House and Senate Democrats broke with Democratic Governor Matt Meyer earlier this week, overturning his veto on a controversial labor bill and enacting it into law.
Senate Bill 63, as amended, prohibits employers from misclassifying workers as independent contractors to evade required payroll contributions and income tax, unemployment insurance, and workers’ compensation deductions. However, the new statute also makes contractors responsible for policing their subcontractors’ compliance with these laws, under threat of having their certificate of registration revoked by the state.
In vetoing the measure on August 28th, Gov. Meyer expressed concern that it risked “making good actors responsible for the wrongs of others,” and could produce unintended consequences for small, new, and minority-owned businesses and nonprofits, without addressing the root cause of wage theft. He also directed the Delaware Department of Labor to collaborate with stakeholders and develop recommendations to enhance enforcement under existing law.
House Republicans also took issue with the bill. Neither the bill’s original passage last June nor the veto override received any support from the caucus’s 14 members.
The governor was not the only one receiving a slap-down from legislative Democrats. The Delaware Hispanic Commission and the Delaware Black Chamber of Commerce had written to all lawmakers this week, urging them not to override the veto.
In its letter, the Delaware Hispanic Commission stated that while the group supported the bill’s intent, it noted the proposal’s structure posed serious risks: “Many Hispanic and Latino residents—especially those working in construction, landscaping, and similar trades—operate as independent contractors out of economic necessity, not preference. The joint liability provisions in SB 63 are likely to discourage general contractors from engaging with small, independent workers, effectively cutting off vital income opportunities for individuals who already face significant barriers to employment.”
The Delaware Black Chamber of Commerce shared additional concerns in their email: “While intended to protect workers, SB 63 would instead impose unfair liability on general contractors, increase costs, and disproportionately harm small and minority-owned businesses across Delaware’s construction industry.”
Under Delaware law, a veto override requires a three-fifths supermajority vote in each legislative chamber, or a minimum of 13 votes in the Senate and 25 in the House. The override cleared the Senate 15 to 6 and the House 25 to 15 (with one member absent). The vote was entirely along party lines, except for State Rep. Josue Ortega (D-Wilmington West), who opposed the action.
