Impact of Same Sex Marriage Laws on Employers
Published August 2011
New York State’s recent legalization of same-sex marriage is the latest notice to employers that providing benefits to married employees is getting more complicated. And unless employers monitor their state’s marriage and partnership laws and keep their benefits policies up-to-date, the employers risk violating laws and discriminating against newly-protected employees and their spouses or partners.
Here’s what’s happening: New York is just the latest state to legalize same-sex marriage. New York joins Connecticut, Iowa, Massachusetts, New Hampshire and Vermont, along with the District of Columbia, in legalizing same-sex marriage. In addition, 12 states have approved marriage-like rights for those in civil unions and domestic partnerships.
Each state’s law is different, but the general concept is that persons in same-sex committed relationships are granted many or all of the legal rights and protections of opposite-sex persons in traditional marriages.
What the law means for employers in New York State.
New York has a comprehensive law, granting all benefits and rights provided to employee’s opposite-sex spouses to employees with same-sex spouses. New York’s former Governor Paterson in 2008 issued a directive requiring employers to treat same-sex employee spouses (married outside New York) as they treated opposite-sex employee spouses for insured health and welfare benefits. The new law broadens that obligation to same-sex partners married in New York State.
In addition, other employer-provided benefits and policies for opposite-sex spouses also must be offered without discrimination to same-sex spouses.
For example, education and funeral leave benefits offered to spouses and married employees should be offered now under New York law to same-sex spouses, according to attorney Roberta K. Chevlowe, senior counsel with the Proskauer law firm in New York. In addition, Chevlowe notes that it appears New York employees have the right to take leaves under the federal Family and Medical Leave Act (FMLA) to care for an ill same-sex spouse, because the FMLA defers the definition of “spouse” to the state law in which the employee resides.
(Note: Employers with self-insured health, pensions, welfare, and other benefits operating under the federal Employee Retirement Income Security Act [ERISA] and other federal laws are not required to treat same-sex spouses as “spouses” for purposes of such plans. Employers, of course, may voluntarily choose to extend such benefits to same-sex partners.)
Impacts on employers outside New York and similar states.
If your business operations are outside of New York state and located in a state or states that do not recognize same-sex marriages and similar relationships, what do these laws mean for you and your employee benefits and other policies? For answers, we interviewed attorney Chevlowe and also attorney Kimya S.P. Johnson, with Cozen O’Connor in Philadelphia.
Q. Why should an employer operating outside one of the same-sex marriage states care about what’s happening in those states?
Chevlowe: The first thing you’d need to do is check to see whether your state recognizes out-of-state same-sex marriages or civil unions. Because if your state laws do recognize same-sex marriages in other states, it’s an issue then that probably applies to you. This could also affect you if your state recognizes civil unions in other states. So check whether your state recognizes these out-of-state unions for employees in your state.
And if you’re operating in multiple states or in one of the states with a same-sex union law, you need to check those state laws to make sure you’re compliant with their state laws.
Johnson: They should be aware if they are not in a state where same-sex marriage is legalized – yet – it is an issue that is working its way across the country. Various legislation is pending in other states. There’s definitely a concerted effort to have same-sex marriage in other states. So don’t dismiss it because your state has not yet legalized it. It’s something you should be monitoring.
Even employers operating in a state not yet recognizing same-sex marriage as a legal right are adopting policies that are gender neutral. It’s such a dynamic, rapidly evolving area. Some employers have found it just makes business sense to have gender neutral policies or at the least policies that are not seen as discriminatory.
Q. What about the business or organization that has employees in two or more states, and in at least one of those states there’s a same-sex marriage or same-sex civil union law? What is the impact on the employer? For example, if the company headquarters is in Pennsylvania and half of the employees are in New York, what’s the impact on that company?
Chevlowe: If you’re operating in multiple states or in one of the states with a same-sex union law, you need to check those state laws to make sure you’re compliant with their state laws. Those employers would be well-advised to revisit their policies in light of the New York and other similar laws, because employers will likely want to rewrite their policies, update them, and create separate eligibility for employees, depending on the state in which they reside and depending on what their state offers. Putting aside legal requirements, from an employee relations perspective, I’d think many employers would want to treat all employees in a similar fashion, even if they aren’t legally required to do so.
Johnson: Employers, if they are doing business in a state that recognizes same-sex marriage, have to comply with that law in that state. If any one of the states in which an employer is doing business recognizes same-sex marriage, we’re finding most of these employers have a common, uniform policy. It’s easier for them to be consistent across all the states they are in.
Q. What action steps do you suggest employers take, especially for employers that are in states that do not yet have any law requiring same or similar treatment for employees in same-sex relationships?
Chevlowe: Stay on top of the issue and monitor what’s going on in that state or other states where employees may live who work for you. Monitor the issue along with your legal counsel, because this issue is moving fast. Include in your monitoring a review of benefit plan documents, summary plan descriptions, enrollment forms, and administrative procedures. Assess the current rights of same-sex spouses and domestic partners and consider any required, or desired, changes. Consider with your legal counsel the potentially discriminatory consequences of imposing any eligibility requirements on same-sex partners that are not imposed on opposite-sex partners.
Johnson: Monitor the current status of the laws in the states in which you are conducting business, and recognize that requirements may vary. Revisit your policies. And there are different types of policies – such as bereavement leave, absence policies, employer-sponsored family and medical leave policies. All employers should revisit all their policies as they relate to partners and spouses and recognize that the definition of spouses can change rapidly. The definitions of spouses and partners can get complicated. It’s important that you consult with legal counsel. Understand and know that every state has different language for these definitions and you have to know them for every state in which you’re doing business.