Bill banning the keeping of last paychecks is approved by the Senate

Delaware Legislative Hall. | DBT PHOTO BY JACOB OWENS

DOVER — The Delaware State Senate has approved a bill that seeks to close a loophole in Delaware’s labor laws and clarify when final paychecks will be paid, despite some reservations from labor circles. affairs of state.

Senate Bill 208 was revised after two months of conversations with state chambers and trade associations, as well as an education campaign by the Delaware Department of Labor. The vote was 20-0 with little discussion and Senate Minority Leader Gerald Hocker (R-Millsboro/Bethany Beach) abstained from voting.

SB208, sponsored by State Sen. Jack Walsh (D-Christiana/Newark) on behalf of the Labor Department, clarifies state law that an employee’s final paycheck must be issued or mailed by the post on the next pay cycle or within three business days, whichever is later . If the employer fails to do so, the employer is liable for the amount of unpaid wages or 10% of unpaid wages for each day the paycheck is not issued, whichever is lower.

The Labor Department reports that about 20% of its complaints are about employers who withhold a final paycheck.

The bill was withdrawn from the Senate Labor Committee in late January amid widespread concerns from four Delaware chambers of commerce as well as two contractor associations, including the removal of the “no reasonable cause to dispute” in state law. .

Walsh told the Delaware Business Times in an interview earlier this month that a Delaware judge recently ruled in an unpaid wages dispute in favor of the employer because of this clause, although the same laws prohibit to do. He saw SB208 as a way to solve a Catch-22.

“That’s why we have to clean it up,” Walsh said. “We had to table an amendment that spells it out word for word. The regulations exist, and this was a case where the legislation had to follow these regulations.

But representatives and lobbyists of the Delaware State Chamber of Commerce, New Castle County Chamber of Commerce, Central Delaware Chamber of Commerce and the Rehoboth Beach-Dewey Beach Chamber of Commerce disagreed with this view. At the January 27 hearing, they all raised concerns about an employer’s recourse if an employee withholds property.

“We talk, frankly, if an employee has material or equipment. Their only recourse would be to talk about theft,” said Scott Kidner of CS Kidner Associates, representing the CDCC. “How do you prove that when you go see the employee with whom you have no other strings and pay him his last salary? And if it is sensitive equipment, that is to say their access codes and their data? »

“If the appropriate recourse is to call the police on the theft charge, is that the right policy for resolving these relatively simple disputes?” asked Lincoln Willis, of the Willis Group, on behalf of the Rehoboth-Dewey Chamber.

Delaware Associate Builders and Contractors Chairman Ed Capodanno has spoken of removing any other recourse for employers to recover expensive equipment.

“Our industry is a transitory problem with workers moving from site to site. They are given a lot of company assets in terms of laptops, iPads, company tools,” he said at the January hearing. “While I agree that the employer has a responsibility to pay an employee for the hours worked, we also believe that the employee has a responsibility to return company property if they decide to leave the company before being paid for his salary.”

Walsh then revised and reintroduced the bill on March 31. The measure retains the “reasonable grounds” clause, but also cites previous laws that required an employer to pay all wages when due, and the employee still has the right to file a claim to recover losses. wages.

The amendment also cites state law in instances where withholding of a paycheck may be appropriate: for a cash advance or “the value of goods and services” under a written agreement. Withholding wages for damaged or unreturned goods is always illegal.

The New Castle County Chamber of Commerce still opposes SB 208, as its lobbyist Joe Fitzgerald noted that its members argue it would narrow the grounds for litigation rather than clarify it.

“One of the House’s concerns is that if an employee withholds or fails to return employer property, employers will have little recourse except to file a complaint,” Fitzgerald noted. this week to members of the chamber.

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