Delaware Overtime Laws

January 14th 2024

Delaware Labor Laws encompass various important aspects, including overtime regulations that aim to ensure fair treatment for employees in the state. Under these laws, non-exempt employees are entitled to receive overtime pay at a rate of one and a half times their regular hourly rate for hours worked beyond 40 in a workweek. Compliance with Delaware overtime laws is crucial for both employers and employees to avoid legal disputes and guarantee proper compensation. 

This article will provide information to successfully navigate Delaware’s overtime regulations, whether you’re an employer aiming for compliance or an employee defending your rights.

This article covers:

Delaware Overtime Rates

Overtime law in Delaware is designed to prevent employees from being exploited by their employers. Employees who work over 40 hours per week are entitled to overtime pay at time-and-a-half (1.5) for every additional hour worked. 

Since the regular minimum wage in Delaware is $13.25 per hour, this means Delaware’s overtime minimum rate is $19.88 per hour. 

Overtime Entitlement in Delaware

Delaware does not have its own specific overtime laws. Instead, it follows the federal overtime law established by the Fair Labor Standards Act (FLSA). This means that the rules and regulations regarding overtime pay in Delaware are based on the guidelines outlined in the FLSA.

Hourly employees who earn below $684 a week ($35,568 annually) and work in a non-exempt industry are entitled to overtime pay.

However, your overall eligibility for overtime pay will be based on what your job duties are as well as what type of business you are in.

Read more about overtime exceptions and exemptions in Delaware.

Compensatory Time in Delaware

Compensatory time off, “comp time”, applies to all state employees in Delaware only. This excludes collective bargaining employees who have negotiated comp time in their employment agreements, as well as school district employees and higher education employees. Comp time is when employees are given time off from work instead of overtime pay.

Comp Time Earned By Non-Exempt Employees

Non-exempt employees refer to employees who are eligible for overtime under the Fair Labor Standards Act (FLSA). There are different scenarios in which comp time can be earned by non-exempt employees:

  • For non-exempt employees with a standard workweek of 37.5 hours: Overtime is earned at a straight-time rate for hours worked between 37.5 and 40 hours in a workweek.
  • For non-exempt employees with a standard workweek of either 37.5 or 40 hours: Overtime is earned at a time and a half (1.5) for hours worked over 40 in a workweek.

In addition to these scenarios, comp time can also be earned by essential employees during Severe Weather Conditions and Emergencies. The time off earned by these employees, without exception, is compensated at a straight-time rate and can only be earned for hours worked during their regular scheduled work hours or shifts that fall within the specified hours of closing. Furthermore, non-exempt employees may earn comp time for additional hours worked beyond their routine compensation during a week that includes a State holiday.

It’s important to note that FLSA-covered/non-exempt positions are not eligible for alternative work schedules that exceed 40 hours in a given week.

Merit Comp Time Earned By Exempt Employees

Merit Comp Time refers to the time off earned by exempt employees, who are employees that are not eligible for overtime under the FLSA. This earned time must be used within 180 calendar days from the date it was accumulated; otherwise, it will be forfeited. Merit Comp Time can be earned under the following circumstances:

  • Preapproved additional time worked by exempt employees that exceed half an hour over the standard workday.
  • Hours worked beyond 75 or 80 hours in a standard pay period at the regular hourly rate. 
  • Essential employees who work during Severe Weather Conditions and Emergencies earn equal time off, which is granted at the regular straight-time rate. This equal time off can only be earned for the hours worked during the employee’s scheduled work hours or shift that fall within the specified hours of closure.
  • Preapproved additional hours worked beyond the employee’s regular compensated hours during a week that includes a State holiday.

Overtime Compensation for Holiday Workers in Delaware

Holiday workers who are eligible for holiday pay and overtime compensation will be paid at a rate of 1.5 times their regular pay for the hours worked on the holiday. They will also receive holiday pay based on a proportionate calculation. 

Workers who are eligible for holiday pay but are not normally eligible for overtime pay will be credited with holiday pay on a proportionate basis. The hours worked on the holiday will be compensated at their regular pay rate unless otherwise approved by the DHR Secretary. 

