and our members to ensure this proposal is a win for both employers and employees. On February 16, we are co-hosting a webinar with DelMarVa SHRM as an opportunity for businesses to learn more about this proposal. It is free to attend, but we ask that you register in advance here.

"I'd like to thank the State Chamber for their efforts in working with the sponsor of the bill
​on behalf of Delaware businesses." - Kurt Schrock, Mountaire Farms
 Other bills that saw movement:
  • HB262: The Data Brokers and Consumer Protection bill seeks to provide consumers with critical information about how their personal information is being used by data brokers. It requires data brokers to register with the Consumer Protection Unit of the Department of Justice and answer questions regarding their use of personal information that would be published online to inform consumers. State Chamber members expressed concern regarding the bill's definition of "data broker" so we worked with the sponsor to clarify the definition and make it clear that the bill would only apply to data sellers and not collectors as was the sponsor's intent. You can view the amendment here. It also contains a private right of action, which is a concern and we appreciate the sponsor's willingness to address and listen to our concerns. The bill was released from House Technology & Telecommunications Committee on Tuesday and moves to the House for a full vote.
  • HB305: The Delaware Marijuana Control Act regulates and taxes marijuana in the same manner as alcohol. It allows adults over the age of 21 to legally possess and consume under one ounce of marijuana for personal use. It does not permit people to grow their own marijuana. This bill is the updated version of HB150, which was introduced last year. It is similar except for a few changes including the section on places of employment which was removed from the bill. The bill was released from House Health and Human Development Committee yesterday and moves to the House for a full vote.
  • SB208: This act clarifies that an employer is liable to an employee for liquidated damages if the employer does not make wages available on the next payday after an employee quits, resigns, is discharged, suspended, or laid off. The bill was released from the Senate Labor Committee yesterday and awaits a full vote in the Senate.
  • HB257: This act modifies the existing fees and supporting fee structure for air quality natural minor permits issued by the Department of Natural Resources and Environmental Control. It creates a new subsection establishing fees associated with the natural minor permit program. The existing fees were established in a 1991 bill, but not codified. The fees have not been adjusted in nearly three decades and as a result, the program is not self-sustaining. This act will allow for a phased approach to increase these fees, with the first increase intended to result in funding 50% of the program costs. Evaluations will occur before July 1 of 2024 and July 1 of 2027 with recommended adjustments to fund 75% and 100% of the program costs respectively. It also requires subsequent evaluations, to occur every three years, to ensure the fees are completely funding the program. Sources subject to fees pursuant to Subchapter VIII of this Chapter, who are not delinquent, are exempt from natural minor permit fees. This proposal was introduced last year and the State Chambers Environmental Committee submitted a letter to DNREC last year requesting that any increase be delayed until 2022 due to the COVID-19 pandemic and we thank the department for taking our concern into consideration. The bill was released from the House Natural Resources Committee and moves to the House for a full vote.
 
Bills that were introduced but did not see movement:
  • HB 288: This act requires private and public employers in the state to give any employee who is scheduled to work at least eight hours on an election day two hours of paid leave in order for the employee to exercise the right to vote. The bill excludes individuals engaged in activities for education, charitable, religious, or nonprofit organizations when the employment relationship does not exist or where services are rendered to such organizations gratuitously; employees who are party to a collective bargaining agreement in which paid time off to vote has been waived. Employees must give employers two working days’ notice in advance of an election that the employee intends to use paid time off to vote. Employers must post notice of the rights created in the Act. Enforcement of the Act is through the Department of Labor. Employers who violate this are subject to civil penalties ranging from $500-$1,000 and from $1,000-$5,000 if found to have retaliated against an employee for exercising the rights created by this act.
  • SB 209: In 2016, Title 2, Chapter 19 was enacted to address the growing use of ride share applications also known as a Transportation Network Companies (“TNC”), which transport passengers for compensation. In 2016, the General Assembly acknowledged the importance of protecting TNC passengers as well as other drivers on Delaware roads by requiring that a TNC possess $1,000,000.00 in death, bodily injury and property damage insurance coverage when transporting passengers. Because many Delaware citizens do not use a TNC for transportation but use other forms of transportation, such as buses, taxicabs or limousines, this act increases the death, bodily injury and property damage insurance coverage required for the Delaware Transportation Authority (i.e. DART buses) and public carriers as defined by Chapter 18, Title 2 to that which is already required by a TNC. The act also requires that public carriers, TNCs and Delaware Transportation Authority possess uninsured and underinsured insurance coverage to protect their passengers. The act will take effect on July 1, 2022. The bill was introduced and heard in the Senate Banking, Business, & Insurance Committee but not released from committee. The sponsor said he does not intend to run the bill in January.
 
