Now that the U.S. Supreme Court has issued its highly anticipated ruling that states must legally recognize same-sex marriages, what specific impacts will it have on the employment relationship and employee benefits?
In its June 26 decision in Obergefell v. Hodges, the Supreme Court held that the Fourteenth Amendment requires states to license marriages between two people of the same sex and to recognize marriages between two people of the same sex when their marriage was lawfully licensed and performed out-of-state.
For employers and benefit providers, that means operating in a new and evolving legal landscape — in which work may need to be done in order to become fully compliant and to minimize the risk of a discrimination lawsuit.
Our team has prepared the following guide to the decision’s broad employment implications, both immediate and long-term, and the questions that still linger.
As states legalized same-sex marriage, employers in those states began the process of re-writing their policies and procedures to comport with state law. However, because the Defense of Marriage Act (DOMA) defined marriage as the “legal union of one man and one woman,” only people of the opposite sex could be married for purposes of federal law. Thus, same-sex couples were not entitled to the rights and responsibilities set forth in federal statutes, such as the Employee Retirement Income Security Act of 1974 (ERISA), the Internal Revenue Code, the Consolidated Omnibus Budget Reconciliation Act (COBRA), the Health Insurance Portability and Accountability Act of 1996 (HIPAA), and the Family and Medical Leave Act (FMLA).
On June 26, 2013, the Supreme Court issued its decision in United States v. Windsor, 133 S. Ct. 2675 (2013), wherein it declared that definition of marriage under DOMA to be unconstitutional. However, the court did not address the constitutionality of Section 2 of DOMA, which allowed states to not recognize marriages performed in other jurisdictions. Thus, employers needed to look to state law to determine an employee’s status and rights. However, there was very little guidance as to which state’s law controlled the determination. If an employee worked in a state where same-sex marriage was legal, then that question was easily answered. But if an employee worked in a state where same-sex marriage was not recognized but were married in a state where it was legal — there was no clarity for employers. Similarly, if an employee was married while it was legal in their state, but the law since changed, employers were left guessing as to how to proceed. This state of uncertainty has persisted for the past two years.
During that time, various federal agencies began issuing guidance using a “state of celebration” rule whereby the federal government would recognize same-sex marriages if it was legal in the state the couple was married, even if it was not legal in their state of residence. Most recently, in March 2015, the Department of Labor adopted a new rule that the FMLA would cover a same-sex spouse if the marriage was entered into in a state that recognizes same-sex marriages. Texas, Arkansas, Louisiana, and Nebraska filed suit seeking an injunction and, on March 26, the United States District Court for the Northern District of Texas issued a preliminary injunction halting application of the new rule.
The Supreme Court’s decision in Obergefell has removed much of the uncertainty facing same-sex couples. Now, states can neither ban licensing same-sex marriages nor refuse to recognize same-sex marriages legally performed in a different state. Thus, same-sex couples are now entitled to all of the benefits and protections state and federal law extends to married couples — including many in the employment arena.
In the 36 states and Washington D.C. where same-sex marriage was already legal, this decision will have little to no effect. However, employers in all 50 states should take the time to ensure that they are in full compliance. While issues will continue to arise, here are a number of things all employers should consider:
While the decision will have immediate effects, it has the potential to influence other issues and also leaves unanswered questions.
This watershed decision will undoubtedly prove challenging for employers that operate in states that did not recognize same sex marriage. However, the federal recognition of all marital unions will streamline employer policies and employee benefits such that large employers will be able to enact consistent policies, offerings, and processes across national operations. The decision will undoubtedly lead to broader agency enforcement and likely imminent federal statutory protections for LGBT employees nationwide.
For more information on the impact of this decision, or for assistance updating employment policies and procedures, please contact: