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FMLA and Tax Considerations for Employees with Same-sex Spouses

On February 25, 2015, the US Department of Labor expanded the definition of “spouse” under the FMLA to include same-sex spouses that are in legal marriages based on the “place of celebration”.  The place of celebration is the state in which the marriage was performed.  What this means for employers is that if you have an employee in a same-sex marriage that was performed in a state that legally recognizes same-sex marriages that spouse is covered under FMLA regardless of what state you as the employer are located.

History: In 2013, the Supreme Court struck down section 3 of the Defense of Marriage Act (DOMA) as unconstitutional. Since that time, the Federal Government has redefined the definition of spouse for several applications that have an impact on the way employers handle certain employee matters.

Later in 2013, the US Department of Treasury and the IRS released Revenue-Ruling 2013-17. This ruling also used the “place of celebration” definition of spouse and applies to all federal tax provisions where marriage is a factor. This includes: employee benefits, filing status, personal and dependency exemptions, earned income tax credit and child tax credit. Couples must file their federal tax returns as married. Employers must allow employees who are legally married based on “place of celebration” to pay for their spouses portion of employee benefits with before tax dollars if they allow this practice for other married employees.

Current Considerations: You may be wondering if employers have to offer medical benefits to an employee’s same-sex spouse. This issue is complicated. Labor law attorneys and HR organizations recommend that employers who offer these benefits to other spouses do so for same-sex spouses or they may be subject to discrimination claims which are almost certain to follow. Be aware that some benefit providers will not write policies that include same sex spouses or domestic partner benefits, especially for small businesses. The small business owner should take this into account when determining which benefit providers to use.

The fact of the matter is that laws, policies, and practices regarding same sex marriages are complex. The added confusion with the ever changing landscape of healthcare reform makes navigating these concerns very difficult.

SERPEO can help! Call us and we can help you design HR solutions that minimize risk and create engaged employees.

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