Panel Ponders How Supreme Court's DOMA Ruling Affects HR

Author: David B. Weisenfeld, XpertHR Legal Editor

August 13, 2013

The Supreme Court's June 27 decisions in favor of same-sex marriage continue to be the subject of much discussion. The Court itself noted that its opinion in United States v. Windsor to strike down Section 3 of the Defense of Marriage Act (DOMA), defining marriage as being between one man and one woman, will affect the application of more than 1,000 federal laws.

A new XpertHR podcast features our editorial team taking an in-depth look at how the Court's historic ruling could affect various aspects of employment law. Since most states retain the right to refuse to recognize same-sex marriages performed legally in other states, the decision still leaves many questions unanswered.

A 'Hodge-Podge' for Employer Benefit Plans?

A big impact of the Supreme Court's DOMA decision is that same-sex married couples living in one of the 13 states where such marriages are recognized will now be treated the same as opposite-sex couples, making them eligible for the same federal benefits and protections linked to marital status.

XpertHR health and benefits specialist Tracy Morley points out that most tax-qualified retirement plans subject to the Employment Retirement Income Security Act (ERISA) have provisions in place that turn on the marital status of plan participants. However, any retirement plan feature that depends on marital status, such as survivor benefits, will only apply in a state that recognizes same-sex marriage.

Morley says, "Until we receive additional guidance, we will not know how these features will apply to same-sex spouses who were married in a recognizing state but move to or live in a state that does not recognize same-sex marriage."

Expanding FMLA Protections

Panelist Melissa Burdorf notes that more couples will now be entitled to leave under the Family and Medical Leave Act (FMLA). Under the ruling, a same-sex spouse's right to take FMLA leave to care for his or her spouse will be based on whether the couple's marriage is recognized in their state of residency, she points out.

As a result, employers must be keenly aware of all states' marriage equality laws. Burdorf says that means they must be careful not to deny FMLA leave to employees who wish to care for a same-sex spouse with a serious health condition and who live in states recognizing same-sex marriages but work in states that do not grant such recognition.

For instance, an employer with a New Jersey office that draws employees from neighboring New York would need to provide FMLA leave to its New York employees under this scenario (since New York recognizes same-sex marriage). However, the employer would not be subject to the same requirement in New Jersey, according to Burdorf. Nonetheless, she warns that employee morale could be adversely affected should the employer make this distinction.

The Tax Man Cometh

Fellow panelist Rena Pirsos, who covers payroll tax issues for XpertHR, says there is no question employers will have to "re-program" their payroll systems so they no longer withhold income tax and FICA tax for benefits provided to same-sex spouses residing in states where these marriages are recognized.

But the bottom line when it comes to taxes, Pirsos says, is that more guidance is needed from the IRS as to whether the new federal definition of spouse will apply retroactively. She explains that this is a key question because employers may have to amend 2013 employment tax returns and possibly even prior years' returns for employees who are same-sex spouses in affected states.

And That's Not All

While employers await guidance from the IRS and other agencies, the US Citizenship and Immigration Services agency and the Department of Homeland Security updated their websites in the aftermath of the Supreme Court's decision to provide guidance to individuals filing an immigration petition on behalf of a same-sex spouse.

This guidance makes clear that a US citizen or lawful permanent resident in a same-sex marriage may sponsor his or her spouse for a family-based immigrant visa. However, questions remain in this area as well, so employers should continue to monitor the impact of the Court's ruling on immigration benefits.