The Chamber is looking for feedback from members on how any of these proposals may impact your company or employees. Please direct feedback to me at [email protected].
 
The General Assembly is in recess through the month of February for Joint Finance Committee meetings.
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DSCC Spring Economic Survey Results

5/9/2018

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As part of our Spring 2018 survey, we asked participants to list their top three policy concerns. We posed a similar question in our Fall survey with comparable results. Last survey, 50% of our survey respondents said that the Cost of Health Care was their #2 policy priority. We heard you loud and clear and are addressing this issue by working with partner organizations and stakeholders around the state.
 
With that question out of the mix in our current survey, members are telling us that Economic Development remains the #1 policy concern. That is followed education/work force development and permitting delays/regulatory issues. 
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​DSCC Spring Economic Survey Results

5/3/2018

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by Mark DiMaio

Over 230 State Chamber members took our 10-question survey on Delaware’s economic health and key policy issues. The survey is an important tool in taking the pulse of our membership’s view of the national and local economy as well as level setting their policy priorities. 
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Delaware Division of Revenue Electronic Filing Project Goal

11/7/2017

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The State of Delaware Division of Revenue is looking to engage taxpayers and tax accountants in an effort to help review the state’s electronic filing options, presentation of these options, and overall ease of access to the systems. The state will be conducting a survey incorporating opinion questions geared at addressing these issues. In addition, the state would like to conduct a focus group with a select number of constituents to further explore the user experience when it comes to the state’s electronic options.

Ideally, the state would like to engage self-preparers and self-filers as they would be the most likely group to utilize all of the state’s first party filing options. The background of these self-preparers/filers does not necessarily need to be limited to any specific subgroup; we are more or less looking for a wide variety of people from diverse business backgrounds.

The focus of this exercise will be to review the state’s License Renewal, Online ACH Debit Payment System for Corporate Tentative Tax/Withholding Tax, and Online Gross Receipts Tax System.
Click here to access the survey
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Delaware Loses Top Spot in Legal Climate Survey

9/13/2017

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by James DeChene

Since 2002 Delaware had been ranked #1 in The Institute for Legal Reform’s Harris Poll Lawsuit Climate Survey. This year’s survey finds Delaware dropping to #11.

According to the report, “Participants in the survey were comprised of a national sample of 1,321 in-house general counsel, senior litigators or attorneys, and other senior executives at companies with at least $100 million in annual revenue who indicated they: (1) are knowledgeable about litigation matters; and (2) have firsthand, recent litigation experience in each state they evaluate.”

While Delaware still scores high in key element categories of scientific and technical evidence, trial judges' competence, quality of appellate review, and enforcing meaningful venue requirements, it fell significantly in Treatment of Class Action Suits and Mass Consolidation Suits (from #1 to #26) and Trial Judges’ Impartiality (down to #15).

When I asked about specifics that were factors in Delaware’s drop, I was given a handful of recent court decisions and specific pieces of legislation passed by the General Assembly. From my perspective, no one decision or bill by itself precipitated the drop, instead the reasons for the decline seem to be a shift away from supporting what made Delaware a top corporate legal environment for so long. In fact, even though Delaware scored #1 in 2015, I was given warnings then about a potential slide in rankings if Delaware continued to focus on legislation and issued court decisions that were increasingly plaintiff friendly.

