Over 300 employers including Apple, PricewaterhouseCoopers and The San Francisco Giants have signed an amicus brief urging the Supreme Court to consider the burdens imposed on both employers and employees by a legal framework in which there is no uniform rule on same-sex marriage. The brief was filed in the Obergefell v. Hodges case, and urges the court to affirm a uniform principle that all couples share in the right to marry.
Such a ruling would allow employers to recruit and retain top talent, in part through equitable and competitive benefits packages, says the brief, filed by law firm Morgan Lewis on behalf of 379 U.S. employers.
Currently, roughly 70% of employees reside in a state that allows same-sex marriages. But, the brief notes, the market for top talent crosses state and even national boundaries. Benefits are critical to efforts to compete for top talent, as benefits directly contribute to successful recruiting and employee loyalty, according to the signatories.
Employers are better served by a uniform marriage rule that gives equal dignity to employee relationships, reads the brief. Allowing same-sex couples to marry improves employee morale and productivity, reduces uncertainty, and removes the wasteful administrative burdens imposed by the current disparity of state law treatment.
Benefit packages especially health care and retirement benefits can add 30% or more in value to an employees overall compensation, the brief notes. According to a 2011 Harvard Business Review survey, 60% of human resources leaders stated that an attractive benefits package is very important in recruiting and retaining quality employees.
LGBT-friendly policies offer tangible advantages in employee recruitment and retention, the brief notes, and on the reverse can deter potential candidates from moving to states where a pre-existing marriage will not be recognized.
The signatories also point to the added costs and administrative burden of treating benefits for same-sex spouses or partners unequally in states that dont allow or recognize same-sex marriage, noting a 2015 estimated cost of marriage inequality to the private sector of $1.3 billion.
It is estimated that grossing up for an employee who incurred between $1,200 and $1,500 in extra taxes costs the employer between $2,000 and $2,500, according to the brief. In other words, employers with a grossing up policy pay more to provide equivalent benefits.
Also see: DOL updates FMLA definition of spouse
The brief makes the point that some same-sex couples may choose to move state in order to benefit from laws that allow them to marry, leaving their jobs to do so, or be reluctant to accept a position in a state that does not recognize their marriage.
The patchwork of laws across the country poses significant administrative problems to employers working to remain compliant with regulations. Federal laws recognize same-sex marriage, but state laws require these couples to file individually. In light of this and similar laws, employers must:
- Identify from among their married employees those married to a spouse of the same sex.
- Treat an employee with a same-sex spouse as unmarried for state tax purposes.
- Treat the same employee as married for federal tax purposes.
- Monitor every such employees state of residence and alter the treatment of their tax liability whenever the employee moves from a non-recognition state to a recognition state or vice versa.
The businesses argue that the marriage bans in the remaining states require them to administer these complicated benefits schemes giving workers differential treatment that breeds unnecessary confusion, tension and diminished employee morale.
The court will hear arguments next month, and a ruling is expected in June.
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