High Court's Ruling on DOMA Impacts the Workplace
The U.S. Supreme Court has issued a ruling that redefines rights under federal law with respect to spouses in same sex marriages. The Court ruled that a portion (Section 3) of the Defense of Marriage Act (DOMA), which restricts marriage to a man and woman, is unconstitutional because it violates the liberty and equal protection guarantees of the 5th Amendment of the U.S. Constitution. United States v. Windsor, Executor of the Estate of Spyer, et al. Docket No. 12-307.
The Court found that DOMA’s limited definition of marriage deprived same sex couples in state-sanctioned marriages of rights given to a married man and woman. So, same sex couple partners married in states that recognize same sex marriages now enjoy the same federal rights as spouses in a marriage between a man and a woman.
Thirteen states (California, Connecticut, Delaware, Iowa, Maine, Maryland, Massachusetts, Minnesota, New Hampshire, New York, Rhode Island, Vermont and Washington) and the District of Columbia currently sanction same sex marriages. (Same sex marriage enabling laws go into effect in Rhode Island and Minnesota on August 1, 2013.) Therefore, in those states, certain federal employment, employee benefits, and tax law rights should now extend to an employee and his/her spouse in a same sex marriage in the same manner that those rights would otherwise extend to a married man and woman.
Employers in those states recognizing same sex marriage will have to extend FMLA benefits to employees to care for a same sex spouse who is suffering from a “serious health condition.” In addition, in those states, a same sex spouse will also be entitled to the same coverage rights under a health plan as a heterosexual spouse and to continuation of health insurance coverage under COBRA as a spouse and, in addition, will be eligible for the special health insurance enrollment rights provided for under HIPAA following a marriage or birth of a new child. ERISA plans, health reimbursement plans and cafeteria plans will also be required to extend benefits to a same sex spouse in those states. Immigration laws should also now allow a spouse in a state-sanctioned same sex marriage to petition for permanent residency of a foreign spouse.
The Windsor case involved an estate tax imposed on the surviving spouse in a state-sanctioned same sex marriage because the IRS ruled that she was not a “spouse” entitled to the spousal deduction. Hundreds of other tax provisions, including, but not limited to, estate and gift taxes, the filing of joint income tax returns, the way in which pension benefits are paid, and how fringe benefits are taxed, depend on marital status and will be impacted by this decision.
Right now, because the Court recognized marriage as a state law matter, the Court’s decision rejecting Section 3 of DOMA does not appear to impact employers conducting business in the thirty-seven states that do not currently recognize same sex marriages. Seven of those states (Colorado, Hawaii, Illinois, Nevada, New Jersey, Oregon and Wisconsin) do recognize domestic partnerships and other forms of civil unions short of marriage, but the Court’s ruling does not seem to attach to any such states.
The groundswell created by this decision will likely lend more momentum to the fight for equal rights for same sex couples in many of these thirty-seven states.
*This Alert was provided by Dilworth Paxson LLP. It is provided solely for informational purposes. This is not legal or tax advice.