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Delaware Payroll And Workers' Compensation Rules

Delaware payroll professionals play an important role in workers' compensation administration. Payroll records provide critical wage and employee information used to administer workers' compensation claims, calculate benefits, support insurance audits, and document an employer's compliance with Delaware law.

Understanding Delaware workers' compensation rules is especially important for payroll professionals who are responsible for maintaining employee records, calculating wages, processing payroll after workplace injuries, responding to workers' compensation claims, or providing payroll information to an employer's insurance carrier or third-party administrator. Delaware generally requires employers with one or more employees working in the state to maintain workers' compensation coverage, subject to specific statutory exceptions and exclusions.

Delaware Payroll And Workers' Compensation Compliance Overview

At A Glance

• Delaware generally requires employers with one or more employees working in the state to maintain workers' compensation coverage
• Most employees working in Delaware are covered from their first day of employment
• Certain independent contractors and specific agricultural workers may be excluded from coverage
• Employers generally obtain workers' compensation insurance from an insurer approved to do business in Delaware
• Certain out-of-state employers may use an out-of-state policy with a written Delaware endorsement that specifically covers Delaware work
• Employers that qualify may become self-insured
• Delaware permits workers' compensation self-insurance groups subject to applicable requirements
• Employers must maintain records of workplace injuries
• Employers generally must file a First Report of Occupational Injury or Disease within 10 days after receiving knowledge of a work-related injury
• Employees generally must notify the employer of an injury within 90 days unless the employer has actual knowledge of the injury
• Payroll records can be used to establish an injured employee's average weekly wage
• Delaware workers' compensation benefits can include medical care, temporary disability, permanent impairment, and death benefits
• The Delaware Office of Workers' Compensation administers the state's workers' compensation system

Delaware Workers' Compensation Coverage Requirements

How Delaware Payroll And Workers' Compensation Work Together

Workers' compensation and payroll are closely connected. When an employee is injured at work, payroll may be asked to provide historical earnings, wages, hours worked, bonuses, employment dates, and post-injury earnings. Accurate payroll information can help the employer, insurer, or claims administrator establish the employee's applicable wage information and administer benefits correctly.

Payroll may also become involved when an injured employee misses work because of a workplace injury, returns to work with medical restrictions, works reduced hours, performs modified or light-duty work, receives wages after returning to work, or receives salary continuation. For these reasons, Delaware payroll departments should have a documented process for responding to workers' compensation claims and producing historical payroll information.

How Many Employees Trigger Workers' Compensation Coverage In Delaware?

Delaware generally requires employers with one or more employees working in the state to carry workers' compensation coverage. The Delaware Office of Workers' Compensation states that most employees working in Delaware are covered from their first day of employment.

Delaware law contains specific exclusions and exceptions, so employers should review the nature of their workforce and the type of work being performed when determining whether a particular individual is covered. Independent contractors and certain agricultural workers may fall outside the workers' compensation system under applicable requirements.

Are Part-Time Employees Covered?

Part-time status does not automatically eliminate an employer's workers' compensation obligations in Delaware. Employers should determine whether the individual meets the applicable definition of an employee and whether a specific statutory exclusion applies.

Are Independent Contractors Covered?

Independent contractors may be excluded from Delaware workers' compensation coverage when they meet the requirements applicable to that classification. Employers should carefully evaluate the actual working relationship rather than relying solely on the title or label assigned to a worker.

Misclassification can create workers' compensation, payroll, tax, and employment-law issues, so employers should obtain appropriate professional guidance when the classification of a worker is uncertain.

Delaware Workers' Compensation Insurance

Delaware employers generally comply with the workers' compensation requirement by purchasing a Delaware workers' compensation policy from an insurer approved to do business in Delaware. Certain out-of-state employers may use an out-of-state workers' compensation policy with a written endorsement that specifically includes Delaware coverage.

Employers that qualify may also become self-insured by demonstrating that they can pay all required workers' compensation benefits. Most Delaware employers obtain a traditional workers' compensation policy through a private insurance carrier rather than self-insuring.

