The DOMA Decision’s Confusing Effect on Employee Benefits

The Supreme Court DOMA decision impacts employee benefits only in states that recognize same sex marriage. What happens to employees transferred from one that does to one that doesn’t?

The US Supreme Court today declared a key provision of the federal DOMA unconstitutional when applied to federal programs and rights. The decision, however, did not limit a state’s rights to determine what a marriage is and who can marry. Traditionally states have been able to define who and what constitutes a marriage. An example would be common-law marriages. Depending upon the state, a couple can sail into the harbor of marriage by simply agreeing to have a common last name or having one partner state that they are married and no denial is made. Many states do not allow common-law marriages in any form. Thus a couple having been considered married by common law in one state could find themselves unmarried by moving to another if they failed to properly document the evidence of their common law arrangement.

In reviewing the court’s decision concerning same-sex marriage in relation to DOMA, similar situations will occur as same-sex couples are transferred or move to states where same-sex marriage is not recognized. This will create some inconsistency in benefit plans as the transferred employee may lose some benefits if transferred to a state that does not recognize the relationship.

However, the ruling also affects a cornucopia of regulations, contract provisions, and laws. This effect is limited to those states that recognize same-sex marriages and have some process where the marriage is recorded in a similar fashion to a traditional marriage. Employers will now have to determine which employees have a qualifying same-sex relationship and permit access to spousal FMLA leave, COBRA rights, healthcare insurance benefits, life insurance benefits, and other similar benefits or entitlements.

One effect of this decision is to eliminate the confusion between regulations such as the FMLA in states that have enacted their own version of FMLA that allowed protected leave for spouses in a same-sex relationship. Employers in these cases sometimes found themselves in certain circumstances, having employees that were entitled to twice as much leave as others based on the relationship type. With this ruling this issue has generally been eliminated.

The key for the employer to remember for the purposes of determining entitlements and benefits is that like a traditional marriage, a same-sex marriage must comply with state law that sets out the process and standards for any valid marriage. As for having a nontraditional married employee “prove” their relationship – a word of caution. If you were to require only same-sex partners to provide documentation, then you could be subject to a discrimination claim. If you require a marriage certificate, you must require it of every married employee.

As the court’s decision becomes better understood and the effects become apparent, I will continue to talk about the best practice strategies for employers to adjust their policies, benefits, and procedures to avoid costly legal entanglements.

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