In a landmark ruling last week, the U.S. Supreme Court legalized same-sex marriage across all 50 states, including the 13 where it had not been legal previously. The Obergefell v. Hodges decision was cause for celebration in the LGBT community and beyond, but it is also a reason for employers to go back and take a fresh look at how their policies treat same-sex married couples.
Although Obergefell may not result in dramatic changes for most companies, some will have to revamp aspects of their HR and legal policies to cover LGBT employees in the benefits space.
When applying Obergefell in the workplace, it’s important to note where the decision will make a mark on employers. The ruling requires every state to allow LGBT couples to marry, but it doesn’t have the power to prevent unequal treatment of LGBT people in the hiring process or in the workplace, explained Oregon-based attorney Kevin Sali. “The source of a private actor’s constraints or limitations isn’t going to be the Constitution itself, it’s going to be nondiscrimination laws in states where those exist,” he told CorpCounsel.com.
In such places as Sali’s home state of Oregon, private companies have to comply with a state law that prevents discrimination against LGBT individuals in the workplace. But in other places those protections don’t exist. Without clear LGBT anti-discrimination legislation passing at the federal level, states are left to their own devices. So even though Obergefellwas a major victory for same-sex marriage, it doesn’t prevent companies from engaging in other forms of discrimination against this segment of the population.
Despite that, the ruling will prompt employers to think about marriage at least a little differently from the health benefits perspective. “Depending on how your plan defines ‘spouses,’ people that were not spouses before in states like Alabama or Texas are now spouses,” Scott Schneider, a partner at Fisher & Phillips, told CorpCounsel.com. Although many employers, including those with a presence in states where same-sex marriage was not yet legal, have always offered benefits to employees regardless of sexual orientation (whether as married or unmarried partners), there will be some who need to rethink this post-Obergefell.
“I feel like especially for large employers it might make sense for them to come out now and say: ‘Here are the forms where you have to declare a spouse that might be impacted, here’s window of time we’re going to give you to amend those forms,’” Schneider said.
Besides making sure same-sex spouses get the health benefits coverage any spouse would in a heterosexual marriage, the ruling will require companies offering benefits for unmarried same-sex partners to decide whether this program is necessary anymore, given that LGBT people now have marriage rights in every state.
“Companies seem to be wrestling with this,” Todd Solomon, a partner at McDermott Will & Emery, told CorpCounsel.com. He noted that although some employers have already announced they will eliminate benefits options for unmarried same-sex partners in the near future, there also are arguments for keeping these available.
The Supreme Court’s ruling will likely simplify administrative processes for employers in the tax arena. After U.S. v. Windsor was decided in 2013, explained Solomon, the federal government began treating all same-sex couples that got married as legally married, including for tax purposes. However, in states where same-sex couples lived but same-sex marriage was banned, spouses were still unmarried when it came to state taxation. This caused confusion for employers in several areas, including how to tax health benefits for same-sex married partners of employees. “Employers, I think, are very relieved that they no longer have to tax same-sex spouse benefits,” Solomon said.
Though it has significant benefit and tax repercussions, Obergefell will not change much in another area important to married couples: the Family and Medical Leave Act. This is the federal law allowing workers at companies that employ 50 or more employees with a minimum amount of time worked to take up to 12 weeks off a year to care for a spouse, child or parent. The U.S. Department of Labor already took care of any state-to-state inconsistencies when it announced back in March that the law would be applied to LGBT couples based on the “state of celebration” of their marriage, rather than in the state in which they reside. That way, even married LGBT couples living in states that did not allow same-sex marriage would have the opportunity to claim FMLA leave if one partner fell ill.
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