Delaware Workers' Compensation Self-Insurance

Delaware permits qualified employers to self-insure their workers' compensation liabilities. Self-insurance requires state approval and the employer must demonstrate the financial ability to meet its workers' compensation obligations.

Delaware also provides for workers' compensation self-insurance groups. A self-insurance group must obtain a certificate of authority and meet applicable financial, security, membership, and administrative requirements.

Because self-insurance involves significant financial and administrative responsibilities, most small and midsize employers will obtain workers' compensation coverage through an insurance carrier rather than self-insuring.

Delaware Workers' Compensation Coverage For Multistate Employers

Employers with employees who work in multiple states should review Delaware workers' compensation requirements separately when employees perform work in Delaware. Delaware provides that certain out-of-state employers may satisfy the requirement through an out-of-state policy with a written endorsement specifically covering Delaware work.

Payroll should maintain accurate work-location information because an employee's state of employment can affect workers' compensation administration, insurance reporting, and payroll documentation.

Delaware Payroll Records And Workers' Compensation

Accurate payroll records are essential when a workers' compensation claim requires information about an employee's wages. Delaware disability benefits are generally based on the worker's average weekly wage, and Delaware guidance states that the calculation usually uses the 26 weeks before the injury.

Payroll departments should be prepared to provide information such as.

• Employee name and identification information
• Date of hire
• Date of injury
• Employment status
• Job title and classification
• Regular wages
• Gross earnings
• Hours worked
• Overtime
• Bonuses and other compensation
• Commissions
• Periods of unpaid leave
• Wage changes
• Pre-injury earnings
• Post-injury earnings
• Modified-duty wages
• Salary continuation payments
• Other compensation information relevant to the claim

Payroll should retain supporting documentation rather than relying solely on a current payroll register. Historical payroll reports, timekeeping records, earning-code information, wage changes, and other compensation records may become important when an injured worker's average weekly wage or other benefit information is reviewed.

Delaware Workers' Compensation Benefit Calculations

Delaware workers' compensation benefits are calculated under state law using applicable statutory formulas and wage information. The Delaware Office of Workers' Compensation states that disability benefits are based on the worker's average weekly wage, usually using the 26 weeks before the injury, with benefits generally calculated as a percentage of the average weekly wage subject to applicable state maximums.

Payroll professionals should provide accurate wage information to the employer's insurance carrier or claims administrator rather than attempting to independently determine the employee's final workers' compensation benefit.

Average Weekly Wage

Delaware uses an employee's average weekly wage when determining certain workers' compensation benefits. The applicable calculation can depend on how the employee is paid and the employee's earnings history. Delaware law provides specific methods for determining weekly wages for employees paid by the day or hour, by output, and under other compensation arrangements.

Payroll professionals should therefore preserve sufficient historical payroll information to support the applicable wage calculation. This can include regular wages, overtime, commissions, bonuses, and other compensation that may be relevant under Delaware law.

Temporary Total Disability Benefits

Delaware provides temporary disability benefits for qualifying workplace injuries that prevent an employee from working. Compensation generally begins after the statutory waiting period, although Delaware law provides circumstances under which compensation can be payable from the first day of injury.

Payroll should accurately track periods when the employee is unable to work, returns to work, works reduced hours, or performs modified duties so that the claims administrator has accurate information for benefit administration.

Temporary Partial Disability

Temporary partial disability benefits may apply when an injured employee returns to work but experiences reduced earning capacity because of the workplace injury. Payroll should accurately track post-injury wages and hours worked when an employee returns to work with restrictions.

Accurate post-injury wage information can help the claims administrator determine whether partial disability benefits are applicable and calculate the appropriate benefit amount.

Permanent Impairment Benefits

Delaware workers' compensation law provides benefits for qualifying permanent injuries and impairments. The applicable benefit depends on factors such as the nature and extent of the injury, medical findings, the applicable statutory provisions, and the employee's wage information where required.

Payroll professionals generally will not determine the medical impairment rating, but payroll records may still be relevant to the administration of the claim.