Any additional hours worked as a result of working the holiday may be compensated in cash or with time off, or a combination of both, as determined by the agency.

Overtime for Tipped Employees in Delaware

A “tipped employee” in Delaware refers to an employee who typically receives over $30 in tips per month as part of their regular job responsibilities. In Delaware, if tipped employees work beyond a certain number of hours in a week, they are eligible for overtime compensation. The overtime pay is determined as 1.5 times the regular hourly wage for each additional hour worked beyond the specified limit.

It’s important to note that tipped employees in Delaware are subject to a lower minimum wage than non-tipped employees. While the regular state minimum wage may apply to most workers, tipped employees have a lower minimum wage set at $2.23 per hour.

There is a concept called a “tip credit” that affects how tipped employees are paid. In Delaware, a tip credit allows employers to pay tipped employees a lower cash wage of $2.23 per hour, as long as the employee’s total earnings from tips and wages reach or exceed the minimum wage of $13.25. In this case, employers have a tip credit of $11.02 for tipped employees.

It is essential to understand that employers cannot include tip credit when calculating overtime pay for tipped employees. Instead, they must use the full minimum wage rate of $13.25 for tipped employees to determine the overtime pay rate.

Overtime Exceptions and Exemptions in Delaware

In Delaware, the regulations regarding overtime exceptions and exemptions follow the guidelines set by the Fair Labor Standards Act (FLSA). According to the FLSA, most employees who are covered by the law should receive overtime pay. However, employees in executive, administrative, and professional positions are exempt from these overtime pay requirements. This means that they are not entitled to receive overtime pay for working additional hours beyond the 40-hour limit.

To be eligible for the overtime exemption, employees must satisfy specific job duty criteria and be compensated on a “salary basis.” Being paid on a “salary basis” means that employees receive a fixed amount of pay that cannot be reduced based on the quality or quantity of their work. With a few exceptions, exempt employees should receive their full salary for any week they work, regardless of the number of days or hours worked. 

However, deductions from pay may be allowed for exempt employees who:

  • Are absent from work for personal reasons unrelated to sickness or disability.
  • Are absent from work due to sickness or disability, and the deduction is part of a plan or policy that compensates for lost salary during illness.
  • Receive payment for jury duty or military service.
  • Are penalized for significant safety rule violations.
  • Are suspended without pay for one or more full days for violating workplace rules.

Statute of Limitations For Unpaid Overtime Claims in Delaware

In Delaware, the statute of limitations governs the period within which employees can seek unpaid overtime wages. Normally, employees have a window of two years from the date of the violation to file a complaint and pursue back wages for overtime. This implies that if an employee were to initiate legal proceedings today, they can only seek compensation for violations that have taken place within the past two years.

Nevertheless, there are situations where the statute of limitations can be extended to three years. This extension is applicable when an employer has knowingly or deliberately violated overtime regulations.

Legal Cases Relating to Overtime Compensation in Delaware

Below, we present law cases relating to fair overtime compensation for employees in Delaware: 

1. Employee’s Misclassification and Unpaid Overtime Claims Were Dismissed by Court

In the case of Harper v. Kriss Contracting, Inc., William Harper filed a lawsuit against Veronica and Kathleen Kriss, owners of Kriss Contracting (Kriss). The lawsuit alleged that Harper was not properly compensated for overtime hours worked during his employment with the company.

Harper worked on and off for the company and was initially hired as an electrician. Kriss argued that he was later reclassified as an equipment operator. They maintained records of hours worked, including timesheets and payroll summaries, categorized by the type of work performed. Kriss claimed that these records complied with Delaware and federal laws.

The court examined the evidence presented by both Kriss and Harper. Kriss provided time reports and pay stubs that showed Harper was paid at the statutory rate of 1.5 times his regular rate for overtime hours worked. They further argued that there was no genuine dispute that they correctly classified and compensated Harper for his work. Harper argued that he should have been classified as an electrician for all his hours worked. However, he failed to provide specific record evidence to support his claims of misclassification or inadequate compensation.

