As a result of the U.S. Supreme Court rulings on same-sex marriage, employers throughout the United States will have to adjust their benefits plans, policies and documents to accommodate employees’ same-sex spouses for purposes of federal law and regulations. California employers will need to do the same for purposes of state law. On June 26, the High Court overturned the federal Defense of Marriage Act and let stand a ruling by a federal district court in California that Proposition 8, the California measure that amended the state constitution to define marriage as occurring between a man and a woman, was unconstitutional.
DOMA
The High Court ruled 5-4 in U.S. v. Windsor (No. 12-307, June 26, 2013) that DOMA violates the Fifth Amendment’s protection of equal liberty of persons. The Court also deferred to the authority of states to set their own laws regarding marriage, and said that DOMA was too great a federal intrusion in an area that has always belonged to the states.
This means that the divergence between federal law and state law in states that have made same-sex marriage legal no longer exists. Thus, employee benefits in a state where same-sex marriage is legal will not be treated differently by state and federal tax laws and regulations.
The Court’s recognition of state authority in Windsor also extends to states that do not allow same-sex marriage. Windsor is a narrow ruling, and does not strike down DOMAs that states have enacted themselves.
Proposition 8
The Supreme Court also ruled 5-4 in Hollingsworth v. Perry (No. 12-144, June 26, 2013). In this decision, the Court said the party that brought suit lacked standing to do so. The original plaintiffs were state and local officials responsible for enforcing California’s marriage laws.
Although they continued to enforce the law, they refused to defend it through litigation. The federal court allowed the official proponents of Proposition 8 to intervene to defend it, which ultimately proved fatal to their claims before the High Court due to the standing issue:
The parties do not contest that respondents had standing to initiate this case against the California officials responsible for enforcing Proposition 8. But once the District Court issued its order, respondents no longer had any injury to redress, and the state officials chose not to appeal.
The only individuals who sought to appeal were petitioners, who had intervened in the District Court, but they had not been ordered to do or refrain from doing anything. Their only interest was to vindicate the constitutional validity of a generally applicable California law. As this Court has repeatedly held, such a “generalized grievance”—no matter how sincere—is insufficient to confer standing.
Therefore, the Supreme Court had no jurisdiction to rule on the case, and, it added, neither did the 9th U.S. Circuit Court of Appeals.
This means that the Aug. 4, 2010, ruling by the U.S. District Court for the Northern District of California in Perry v. Schwarznegger, No. C 09-2292 VRW, that Proposition 8 violates the Due Process and Equal Protection Clauses of the U.S. Constitution stands. And that means that Proposition 8, which amended the California state constitution to define marriage as occurring between a man and a woman, is struck down — clearing the way for same-sex marriage in California to once again take place.
As with Windsor, the Supreme Court in Hollingsworth did not take the opportunity to issue a broad ruling. It did not apply the ruling to any other state; therefore, measures by which other states amended their constitutions in the same manner as Proposition 8 stand and remain the law in those states.
What This Means for Employers
The Court’s narrow ruling in Windsor means that employers located in states where same-sex marriage is not legal, but that have employees who enter into marriages in adjacent states where it is, will continue to face the administrative complications that creates for purposes of state law.
It also means that now the divergence between state and federal law shifts to the states that do not allow same-sex marriage. In those states, the way state law and regulation affects employee benefits will differ from federal law and regulation, which recognizes same-sex marriages entered into where it is legal. That will create administrative complications for more employers than had been the case when the federal DOMA was legal.
The Hollingsworth ruling means that California employers will need to adjust their benefits plans, policies, and plan and human resources documents to accommodate same-sex spouses. It also means that the tax treatment of benefits extended to same-sex spouses will change. And employers in states adjacent to California that have employees who live in California and who marry same-sex spouses there will have to contend with fresh administrative complexity regarding employee benefits and regulation and taxation of those benefits.
For more in-depth coverage, see “Supreme Court Rulings Advance Same-sex Marriage, Affect Employee Benefits.”