Earlier this year, the Supreme Court of the United States struck down Section 3 of the Defense of Marriage Act (DOMA) in its landmark decision in United States v. Windsor. This decision meant that the federal government would now bestow upon citizens in same-sex marriages the same federal benefits available to opposite-sex married couples. Some of the top benefits at issue were employment benefits, involving health insurance, federal income tax rates, retirement accounts, and leave benefits under the Family and Medical Leave Act (FMLA). The decision did not, however, strike down Section 2 of DOMA, which would have required all fifty states to similarly recognize same-sex marriages. At the present, only 14 states (California included) and the District of Columbia lawfully recognize the validity of same-sex marriages. Almost immediately, many people began asking how the federal benefits would be applied to employers and employees in different states.
“State of Celebration” Requirement
The Department of Labor (DOL) first addressed the issue regarding employee benefit plans, advising that employees in same-sex marriages would have access to federal benefits and tax breaks depending on the “state of celebration” of their marriage. This meant that if a same-sex couple was married in California or a similar state that recognizes same-sex marriage, they would be eligible for benefits in any of the fifty states, regardless of that state’s gay marriage laws.
FMLA and “State of Residence”
While the “state of celebration” clarification was relatively straightforward, the most recent advisement by the DOL regarding FMLA eligibility is more complicated. The DOL updated Fact Sheet #28F: Qualifying Reasons for Leave under the Family and Medical Leave Act, stating that FMLA eligibility would be based on an employee’s state of residence, not state of celebration. The FMLA specifically refers to “spouse,” and the Fact Sheet defines spouse as “a husband or wife as defined or recognized under state law for purposes of marriage in the state where the employee resides, including “common law” marriage and same-sex marriage.” Therefore, even if a couple’s marriage was valid in the state of celebration, they may not be eligible for FMLA benefits in another state that does not recognize same-sex marriage.
This definition may seem fairly easy to follow in a state like California that does recognize same-sex marriages. However, the advisement could potentially cause unforeseen complications for small business owners and other employers in California. For instance, if you run an internet company, you may have employees across the country. Depending in which state each employee resides, some employees may be eligible for FMLA leave to care for a same-sex spouse, but others may not. Furthermore, if your employee works for your company within California and leaves the state to care for a same-sex spouse, they may lose their FMLA eligibility by changing their residence for that period of time.
Many small business owners choose to grant employees leave to care for sick same-sex spouses in accordance with their own company policies, regardless of the law. However, if you grant an employee leave when they are not eligible for FMLA leave for that purpose, be aware that the employee may be able to use their full FMLA leave in the future for other valid purposes, such as their own illness or child birth. This may result in losing employees for a much longer period of time than anticipated.
The DOL has only begun clarifying benefits laws after the DOMA repeal, and may continue to adapt rules and definitions. If you have any questions on the new laws or need any guidance with your business, contact Kalia Law for help today.