Same-Sex Civil Unions: States vs. Federal Recognition

There is a movement toward more and more states recognizing same-sex civil unions. The two most recent are Rhode Island and New York. This brings the total to five, the other three being Delaware, Hawaii and Illinois. The state civil union laws generally grant to civil union parties all the legal rights, benefits, protections and responsibilities afforded to married persons under the state’s laws (including statutory, administrative, decisional and common law), while refraining from defining such unions as “marriages.” According to a Proskauer publication “… each law expressly provides that civil union partners are included in their state law definitions or uses of terms that denote a spousal or family relationship.”
 The interesting thing is that the Federal government does not recognize these unions. Thus between state law and federal law you have a difference in the impact on benefits that employers provide. According to Proskauer “The federal Defense of Marriage Act (“DOMA”) defines the term “marriage” to refer exclusively to a marriage between a man and a woman, and the term “spouse” to refer exclusively to an opposite-sex spouse, for purposes of federal acts of Congress. Thus, any employer-sponsored benefits that are governed by federal law will not be affected by the civil union laws. These include certain retirement plans and health and welfare benefits governed by the Employee Retirement Income Security Act of 1974 and/or the Internal Revenue Code of 1986. However, insofar as state law governs a particular benefit (for example, insured health benefits), employers operating in a civil union state must generally treat an employee’s civil union partner as a spouse for purposes of those state-regulated benefits.”
Tax codes are also similarly divided between federal law and state law. That will be specific to the state. Proskauer advises that “Civil union laws generally have significant implications for employers in many respects, including benefits, human resources policies, and tax withholding. An  employer operating in any of these states should review its benefit plans and policies to ensure they are in compliance with applicable law.
Employers that do not operate in these five states should take a lesson however from what is being done. I am certain there will be an increasing number of states that will recognize same-sex civil unions, such as California, Oregon, Washington and other “liberal” leaning states. If you are in HR in these areas you may want to start preparing a plan for how you will handle such a change. Here is your opportunity to do some “strategic” planning.

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