Employers Tied in Knots
Conflicting laws for same-sex married couples entangle companies, insurers, tax experts
Sacramento Business Journal
by Kathy Robertson
August 15, 2008

Kristina Russell and Casie Elliott said “I do” at the Sacramento County Courthouse on Tuesday, realizing their six-year dream of legal marriage in California.

Marriage is important to the women, though their rights won’t be appreciably different than the ones they already have under the state’s domestic partnership law.

“But this will cement them,” Russell said, and make it clear to employers, schools and insurance companies that they have full rights as a married couple.

The implications for California employers are more complicated. The court ruling that allowed gay marriage created a disconnect between state and federal laws that govern everything from taxes to benefits. Some rules are clear, but many are not, and the issues are clouded by the prospect that California voters may pull the plug on gay marriage in November by approving Proposition 8.

“What you are going to see is a flurry of difficult issues that will need to be resolved,” Sacramento employment attorney Jim Nelson said. “As long as state and federal definitions are different, issues will come up.”

The first concrete question for employers will likely come when same-sex couples seek to sign up for health insurance during open enrollment, the period each fall when most businesses ask employees to select benefits for the next year.

Tax issues will follow; federal law does not allow same-sex spouses to file joint income tax returns or as married-filing-separately. Divorce raises its own issues, related to the difference between state and federal laws on community property. A host of other human resource issues also could be affected by differences in state and federal law, from family and medical leave to fair employment rules (see box).

“It’s as complicated as medical marijuana,” said Nancy Sheehan, another Sacramento attorney who specializes in employment law. “If I had a prescription for medical marijuana, I could go out and buy it in California. But under federal law, I’d be arrested.”

It will take a while for the big issues to percolate to the surface, Sacramento attorney Kelly Borelli said. “State law and policies will not be a huge deal, but the federal system could be a problem.”

The California Department of Personnel Administration, which oversees the state work force, simply changed the language on its forms, spokeswoman Lynelle Jolley said.

Ultimately, the differences between state and federal law will have to be hashed out in court.

“I expect full employment for CPAs and attorneys,” said Guy Crouch, chief executive officer at Sacramento-based Strategic Accounting Solutions and past president of the Sacramento Rainbow Chamber of Commerce, an organization of gay and lesbian business owners and supporters.

Scores tie the knot Hundreds and probably thousands of same-sex couples have married since a California Supreme Court decision on May 15 that struck down the state’s ban on same-sex unions. June 17 was the first day county clerks issued licenses for same-sex marriages and conducted ceremonies. It’s unclear how many same-sex couples have tied the knot since then because, clerks say, it’s discriminatory to track the numbers separately.

There are more than 102,600 same-sex couples in California, according to estimates by the Williams Institute at the University of California Los Angeles School of Law. More than 32,800 are expected to marry in the first year after the law change and about half the total within three years, according to a June 2008 report by the institute.

California doesn’t have a residency requirement for marriage licenses, so 67,500 same-sex couples from other states are expected to come here to marry. That could bring a $63.8 million windfall to state and local government over the next three years from spending on weddings, tourism and marriage licenses, the institute concluded. Total spending, the study said, could approach $700 million over three years.

Same-sex couples break up at about the same rate as heterosexual couples, the study found.

It’s unclear what would happen to same-sex marriages already performed in California if voters approve Proposition 8 on the November ballot. The measure would amend the state constitution to declare that “only marriage between a man and a woman is valid or recognized in California.” State Attorney General Jerry Brown said this week that marriages performed since the court decision will remain valid, but that opinion would likely be contested.

Rev. Lou Sheldon, founder of the Traditional Values Coalition, which backs Proposition 8, said he simply wants to preserve marriage as a contract between a man and a woman. “Companies can give anybody anything they want,” he said.

But, same-sex couples note, without a legal recognition of their marriages, businesses don’t have to.

‘All the stuff that goes with it'

Uncertainty about the legality of same-sex marriage and what it means for civil rights is nothing new to Russell and Elliott.