The court determined that Kriss have met their burden of showing no genuine dispute as to any material fact. They properly classified Harper’s hours according to the type of work he performed and paid him at the required rate for overtime hours. As a result, the court granted Kriss’ motion for summary judgment and dismissed Harper’s claims.

Key lessons from this case:

  • Employers must maintain accurate records of the hours worked by their employees, including work logs, timesheets, and payroll summaries.
  • Employees have the responsibility to provide evidence and prove the existence of a genuine dispute if they believe their hours have been misclassified.
  • Employers may hire employees for multiple types of work with different hourly rates, and they must ensure that they pay the appropriate rate for each type of work performed during overtime hours.
2. Court Approves $5 Million Settlement for Employees Owed Backwages in Overtime Case

In the case of Archer v. Defenders, Inc., a group of employees filed a lawsuit against Defenders for failing to pay them for all of the hours they worked. After more than four years of litigation, the parties have reached a settlement agreement for $5 million. 

The court approved the settlement because it found that there was an actual dispute between the parties regarding overtime payment. It also found that the settlement did not undermine the purposes of the FLSA and that it was fair and reasonable. The court determined that the settlement resolved the dispute, did not restrict employees’ rights to discuss the case, and released only wage-and-hour claims related to the lawsuit. 

Additionally, the court found that the settlement was reasonable after taking into account the potential risks and uncertainties of litigation. The court also evaluated the attorney fees and expenses and concluded that they are fair and reasonable based on the lodestar analysis. 

Ultimately, considering the lengthy and complex nature of the litigation, the court approved the settlement as it benefited the employees and provided reasonable compensation to the attorneys.

Key lessons from this case:

  • The lodestar analysis involves evaluating the reasonableness of attorney fees based on factors such as the time spent, the rates charged, and the complexity of the case.
  • The settlement amount should provide a good risk-adjusted recovery for the employees and attorneys involved.
  • The duration of a lawsuit can significantly impact the decision to settle an overtime lawsuit, especially if it has dragged on for an extended period.
3. Employees File Claims for Overtime and Unpaid Wages under the FLSA

In the case of Ji Guo Wu v. East Ocean Agriculture Corp., eight former employees of East Ocean Agriculture Corp (East Ocean) filed a lawsuit under the Fair Labor Standards Act (FLSA). The employees alleged various violations, which included failure to pay overtime wages, minimum wages, unpaid wages, and retaliation. 

East Ocean operated a farm business in Delaware. Three of the eight employees worked as drivers who delivered vegetables from the farm to New York. The other five employees were farm workers who alleged unpaid wages. East Ocean sought dismissal based on jurisdictional and pleading requirements. 

The court determined that the employer/employee relationship and individual/enterprise coverage were elements of an FLSA claim, not jurisdictional prerequisites. The complaint sufficiently alleged an employment relationship. Additionally, the employees engaged in interstate commerce or the production of goods for interstate commerce met the coverage requirement. 

East Ocean also argued that the employees failed to state Delaware Minimum Wage Act (MWA) claims due to an agricultural exemption and Delaware Wage Payment and Collection Act (WPCA) claims based on the statute of limitations. The court agreed that all employees were employed in agriculture, exempting them from MWA minimum wage requirements. Claims under the WPCA were time-barred for some of the employees. The court granted partial dismissal but allowed an opportunity to amend certain claims.

Key lessons from this case:

  • To state an overtime claim under the FLSA, employees must prove an employer/employee relationship, engagement in interstate commerce, or the production of goods for interstate commerce.
  • Plaintiffs must provide specific periods during which they were not paid minimum wages, overtime wages, or any wages at all.
  • The WPCA claims are subject to a one-year statute of limitations, and claims based on activity occurring before a specific date may be time-barred.

Learn more about Delaware Labor Laws through our detailed guide.

Important Cautionary Note

When making this article we have tried to make it accurate but we do not give any guarantee that the information provided is correct or up-to-date. We therefore strongly advise you seek advice from qualified professionals before acting on any information provided in this article. We do not accept any liability for any damages or risks incurred for use of this article.