THE SAME-SEX MARRIAGE

ISSUE AND ITS IMPACT

ON BUSINESS - PART II

The United States Supreme Court has been the focus of much attention this Spring as the Court entertained oral arguments in two separate same-sex marriage cases. The first case is a challenge to a lower appellate court ruling that overturned California's Proposition 8, in which voters in that state defined marriage as being between persons of the opposite sex. The second case is a challenge to the federal Defense of Marriage Act ("DOMA"). Many employers (and employees) following these two cases are interested in the effect a ruling by the Court in favor of same-sex marriage may have in the workplace.

In addition to the issues covered in Part I, please consider the following additional potential impact in the workplace of a federally recognized same-sex marriage status:

• The value of health insurance benefits (in the context of an ERISA-governed program and not a state-regulated insurance program) from an employer for an employee's same-sex spouse will be considered income to the employee for federal income tax purposes.
•  If contributions are made to a cafeteria plan (section 125 [federal]) on a pre-tax basis for a same-sex spouse, the full value of the coverage, including the pre-tax contributions, must be imputed to the employee for federal tax purposes.
• To calculate state taxes, employers may have to subtract any income imputed to the employee for federal tax purposes, which will create an additional administrative hurdle.

If recognition and protections are extended to same-sex marriage, employers may need to audit employment manuals, policies that apply uniquely to married employees to ensure that, as worded, they can now be applied equally to same-sex married couples (or alternatively, if the policy in question is governed by federal law, that it is clear it only applies to heterosexual married couples). In addition, employers would need to review new employee forms, benefit plan enrollment forms, etc. to ensure, where necessary, they are gender neutral in relation to identification of marital status and spouse. Further, employers will be encouraged to work with their insurance agents and benefit plan administrators to understand (and change, if needed) the definitions of "spouse" in those plans.

Decisions by the U.S. Supreme Court on both pending cases are expected in late June or early July.

Keith Wilkes is an Owasso resident and member of the Owasso Chamber Executive Board of Directors.  Keith represents business, professional practices, organizations and municipalities in all areas of labor and employment law, civil rights and general litigation practice.  Keith is a Past-Chair of the Oklahoma Bar Association Labor & Employment Law Section, and taught Human Resources Law for nearly a decade as an adjunct instructor at Tulsa Community College.  Keith can be reached at 587.0101, or at kwilkes@newtonoconnor.com.  This series sponsored by Keith Wilkes.