Death Benefits

Delaware workers' compensation law provides death benefits to qualifying dependents when a covered employee dies as a result of a compensable workplace injury or occupational disease. Funeral and related benefits may also be available under applicable law.

Payroll may be asked to provide employment, wage, and compensation information when a fatal workplace injury claim is administered.

Delaware Workers' Compensation Injury Reporting

Employees and employers have specific responsibilities when a workplace injury occurs. Delaware law generally requires an employee or someone acting on the employee's behalf to provide notice to the employer within 90 days after an accident unless the employer has actual knowledge of the injury.

Employers must keep a record of workplace injuries and generally must file a written report within 10 days after knowledge of an accident resulting in personal injury. The First Report of Occupational Injury or Disease must be provided to the Office of Workers' Compensation and the employer's insurance carrier, and Delaware guidance states that the report is required regardless of how minor the injury may appear.

Delaware First Report Of Occupational Injury Or Disease

The Delaware Office of Workers' Compensation requires employers to file a First Report of Occupational Injury or Disease within 10 days after receiving notice of a work-related injury. Employers should also notify their workers' compensation insurance carrier or third-party administrator promptly.

Delaware states that an employer may be fined for failing to file a required first report of injury. Payroll should therefore follow the employer's established reporting procedure and immediately communicate workplace injuries to HR, management, safety personnel, and the individuals responsible for workers' compensation reporting.

Employee Notice Of Injury

Under Delaware law, an employee generally must notify the employer of an injury within 90 days after the accident unless the employer has actual knowledge of the occurrence. The law also contains provisions concerning occupational disease, for which different notice requirements can apply.

Employees should be encouraged to report workplace injuries as soon as possible rather than waiting until the statutory deadline. Prompt reporting helps employers arrange medical treatment, notify the insurance carrier, document the incident, and begin the claims process.

Delaware Workers' Compensation And Modified Duty

An injured employee may return to work with restrictions or modified duties. When that happens, payroll should coordinate with HR, management, the employee's supervisor, and the workers' compensation administrator.

Payroll should document.

• The date the employee returned to work
• Hours worked
• Wages earned
• Changes in job duties
• Modified or light-duty assignments
• Changes in compensation
• Salary continuation
• Periods of absence
• Other payments related to the employee's workers' compensation status

Accurate post-injury wage information can be particularly important when determining whether an employee has experienced a reduction in earning capacity and whether temporary partial disability benefits apply.

Delaware Workers' Compensation And Payroll Taxes

Workers' compensation benefits should not automatically be processed in the same manner as ordinary wages. Payroll should identify the nature of each payment and coordinate with the employer's tax, HR, insurance, and workers' compensation professionals to determine the appropriate payroll and tax treatment.

Employers should maintain clear records distinguishing.

• Regular wages
• Workers' compensation payments
• Salary continuation
• Modified-duty wages
• Paid time off
• Other payments associated with an injury or workers' compensation claim

Delaware Workers' Compensation And Employee Classifications

Employee classification is an important component of workers' compensation administration. Payroll should maintain accurate information about job titles, departments, work locations, job duties, employee status, compensation, and changes in duties or work assignments.

When an employee's duties change substantially, payroll and HR should communicate the change to the appropriate workers' compensation or insurance personnel. Accurate classification information can help support insurance administration, audits, claims management, and payroll reporting.

Delaware Workers' Compensation Employer Requirements

Delaware employers should maintain evidence of workers' compensation coverage and ensure that employees understand how workplace injuries are reported. Employers should also maintain accurate information identifying their workers' compensation insurance carrier or third-party administrator.

Delaware employers are required to notify injured employees of their rights under the workers' compensation law. Payroll and HR departments should coordinate with management to ensure that workers' compensation information and required notices are readily available when an employee reports a workplace injury.

Payroll Training Resources

Payroll professionals responsible for workers' compensation administration should understand how workers' compensation rules interact with payroll records, wage calculations, employee classifications, injury reporting, benefits, and payroll processing. Payroll Training Center provides payroll education and training for professionals responsible for payroll compliance, wage administration, employee records, and related employment requirements.

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