Your company has been humming along making nice profits, with just about all areas running as efficiently possible. This is especially true in terms of your employees, their benefit packages, health care coverage, and tax considerations. Regular staff meetings keep your organization on track. You have updated your business to be compliant with the Affordable Care Act. Your company obtains legal counsel as needed. So, you are all set, right? Well…. maybe.
On June 26, 2015, the U.S. Supreme Court decision in Obergefell v. Hodges radically changed the responsibility of U.S based employers to provide benefits and rights to its employees. This decision recognizing homosexual marriages as legal marriage is set to dramatically change the landscape of the workplace across the 50 states and for any U.S employers with overseas offices. According to the ruling, any benefits that are offered to heterosexual couples must also be offered to same sex married couples. The Court states that:
Indeed, while the States are in general free to vary the benefits they confer on all married couples, they have throughout our history made marriage the basis for an expanding list of governmental rights, benefits, and responsibilities. These aspects of marital status include: taxation; inheritance and property rights; rules of intestate succession; spousal privilege in the law of evidence; hospital access; medical decision making authority; adoption rights; the rights and benefits of survivors; birth and death certificates; professional ethics rules; campaign finance restrictions; workers’ compensation benefits; health insurance; and child custody, support, and visitation rules.
The law goes on to tell us that: “Valid marriage under state law is also a significant status for over a thousand provisions of federal law.” Based on these laws set forth by the United States Supreme Court all businesses must offer the same benefits to all married couples.
The next question becomes what the practical effect of this change is for businesses. These changes will be made in both the human resource departments and the way that businesses file their taxes with the internal revenue service (IRS). Human resource departments will have to make administrative changes to cover same sex marriages. Employee handbooks will have to be updated along with enrollment and eligibility forms that are used by the company.
With regard to tax filing, the IRS has addressed the federal laws for taxation of same sex married couples. On Sept. 23, 2013 the IRS issued Notice 2013-61 providing guidance for employers and employees to claim refunds or adjust overpayments of FICA taxes and employment taxes with respect to certain benefits and remunerations provided to same-sex spouses.
The ruling applies regardless of whether the couple lives in a jurisdiction that recognizes same-sex marriage or a jurisdiction that does not recognize same-sex marriage. Based on this law; same-sex couples will be treated as married for all federal tax purposes, including income and gift and estate taxes. The ruling applies to all federal tax provisions where marriage is a factor, including filing status, claiming personal and dependency exemptions, taking the standard deduction, employee benefits, contributing to an IRA and claiming the earned income tax credit or child tax credit.
The IRS is responsible for all federal income tax changes but each state is responsible for their own changes.
The Supreme Court ruling on the legality of gay marriage will have a major impact on many companies. Some companies will be gaining individuals who require benefits while other companies will see a decline in employee benefits. Contact legal counsel to assist you in implementing these significant changes in the law for your company.
DISCLAIMER: The information contained herein is not intended to be specific legal advice for your particular situation. It is meant to provide general information on the changing landscape of the law. You are encouraged to contact legal counsel for legal advice specific to your particular legal situation.