Is there a business case for same-sex marriage?

HR departments presiding over a patchwork quilt of rules argue there is.
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Stay tuned for the latest installment in a workplace controversy that could affect business organizations across the nation.
An assortment of large companies, including Walt Disney, Amazon and Microsoft, have filed friend-of-the-court (amicus curiae) briefs in support of overturning the 1996 Defense of Marriage Act (DOMA).
The DOMA legislation originally defined, for federal purposes, that only heterosexual unions count as “marriage.” This ruling barred gay couples from more than 1,000 federal benefits, such as inheritance-tax relief or the right to file joint tax returns.
The companies behind the amicus curiae briefs argue that treating heterosexual and same-sex married employees differently imposes high administrative costs, such as delivery of dual systems of tax withholding and payroll. This situation also results in additional employee tax burdens with health insurance plans, and can affect payments, including retirement, pensions and life insurance.
The current situation is further confused by the fact that nine states and Washington, D.C. legally recognize gay marriage. Three other states recognize same-sex unions performed elsewhere.

Ongoing battle

The gay marriage debate is the latest installment in America’s ongoing civil rights battle, says Roger Howell, president of Howell Benefits. This saga has included recognition of common-law relationships for gay couples and, more recently, domestic partner relationships, which now are widely accepted by insurance carriers.
If the Supreme Court rules gay marriage is to be recognized at the federal level, it will represent a significant step, since it was long the purview of each state to define marriage. Howell believes that it is inevitable that DOMA will be discarded, because of growing awareness and acceptance of gay couples in all levels of American society.
The legal rights Howell cites that could be affected by a Supreme Court decision favoring gay marriage include access to Social Security benefits, Medicare, joint tax filings, child support, gift taxes, joint parental rights, joint adoption rights, and protection-from-abuse orders. Health insurance often covers domestic partners, so Howell envisions limited changes in that arena. “Changes in the taxation system will really affect married same-sex couples,” explains Howell.
He adds that workplace issues involving gay workers have become less polarizing at most companies. Additionally, a company accused of any kind of workplace discrimination can expect a costly court battle.
“The upcoming DOMA decision is a big deal because it could extend many of the legal benefits of marriage to the gay community,” says Howell.

Frustrating mix

At the current time, a mix of federal and state laws govern employee benefits, explains Laura Muia, P.H.R., assistant vice president of human resources with Guard Insurance Group. She says that each state can modify federal laws, but business has to follow the most restrictive statutes in their locale.
“Pennsylvania has no legal requirement for domestic partner arrangements,” says Muia. “Guard has an inclusive policy and currently recognizes domestic partners, but if the federal government legalizes gay marriage, it will be a mandate for equal benefits and all companies will then have to follow it.”
From a company perspective, Guard must now administer separate and different taxation systems. Muia says that this creates additional work for HR and, in the case of larger companies, it becomes more of a “thorn” to deal with.
The same is true for 401(k) plans. Muia explains that spouses are retirement-plan beneficiaries by default, unless a different authorization is formally signed. Under DOMA, same-sex partners are therefore not automatically beneficiaries, creating more work to ensure the right person is accurately listed on a plan.
Family medical leave is another issue. The FMLA (Family Medical Leave Act) law now covers illness for an employee, spouse, parents, and children, but not domestic partners.
Muia adds that recognition of equal opportunities for gay people makes sense from an employee recruitment angle. When employers are more restrictive, it can be difficult to recruit the best people.
“Yes, unemployment is still high, but the needed skills and abilities for some positions are still hard to find,” says Muia. “Any time a company can broaden its field of applicants, it’s doing itself a service. The trades, in particular, are dying for skilled workers and we need inclusion there.”
Workplace acceptance of gay people, according to Muia, varies by industry. She says that Guard usually hires college graduates and that usually means these employees have had exposure to a great deal of diversity. “In general, the workforce is more accepting and the kids don’t care at all,” says Muia.

