If you have employees in more than one state, the Delaware employee separation process may vary significantly from other jurisdictions.
This employee separation checklist and guide provides an overview of Delaware’s final paycheck requirements, separation notices, and severance agreements. It also includes reporting employee termination and withdrawing registration to do business in the state, when necessary.
Delaware Employee Separation Checklist
- Provide final paycheck
- Issue separation notice
- Execute severance agreement
- Report termination
- Withdraw registration to do business
1. Final Paycheck Requirements in Delaware
Under Delaware employee termination laws, employees who separate from their employer must be paid according to specific timelines. Terminated employees must receive their final paycheck the next scheduled payday or three business days after their last day of work, whichever is later. The same timeline applies to employees who resign.
Employers are not required to pay out accrued and unused vacation time, unless the employee’s contract or company policy provides for it. Final wages must be delivered through regular payment channels, or by mail, if requested by the employee. Employers who fail to pay wages on time may face penalties, including 10 percent of the unpaid wages for each business day the payment is delayed, continuing until the amount paid equals the total unpaid wages.
2. Firing Employees in Delaware
Because Delaware is an at-will employment state, firing employees is permissible for any reason as long as it is not illegal. However, Delaware law mandates that all employers provide a copy of Delaware’s Form UC-300 (Employer Notification to Employees of the Availability of Unemployment Compensation) to employees at the time of separation (DE Lab. Code § 19-3317). This form is not available online and must be obtained directly from the Delaware Division of Unemployment Insurance.
If an employer provides group health insurance and has fewer than 20 employees, they must notify separated employees of their right to continue health insurance coverage under Delaware’s state-level COBRA law within 30 days of separation. It’s advisable to attach these notices to the Separation Agreement for compliance.
Delaware’s WARN Act requires specific employers to provide 60 days’ notice before any mass layoff, plant closing, or relocation. The law applies to private businesses with at least 100 employees or those whose employees work a combined total of 2,000 hours per week. Affected employees must be notified if they are reasonably expected to experience job loss due to these events. “Mass layoffs” are defined as reductions affecting scope affecting 50 or more employees, provided they comprise 33 percent or more of the workforce, or any event affecting 500 or more employees. Plant closings must impact at least 50 full-time employees. Relocations are defined as moving operations 50 miles or more away.
The Delaware WARN Act outlines exceptions where the 60-day notice requirement may be reduced, including cases of faltering companies, unforeseeable business circumstances, and natural disasters. Notice must be provided to affected employees, their representatives, the Delaware Department of Labor’s Division of Employment and Training, and the Delaware Workforce at the federal level. Employers must adhere to both federal and state-specific requirements when issuing these notices.
3. Severance Agreements in Delaware
Employers should clearly specify the federal and state claims being waived when executing claims releases. In Delaware, this includes claims under the state’s minimum wage and overtime laws, the Delaware Discrimination in Employment Act, and the Handicapped Persons Employment Protections Act. Ensure that the release of claims only covers issues that arose before the agreement’s effective date, excluding those that may arise afterward.
Employers must take care to ensure compliance with relevant federal regulations, too. For example, recent decisions and guidance from the NLRB limit the use of non-disparagement and confidentiality clauses in severance agreements.
4. Reporting Employee Termination in Delaware
If an employee has an Income Withholding for Support Order (IWO), you must promptly report their termination to the issuing child support agency, court, or attorney. To expedite this, you can register for online reporting with the Federal Office of Child Support Enforcement.
Alternatively, you can report the termination by completing the Notification of Employment Termination or Income Status section of the IWO and sending it via fax or mail to the child support agency that issued the order.
Include the following information:
- Employee Name
- Employee Case Identifier
- Last Known Home Address
- New Employer Address (if known)
- Date of Employee Separation
5. Withdraw Registration to do Business in Delaware
If your organization has stopped doing business in Delaware (such as by separating from the last in-state employee), you can formally withdraw its registration to do business in the state. The form an organization needs to submit to the Secretary of State varies, depending on the legal structure.
For-Profit Corporations and Nonprofit Corporations must file this Certificate of Withdrawal, and submit any unpaid taxes along with the Certificate. Limited Liability Companies (LLCs) must file this Certificate of Cancellation, and submit any unpaid taxes along with the Certificate.
Stay Compliant with Delaware Employee Separation Requirements
It’s important to stay up to date with Delaware Employee Separation Agreement requirements. It ensures you’re compliant with employee obligations while respecting employee rights.
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Looking for employee separation laws for a different state? Our interactive map makes it easy to find all employee termination requirements by state.