I’ve written about these issues before, and seemingly often, which include Delaware’s approach to abandoned property, the fee shifting debate that took place a few years ago resulting in the passage of SB75 that reversed the “loser pays” model of litigation, and the ATP Tours, Inc. v. Deutscher Tennis Bund decision that precipitated SB75.

In fact, over the last few years, Delaware’s cache has dropped when reviewed by other organizations as well. For example:
  • Forbes ranked Delaware 22nd among the states in 2016. The ranking lauded the state’s positive economic outlook, as shown by its increase in jobs and its business-friendly corporate law. Forbes’ cited Delaware’s low business costs and strong labor supply among its most positive factors, but gave Delaware poor marks for its quality of life, regulatory environment, and economic climate. This year marks a continued fall on the Forbes rankings from 11th in 2014 and 17th in 2015.
  • Delaware also fell in CNBC’s “America’s Top States for Business” rankings. Delaware ranked 40th in 2017, its lowest score in recent years. It placed 37th in 2016, 38th in 2015, and 38th in 2014. Once viewed by CNBC as first in the nation for its business friendliness, Delaware came in 22nd in that category. The state’s greatest challenges are its high cost of living, education system, high cost of doing business, and lack of infrastructure. Its greatest drops from 2016, however, were in the areas of its economy (26th to 39th), quality of life (28th to 37th) and business friendliness (11th to 22nd).
  • Chief Executive’s annual survey of CEO’s ranked Delaware 16th in 2017, a slight drop from the prior year. CEOs praised Delaware for public-private partnerships and new science-based businesses. Delaware placed 23rd in 2014, 20th in 2015, and 13th in 2016.
  • Delaware’s business tax climate ranks 19th among states in 2017, according to the Tax Foundation. This is a 5-point fall from 14th place in 2016 and its lowest score in recent years.
  • U.S. News & World Report’s 2017 “Best States” report ranked Delaware’s economy 9th, including 7th for business environment, 8th for growth, and 18th for employment. The state’s overall rank was 20th. This year is the first time U.S. News has ranked states.

The fact remains that the constant drip of decisions and legislation designed to support plaintiffs over business has led directly to where Delaware is today: a world where South Dakota is ranked as having the top business legal climate, and where Delaware is on the decline according to recent national ratings. 
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One thing remains constant, however. If Delaware continues its current trend, our image will continue to suffer. Delaware relies on the billion dollars in revenue it receives each year from companies choosing to incorporate here. We should be doing what it takes to retain our corporate image if there is to be any realistic expectation of that being the case in the future.
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More Manufacturing Jobs, Lower Medicaid Enrollment

3/30/2017

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by Mark DiMaio

Delaware’s Medicaid enrollment continues to rise. Since 1999, Medicaid enrollment has grown from just under 100,000 to over 230,000. The growth has put a tremendous strain on Delaware’s budget. To combat Medicaid’s growth, it’s imperative that new jobs are created in Delaware. While some job sectors have grown, or at least stabilized, over the last 15 years, Delaware’s manufacturing sector has decreased by 12,000 jobs to 28,000. The decline mirrors much of what has taken place nationally, but over the past six years, Delaware’s manufacturing sector decline has slightly outpaced the national trend. Manufacturing employment can create not only well-paying jobs, but drive employment in the job sectors that service those businesses. Taking steps, like modernizing the Coastal Zone Act (CZA) could attract new business and jobs to Delaware. The State Chamber is working with stakeholders to modernize the CZA and enhance Delaware’s manufacturing climate.