Big headache

Katie Seltenheim, president of the Northeastern Pennsylvania (NEPA) Society for Human Resource Management (SHRM), is a veteran of the logistics industry. She works for a national company headquartered in Pennsylvania that operates in other states, as well.
Seltenheim calls the current benefits situation under DOMA “a big headache,” where all of her company locations must follow Pennsylvania laws. She disagrees with arguments that HR administrative costs are higher than need be under DOMA, but adds that family health coverage does result in more insurance claims.
“Yes, families do cost more, but administrative costs are a constant for any large employer,” says Seltenheim. She predicts that the federal government will strike down DOMA this summer, making it easier to administer benefits for married same-sex couples, rather than the varying benefits afforded in domestic partner arrangements. “It will be easier for all of us when DOMA is struck down,” says Seltenheim.
Wendy Marshall, director of employee benefits with the Geisinger Health System, says that the pending Supreme Court decision isn’t on her radar. She says the current system has no real effect on Geisinger’s benefit programs, which already recognizes domestic partners and creates no additional costs or burdens. “From a workplace perspective, the end of DOMA would have no real effect on us,” says Marshall.
She acknowledges that the end of DOMA would impact domestic partner arrangements and employee taxes would be reduced for married gay couples as their withholding classifications move from single to married. Even this scenario, according to Marshall, has been overplayed. “I have not heard any employee criticism of the current tax realities and we have no official view on DOMA,” adds Marshall. “Yet, inclusion does help with employee recruiting,”
The business community has spoken loudly and clearly about the strong business case to strike down DOMA because marriage equality is good for business, says Adrian Shanker, president of Equality Pennsylvania. He adds that companies that emphasize equality and inclusion when hiring gain more talent. “Discrimination when hiring is another issue and we also need to end unfair tax penalties against certain employees,” says Shanker.
John Dawe, executive director of the NEPA Pennsylvania Rainbow Alliance, says, at present, same-sex couples in northeastern Pennsylvania now travel the short distance to Binghamton, N.Y. to be married. Not only do they take the wedding money they might have spent in NEPA across the state line, when they come back into Pennsylvania, their union is legally negated. “I suppose I know a great number of people who would really like the fact that all it takes to no longer be married is crossing a state border,” says Dawe.

Available market

A meeting with Dawe years ago allowed Donna Keyes, director sales and marketing, at The Woodlands, to realize the economic potential of offering commitment ceremonies at her resort. Keyes tapped into these market opportunities and The Woodlands now offers various packages for same-sex couples that resemble wedding receptions but with a key difference. “Same-sex couples struggle in Pennsylvania because their marriage isn’t legal here,” says Keyes. “However, we can cater to celebrations that occur after a marriage is performed in another state.”
She adds that there’s a substantial market regionally for a variety of travel groups that cater to gay people, meaning gay-friendly establishments featuring food and wine in an inclusive atmosphere can prosper.
The average American wedding, which has 100 guests who lodge over two-night period, involves $30,000 in spending, according to Manuel Hernandez, M.D., M.B.A., assistant professor of the department of emergency medicine at the University of Florida College of Medicine and founder and chairman of the board of the LGBT Health Education and Research Trust (LGBT HEART), a 501(c)(3) nonprofit which supports the health and well-being of the LGBT community. He further states that the economic impact of gay marriage now totals $3 billion annually and that lesbian, gay, bisexual and transgender (LGBT) citizens often are more socially active, affluent, and educated than their heterosexual counterparts.
“This means there is an economic boom in tourism, travel, hotels, airlines, catering and retail for the states that allow gay marriage,” says Dr. Hernandez. “This all impacts job opportunities for the region’s population where the marriage takes place.”
He further says that 49 percent of job candidates use diversity as a factor in their acceptance of employment decisions. In addition, employees aged 35 or younger see no issues working alongside gay co-workers — it is accepted as simply a part of the culture. “It’s only a matter of time for gay marriage to be accepted in many parts of the United States,” says Dr. Hernandez. “Pennsylvania will get there, and hopefully will lead the pack in acceptance and recognition of the economic opportunities from these unions.”

Inclusive health care

The Commonwealth Medical College (TCMC) celebrated Diversity Week in April with a series of interactive activities that highlighted the diversity among TCMC students, faculty, staff and the communities the school serves.
Ida Castro, M.A., J.D., vice president for community and government relations and chief diversity officer at TCMC, looks at the question of diversity from the perspective of her school’s mission. She says TCMC is committed to providing its students with the best possible education and this requires the school to look for the most outstanding talent.
“It’s not smart when one begins to narrow the pool of qualified job applicants by clinging to old world views,” says Castro. “There could be better talent out there that the employer is missing. Unfriendly hiring policies cast a narrow net.”
Castro emphasizes that TCMC is committed to providing an inclusive education and cutting-edge curriculum for its students. As physicians, these professionals must be prepared to address the health-care needs of the entire population, which requires insight about many different cultures.
Castro adds that the NEPA LGBT community has remained in the shadows for too long. This has limited their access to health care and, in the long run, driven up costs when hospital emergency rooms are used for non-emergency conditions and long-term disease is neglected.
The upcoming court decision about DOMA is inconsequential when stepping back and looking at the big picture, claims Linda Trompetter, Ph.D., executive director of the NEPA Diversity Education Consortium. She believes that equal rights for LGBT people is “on autopilot,” with the question being one of “when,” rather than “if.”
“During the last 10 years, we have seen an escalating acceptance of gay rights,” says Trompetter. “Court decisions will only speed the rate of change. Today’s kids are growing up with an acceptance of gay people, and being gay is no longer portrayed as an aberration.”

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