Almost exactly two years ago, I wrote a post on how “grossing up” on taxes for benefits given to gay civil union employees could trigger discriminatory pay liability. In that post, I highlighted how Google is providing extra compensation to gay employees in civil unions to make up for the fact that they receive less tax breaks than married heterosexual couples with respect to health insurance benefits. My concern was that making any pay dependent on one’s sexual orientation is a per se violation of the anti-discrimination laws, even if the intent is to ultimately treat homosexual couples equally with heterosexual couples. This was because of the Defense of Marriage Act.
From an employment law standpoint, DOMA is frustrating. On the one hand, it creates a legal class of benefits only allowable for heterosexual couples (specifically, with respect to IRS regulations). On the other hand, and in seeming contradiction, sexual orientation is a protected class and employers can be held liable for discriminating on wages and benefits. (Not surprisingly, everything boils down to the IRS and who gets what as tax breaks. Every time a new law gets passed that affects tax categories, there are sweeping unintended consequences that make it difficult for the average business owner to comply with every duty foisted upon him.)
DOMA really has two parts. 1. Every state is not required to accept the gay marriages of another state, but is free to define marriage how it sees fit. 2. Federal laws and regulations defined marriage as between one man and one woman.
What the Supreme Court did today was strike out that second part. Marriage is now defined individually by each state. And each state does not have to honor the other state with respect to gay marriage (yet… this will certainly beg a “full faith and credit clause” challenge).
So basically, if you are gay and married in a gay marriage state, such as California, you are married for purposes of California law (i.e. adoption, inheritance, property rights) and for purposes of federal law (i.e. federal income taxes). But you are not married for purposes of Missouri law because Missouri has a state constitutional amendment defining marriage as heterosexual marriage only. So a gay couple should not expect to move to Missouri and claim the same rights as a heterosexual couple after being married in California.
This seems complicated. But actually, in my humble opinion, today’s opinion makes things easier for most employers. Why? Well because you no longer have to decide who is married and who is not for purposes of particular state and Federal laws. If somebody is married, then you can now apply all those employment laws in the same way regardless of their sexual orientation. “Married” will mean the same thing under both state and federal law for all your employees. In your role as an employer, you no longer have to ask, and you no longer have to care, about the sexual activities of your employees. I say “hooray!” It’s one less administrative burden.
So what employment laws and policies are affected by married status? Here is a non-exhaustive list:
- Healthcare and insurance benefit offerings to spouses and families, particularly pre-tax
- Family medical leaves
- Maternal and paternal leaves
- Equal pay practices
- Childcare benefits
- Hiring practices (this was unchanged by DOMA)
Here’s the upshot: If you’re in a state where gay marriage is legal (like California), then offer the same benefits to all married couples (gay or straight). If you’re in a state where gay marriage is not legal (like Missouri), then offer the same benefits to all married couples (who would, by operation of state law, all be straight). If you’re in a state like Missouri, and you want to offer additional benefits to gay couples, be very careful and talk to your lawyer. As I noted two years ago, making any employment law or pay determinations based solely on sexual orientation, no matter your intentions, is problematic.
Now whether you agree or disagree with your particular state’s gay marriage recognition laws is altogether another question. It certainly should not be a debate for the workplace as an employer. And it certainly will not be uniform across the United States for some time to come (if ever). SCOTUS kicked that can down the road with today’s California Prop 8 ruling. Currently, it is a matter of each state’s preference.
UPDATE: In November 2014, a Missouri state judge ruled that the Missouri ban on gay marriage was unconstitutional. Since this conflicts directly with the state constitution, the law is now unsettled in this state.