Medicaid spending isn’t the only state expenditure growing at a significant clip. In former Governor Markell’s final State of the State address, he points out that the current spending on state employee health care isn't sustainable. According to Governor Markell, Delaware’s cost estimates, with no increase in state or employee retiree contributions, would result in the state facing a deficit of $484 million by 2022. The continued growth in Medicaid spending, combined with a steep increase in employee health care costs, presents Delaware with a substantial problem. More jobs, especially manufacturing jobs, should help decrease the state’s Medicaid population. Bending the cost curve for state employee health care expenditures will require more than negotiations with service provides. Some measure of additional state employee contributions needs to be considered. An increased share of employee health care contributions is already a reality for most Delawareans.
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Release of America’s Health Rankings

12/15/2016

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by James DeChene

Earlier today (December 15, 2016) United Health Foundation released the 27th America’s Health Rankings Annual Report. As the longest-running annual assessment of the nation’s health on a state-by-state basis, the report showcases positive trends in the health of the nation, as well as concerning upticks in several key indicators.

Among the report’s findings:
  • The report found a continued high prevalence of obesity in the U.S. population. Obesity impacts nearly 3 out of 10 U.S. adults across the country. In Delaware, obesity impacts 29.7 percent of adults.
  • The report also found the rate of drug deaths nationwide has increased 4 percent in the past year, for a nationwide average of 14 deaths per 100,000 population. In Delaware, the rate is 18.1 deaths per 100,000 population.

Also of note, is that Delaware ranks 47th in the number of dentists per capita and 17th in the number of primary care physicians. Recently the debate over DIMER/DIDER funding has reemerged as an important budget issue for the state. DIMER/DIDER reserve slots for Delaware applicants only at Sidney Kimmel Medical College, Philadelphia College of Osteopathic Medicine, and the Maurice H. Kornberg School of Dentistry at Temple. Delaware applicants only compete against other Delaware applicants for admission to reserve slots – not against the universe of applicants. For example, at SKMC, Delawareans have a 1 in 4 chance of being admitted to their reserved slots. The odds for applicants from any other state being admitted are approximately 1 in 40.

Please refer to the America’s Health Rankings website for additional information.

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REMINDER OF NEW PRIVACY POLICY STATEMENT REQUIREMENT TO START MARCH 14, 2016

2/10/2016

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​by James DeChene

In legislation passed last year by the General Assembly, companies conducting business in Delaware via a website will be required to post a privacy policy alerting their customers to the types of data their website may collect, and what the company may do with that data, such as using it for marketing, or storing it for later use (think a credit card number saved on a pizza shop website).

During the legislative process, the Chamber worked closely with the Attorney General and members of the General Assembly to pass legislation that would seek to provide the consumer protection the AG wanted, but not cause businesses significant hardship, financial or otherwise, to implement. Currently, comment period for the regulation drafting process has been closed, as of February 1st. The Attorney General’s Consumer Protection Unit has been working with the State Chamber to not only come up with a regulation that is easy to read, but CPU has also pledged to provide free of charge examples of privacy policy statements on their website so that businesses can copy and paste language that will cover them directly onto their website.
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As those examples are released, the Chamber will provide our membership, through this space, a reminder alert as well as a link to the text.
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Background on Data Destruction Law

7/29/2015

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By James DeChene

As previously reported in 2014, the General Assembly passed a bill (HB 295) that created new rules for businesses for how they handle consumer’s personal data (name, social security number, address, credit card info, etc.). Stemming from a news report out of Philadelphia of an identity theft conducted with documentation found in a trash can outside of a business, this bill directed all businesses in Delaware to properly erase or destroy any and all data that falls under this category.

The State Chamber worked with the bill sponsor, Rep. Stephanie Bolden, to ease the onus placed on businesses including language involving “reasonable steps” to destroy the data, and also sets the standard for bringing a lawsuit as requiring a “reckless or intentional” violation by the business. Going further in the 148th Session, another bill was introduced (HB 18) that clarified that these provisions only affect those companies that do business in Delaware, not all businesses either registered only here, or those that conduct business with Delawareans, such as a wood carver from Vermont selling to a Delaware resident.

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