United States: Considerations For US Employers Post-DOMA

When the Supreme Court issued its opinion in U.S. v. Windsor on June 26, it invalidated the federal definitions of "spouse" and "marriage," and, in so doing, altered employer obligations with respect to same-sex marriages. Although the media coverage of this decision has understandably focused on other implications of the decision, it inevitably creates new challenges for employers. In this post, we will provide insight into how the decision will affect employers moving forward and provide suggestions as to how employers can best prepare in the face of new areas of uncertainty created by this decision. 

The Windsor Decision 

Section 3 of the Defense of Marriage Act ("DOMA") defined the terms "marriage" and "spouse," as used in federal law and regulations, to exclude same-sex unions. This section was challenged in a suit brought by Edith Windsor seeking a refund of federal estate taxes she was required to pay following the death of her wife. The couple had been married in Ontario, Canada and the marriage was recognized by New York, the state in which they lived. Notwithstanding her status as a legal spouse under state law, Ms. Windsor was required to pay estate taxes because she did not qualify for the "surviving spouse" exemption under DOMA's definitions.

The Court's decision to strike down DOMA's definitions of "spouse" and "marriage" relied on three principle arguments. First, states traditionally possess the right to regulate domestic relationships however they see fit without interference from the federal government—the federal definition of spouse interfered with state abilities to determine what marriages are entitled to recognition. Second, DOMA created inconsistent state and federal regimes with respect to different kinds of marriages allowed within the same state. Lastly, these contradictory regimes undermined the dignity of same-sex marriages. Understanding and accounting for these rationales is helpful in anticipating how courts and agencies are likely to respond to the nullification of the federal definitions of "spouse" and "marriage."

Immediate and Future Impacts

While there is much we do not know about the effect of the Windsor decision, several implications for employers are already clear:

  • Family and Medical Leave Act ("FMLA"): Employers will now be required to allow an employee to take FMLA leave to care for a same-sex spouse if the employee resides in a state that recognizes the same-sex marriage as legal. This applies regardless of whether the employer is located in a state that recognizes same-sex marriage because the FMLA defines "spouse" as a husband or wife recognized under the law of the state in which the employee resides. Additionally, because the FMLA defines "spouse" in this way, even if an employer is located in a state that recognizes same-sex marriage, the same-sex spouse of an employee who resides in a jurisdiction that does not recognize same sex marriage will not be considered a "spouse" under the FMLA. Thus, unless we receive administrative or judicial guidance to the contrary, if the employer provides leave to such an employee to care for their spouse, the employer should not deduct it from the employee's FMLA leave bank.
  • Health Benefits: Under federal law, same-sex spouses will be eligible for the health coverage on the same tax-free basis as opposite-sex spouses. However, even if same-sex spouse health benefits are exempted from federal taxation, they may still be subject to state taxes on the benefit.
  • COBRA: Health benefits under programs like COBRA will now afford the same rights and benefits to married same-sex couples as it has traditionally afforded opposite-sex married persons.
  • Pensions and Benefits Plans: Many employer pension and benefit plans were tailored to reflect the definition of "spouse" under DOMA. In the post-DOMA world, same-sex spouses will be entitled to receive the same default benefits as other spouses such as requiring spousal consent to name a non-spousal beneficiary of the benefit.

There are, however, still many open questions. Perhaps the foremost outstanding question is what state law will govern when determining who qualifies as a "spouse" under the myriad federal statutes that previously used DOMA's definition. Will federal agencies look to the state of celebration of a marriage or to the state in which the employee resides? Alternatively, they could look to the laws of the state in which the employee is employed. Under the first approach, federal benefits would be provided to same-sex spouses legally married in any of the 14 jurisdictions1 that recognize same-sex marriage—regardless of whether the state in which they reside or in which they are employed recognizes same-sex marriage. Under the second approach, the employer would be required to offer federal benefits if the law in the employee's state of residence recognizes the marriage, again, regardless of whether the law in the jurisdiction where the individual is employed recognizes same-sex marriage. Under the third approach, employees residing in a state that recognizes their marriage could still be denied benefits if they worked for an employer in a state that does not. For example, the spouse of an employee legally married and living in Maryland but working in Virginia would not be eligible for the relevant federal benefits.

A question that arises with respect to benefit plans governed by ERISA is which state law will govern for the purposes of benefit accrual and distribution—e.g., will it be the employee's state of residence when the benefit accrues or when it is distributed? Given that the Supreme Court was concerned that DOMA was discriminatorily depriving legally married same-sex couples of federal benefits, it seems likely that federal agencies will attempt to give the broadest possible interpretation of "spouse." However, the fact that Section 2 of DOMA—which allows states to refuse to recognize same-sex marriages performed under the laws of other states—was not challenged in Windsor also implies that federal agencies will need to find an interpretation that respects states' decisions not to recognize same-sex marriage. This tension makes it highly likely that we will see more litigation over same-sex marriage in the near future.

Another outstanding question that would have serious implications for employers is whetherWindsor will be applied retroactively. For example, will employers be required to cover medical expenses that were previously incurred by an employee's same-sex spouse or will they only be required to offer prospective coverage? The first possibility would result in significant unanticipated expenses for employers, as well as administrative difficulties. These are just some of the questions that need to be answered before we will understand the full impact of Windsor.

Yet, even in the face of all this uncertainty, employers can and should begin preparing to make changes in response to Windsor. Employers should begin reviewing their employee policies and benefit plans now to identify areas of potential change. Employers should start making changes now in areas such as the FMLA where it is already clear how the law applies. Even where that is not the case, employers can flag potential areas of change to facilitate compliance once guidance is issued.

Footnotes

1  California, Connecticut, Delaware, the District of Columbia, Iowa, Maine, Maryland, Massachusetts, New Hampshire, New York, Vermont, and Washington have already legalized same-sex marriage. Laws permitting same-sex marriage in Minnesota and Rhode Island go into effect August 1, 2013. 

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Events from this Firm
13 Nov 2018, Other, Los Angeles, United States

Public concern about privacy, data security and data sharing is surging, and it is leading to changes in the law and the way we do business

15 Nov 2018, Speaking Engagement, San Francisco, United States

EMPOWERED WOMEN MAKING A DIFFERENCE: Give back to your community and change a life with Sheppard Mullin’s Women Lawyers Group

15 Nov 2018, Other, San Diego, United States

The University of San Diego's Center for Cyber Security Engineering and Technology will host this upcoming Symposium in Cyber Law, Risk and Policy to be held on the beautiful USD campus.

Similar Articles
Relevancy Powered by MondaqAI
Bowditch & Dewey
Ogletree, Deakins, Nash, Smoak & Stewart
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Bowditch & Dewey
Ogletree, Deakins, Nash, Smoak & Stewart
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions