Delaware’s minimum wage laws influence the earnings of many workers across the state. Understanding how Delaware establishes and enforces its wage standards is helpful for both employees and employers.
This article outlines Delaware’s minimum wage system, covering its application, the role of tips in wages, and the consequences for businesses that do not comply with these regulations.
Legal Rate
Delaware’s minimum wage is established by state legislation. The legal pay rate has undergone scheduled increases to adjust baseline earnings for workers.
Effective January 1, 2024, the minimum wage in Delaware is $13.25 per hour.1Delaware Department of Labor. Delaware Minimum Wage Information This rate is part of a phased increase plan resulting from Senate Bill 15. The minimum wage was $11.75 in 2023 and is scheduled to reach $15.00 per hour on January 1, 2025.2Delaware General Assembly. Senate Bill 15 – Minimum Wage Increase Schedule
Coverage and Exemptions
Delaware’s minimum wage law applies to most employers but does not cover every worker in the state. Specific categories of workers are excluded.3Justia. 19 Delaware Code § 902 – Minimum Wage Rate and Exemptions
Exempted workers include:
- Individuals employed in agriculture.
- Those in domestic service in or about a private home.
- Employees of the United States government.
- Individuals in bona fide executive, administrative, or professional roles (often aligning with federal “white-collar” exemptions).
- Outside commission-paid salespeople not subject to strict employer hour controls.
- Individuals performing services gratuitously for certain non-profit, educational, or religious organizations where a formal employer-employee relationship does not exist.
- Inmates participating in programs managed by the Department of Correction.
Understanding these exclusions helps ensure compliance with Delaware’s wage regulations.
Tip Credit Regulations
Delaware law allows employers of workers who regularly receive tips to use a tip credit. This means employers can count a portion of an employee’s tips towards meeting the state’s minimum wage. The direct cash wage paid by the employer can be less than the full minimum wage, as long as the employee’s tips, when added to the direct cash wage, meet or exceed the state minimum.
The direct cash wage paid to a tipped employee must be at least $2.23 per hour.4U.S. Department of Labor. State Minimum Wages for Tipped Employees If an employee’s tips combined with this direct cash wage do not meet the full state minimum wage, the employer must make up the difference, ensuring tipped employees receive the prevailing minimum wage for all hours worked.
Employers using the tip credit must inform employees about these provisions. This includes notifying them of the direct cash wage they will receive, the amount of tip credit claimed, and that all tips received are to be retained by the employee (except under a valid tip pooling arrangement). The employer is responsible for demonstrating that tipped employees have received at least the minimum wage.
Enforcement and Penalties
The Delaware Department of Labor, through its Office of Labor Law Enforcement, is the primary agency upholding the state’s wage standards.5Delaware Department of Labor. Delaware Office of Wage & Hour This office investigates employee complaints about unpaid wages. During an investigation, the Department can examine payroll records and other documents, and interview employees and employers to determine if a violation has occurred.
If an investigation finds an employer has failed to meet minimum wage obligations, the Department of Labor can act to recover unpaid wages. Delaware law allows an employee who successfully claims unpaid wages to recover the unpaid amount plus an equal amount as liquidated damages.6Justia. 19 Delaware Code § 1113 – Remedies of Employees for Unpaid Wages The employer must also pay the employee’s reasonable attorney’s fees and court costs. There is a one-year statute of limitations for an employee to file such a civil action.
The state can also impose direct civil penalties. An employer failing to pay wages as required, including the minimum wage, or failing to pay wages timely, may face a civil penalty of $1,000 to $5,000 for each violation.7Justia. 19 Delaware Code § 910 – Penalties for Minimum Wage Violations Each underpaid employee constitutes a separate violation, potentially leading to significant penalties.
For more serious or repeated non-compliance, consequences can include criminal charges. An employer who willfully fails to pay wages can be found guilty of a class B misdemeanor for a first offense.8Justia. 19 Delaware Code § 1104 – Criminal Penalties for Wage Payment Violations A subsequent conviction elevates the charge to a class A misdemeanor. Employees also retain the right to pursue unpaid wage claims through private legal action in court.