With a growing number of states legalizing same-sex marriage or equivalent domestic unions, human resources departments face the challenge of rewriting personnel policies to adapt to new realities.
Recent events have raised the flames under a longsimmering issue. In April of this year, for example, Connecticut adopted a civil union law that extends to same-sex couples the same rights individuals in traditional marriages enjoy. The action comes a year after Massachusetts became the first (and still only) state to explicitly recognize same-sex marriage. These states have joined Vermont in recognizing some form of same-sex union as equivalent to and sharing the same rights as traditional marriage.
Look for more developments to come. "Close to 15 states have addressed the issue of same-sex unions in the past six months," says Sara Goldsmith Schwartz, founder and president of the law firm of Schwartz Hannum, Andover, MA. "Before long I think we will see two or three more states becoming recognition states in whatever way they choose." ("Recognition states" is a term Schwartz uses to refer to states that have recognized same-sex marriage, either explicitly or as some form of civil union with equivalent rights.)
Many states have recently extended to same-sex couples expanded rights, if not to the degree of complete marriage equivalency. Both California and New Jersey, for example, have adopted laws that allow all same-sex and heterosexual couples over the age of 62 to register for domestic partnership status with certain specified rights. Hawaii has a "reciprocal beneficiaries" law on the books and the District of Columbia has a domestic partnership law that affects only government employees.
The changing legal landscape means human resources departments need to update their policies to comply with all applicable laws. In states that recognize same-sex marriage or its equivalent, employers must extend benefits equally to all couples to avoid the risk of litigation alleging discrimination based on sexual orientation. In states that offer varying levels of protection for domestic partnerships or civil unions, employers need to address the extension of benefits to meet new legal requirements that are often unclear.
While some companies would like to keep the issue on the back burner, a force for change is coming at the grassroots level. "Educated gay employees are starting to ask a lot of questions about benefits, and that is forcing companies who might otherwise do the 'ostrich routine' to start making the philosophical decisions about corporate rights and responsibilities to same sex couples," says Schwartz.
By "philosophical decisions," Schwartz refers to several areas. First, should benefits be extended to same-sex couples whose protections under the new state marriage laws are preempted by federal laws such as the Employee Retirement Income Security Act (ERISA)? Second, should benefits provided to employees in same-sex unions in recognition states be extended to employees in other states where equivalent protections are not legally mandated? Third, should employers be proactive in extending benefits to samesex couples even where no laws yet apply?
Let's take each in turn.
It's clear that many benefits mandated by state law in recognition states must be extended to same-sex couples. An example is the Small Necessities Leave Act in Massachusetts, which mandates leave for specific purposes.
The issue is less clear cut for benefits mandated by federal law. Examples are workplace leave mandated by the federal Family and Medical Leave Act (FMLA), retirement benefits governed by ERISA and the extension of health insurance benefits under COBRA. While at first blush it would seem same-sex couples are entitled to these important benefits, all of them originate in federal law and thus are governed by the federal Defense of Marriage Act (DOMA), passed in 1996, which defines marriage as "a legal union between man and woman as husband and wife." Because this definition overrides any more expansive interpretation by states, DOMA in effect relieves employers of the responsibility of extending federally mandated benefits to same-sex couples. "An employer can choose to extend such benefits but cannot be required to do so by law," says Schwartz.
Because of DOMA, employers may incur additional overhead when extending benefits to same-sex couples. For example, in Massachusetts health insurance benefits for an employee's same-sex spouse are tax exempt for state purposes, but not on a federal basis.
Multistate employers, in particular, face a special challenge, says Schwartz, who represents such nationwide monoliths as IBM and The TJX Companies. "What do you do when you operate facilities in several states with different rules? This is what companies are struggling with."
There are two possible approaches. The first is a restrictive one that covers only individuals as mandated by law. That is the least expensive, but requires additional record keeping. It can be difficult to administer plans with differential treatments by state. More expensive still may be the possible strife created among employees who are treated differently in one state than in another.
The second, which Schwartz refers to as the "least common denominator" approach, extends the same degree of rights to everyone in the company. "Certainlythe least common denominator approach makes things easier," says Schwartz. "But some companies say they don't want to do any more than they have to."
Should employers be proactive in extending benefits to same-sex couples even where no law yet applies? Despite the increased expense of doing so, it seems more employers are taking that route to attract and retain better quality employees. Darden Restaurants, Rock Bottom Restaurants, TGI Fridays, California Pizza Kitchen and Applebee's are among the restaurant companies extending these benefits to their staffs, and they are hardly alone.
Survey figures reflect that domestic partnership benefits
are great recruiting and retention tools for employers.
"There has been a noticeable increase in the number of employers extending benefits to same-sex couples," says David Namura, manager of governmental relations at the Society for Human Resource Management (SHRM), Alexandria, VA. "In a 2003 survey we found that 35 percent of human resources professionals offered domestic partnership benefits to either same-sex or opposite-sex partners. Breaking that down, we found that 31 percent offered the benefits to oppositesex partners and 23 percent to same-sex partners."
One year later, says Namura, those figures had risen to 39 percent, 34 percent and 27 percent, respectively. Clearly the trend is toward greater inclusion. "These figures seem to reflect the fact that domestic partnership benefits are great recruiting and retention tools for employers. Obviously human resources is always looking for the most qualified talent and you want to offer as many benefits as possible to fit the corporate climate that the human resources professional operates in."
Restaurant operators likely recognize a potential payoff in extending benefits. "Benevolence generally buys an employer loyalty and productivity," says Joan Curtice, a Burlington, MA-based human resources consultant with a specialty in legal compliance and harassment prevention. "I believe that employees who feel safe and who don't have to worry about their partners' well-being can be more productive."
These kinds of benefits obviously have an impact on the bottom line. "We don't want to create a situation where giving benefits will put companies out of business," says Curtice. "Given the number of employees involved, though, I would be surprised if this were a break-the-bank situation. We are not revolutionizing the cost of benefits for the entire work force." In the end, says Curtice, "there will be a win-win situation for everyone. That's the whole purpose of benefits to begin with."
A Moving Target
All of these decisions are further complicated by legal challenges that threaten to overturn the new laws and send employers back to the drawing board. In many states same-sex marriage stimulates vocal opposition that often translates into political action. In Massachusetts, for example, a court challenge is attempting to overturn the recognition of same-sex marriage and a proposed constitutional amendment would confine marriage to the union of one man and one woman. "Both sides of the issue are so emotionally charged that there is a constant battle in the courts," says Schwartz. "The issue is likely to be on the ballot in Massachusetts in 2006 as a referendum."
Massachusetts is not the only locale for conservative resistance. Indeed, the great majority of states prohibit same-sex marriage either by statute or constitutional amendment. On the federal level, Congress is considering legislation that would restrict marriage to individuals of opposite gender, and some legislators favor an equivalent constitutional amendment. Such a disconnect between the growing number of employers offering domestic partnership benefits and the resistance to recognition of same-sex marriage by the public is symptomatic of the controversial nature of this topic.
Given this cauldron of turmoil, it's little wonder
many employers are opting to take a wait-and-see attitude.
Given this cauldron of turmoil, it's little wonder many employers are opting to take a wait-and-see attitude. While a paralysis of action may seem prudent to an employer faced with an ambiguous moral conundrum framed by a set of conflicting laws, delay puts human resources people in a difficult position. "At this point I am seeing human resources folks getting an onslaught of inquiries from employees that they do not know how to respond to because the corporate leaders have not yet made the necessary philosophical decisions," says Shwartz.
Delay only increases the level of confusion. "Humanresources professionals are telling me they want to do the right thing but they are not sure what that is," says Curtice, who is among the consultants who believe more states will join the ranks of those recognizing same-sex marriages. "I would say they are addressing the issue less as a value concept and more as a practical challenge. Most human resources people, after all, are diligent about protecting companies against unnecessary litigation."
In distilling the changing laws addressing same-sex marriage into productive personnel policies, human resources professionals face a delicate juggling act. Consideration must be given to the requirements and emotions of employees, the need to attract and keep the best people, conflicts between state and federal law, possible backlash from customers and the public and the possibility that more liberal state laws will be reversed or, conversely, more states will expand the concept of marriage to include individuals of the same gender. Finally, many expect that the federal DOMA law will be challenged in courts.
Despite this complex matrix of forces, employers need to make some hard decisions now to avoid problems down the road. "Companies which ignore this topic risk more than litigation," says Schwartz. "They also face a decline in employee morale. Companies will be unable to retain gay employees if they do the 'ostrich routine' on this issue."
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Phillip Perry ([email protected]) is a business writer who has spent more than 20 years writing about workplace psychology, employment law and marketing.