HR Management & Compliance

Employers should review policies on same-sex couples in wake of Supreme Court decision

by Tammy Binford

With the U.S. Supreme Court deciding not to take up a case to settle the same-sex marriage issue on the national level, employers need to understand how the Court’s decision affects their policies.

As it opened its new term on October 6, the Supreme Court declined to review one of seven cases from five states up for consideration. The Court’s decision means that rulings from the U.S. Court of Appeals for the 4th, 7th, and 10th Circuits will stand. The rulings struck down state prohibitions on same-sex marriage.

Since the rulings will stand, the Supreme Court’s decision lifts the ban on same-sex marriage not just in the five states that had cases for the high court to consider—Utah, Oklahoma, Virginia, Wisconsin, and Indiana—but also in other states that have same-sex marriage bans and are under the jurisdiction of the 4th, 7th, and 10th Circuits—Colorado, Wyoming, Kansas, West Virginia, North Carolina, and South Carolina. That means same-sex marriage soon could be legalized in 30 states.

Employers’ obligations

The Court’s decision doesn’t affect employers’ responsibilities to employees under guidance from the IRS, the U.S. Department of the Treasury, the U.S. Department of Labor’s (DOL) Employee Benefits Security Administration, and the U.S. Department of Health and Human Services (HHS), according to Jenny S. Kiesewetter, an attorney with Butler Snow LLP in Memphis and a frequent contributor to Tennessee Employment Law Letter.

That’s because those agencies issued guidance after the Supreme Court’s 2013 United States v. Windsor decision, which struck down key parts of the federal Defense of Marriage Act (DOMA). The post-Windsor guidance recognizes the “state of celebration” approach as opposed to the “state of residence” approach, Kiesewetter says.

The state of celebration approach means same-sex couples who were legally married in states that recognize same-sex marriage are treated as married for federal tax purposes, and they receive protections of certain federal laws even if they live in a state that doesn’t recognize such marriages, Kiesewetter says. Under the state of residence approach, same-sex couples would not be recognized as married if they reside in a state that doesn’t recognize same-sex marriages.

Just who is eligible for leave under the federal Family and Medical Leave Act (FMLA) is one area of concern for employers. In June, the DOL issued proposed regulations that would extend FMLA protections to legally married same-sex couples despite their state of residence, Kiesewetter says. The regulations are not yet final, but once they are finalized, they are expected to bring the FMLA in line with other federal laws that have already adopted the state of celebration approach.

“The DOL has not yet issued final regulations or an effective date of this approach,” Kiesewetter says. “Thus, employers may continue to use the state of residence approach when administering FMLA leave until the regulations become final.”

The Supreme Court’s decision not to consider the case gives the state of celebration approach more impact. “Employers must be aware of this impact and make sure that they have processes in place for compliance review,” Kiesewetter says.

Jason Lacey, a contributor to Kansas Employment Law Letter  and a partner with Foulston Siefkin LLP in Wichita, Kansas, agrees that the Supreme Court’s decision is significant. However, according to Lacey, “It doesn’t affect what employers should be doing right now with respect to benefits and [the] FMLA.” He says the Windsor decision and subsequent interpretive guidance “clearly established federal recognition of same-sex marriage.” He says employers “should be continuing to take any steps necessary to ensure they are appropriately recognizing same-sex marriages as permitted or required by federal law, such as under cafeteria plans, qualified retirement plans, and the FMLA.”

Ryan Frazier, editor of Utah Employment Law Letter and an attorney with Kirton McConkie in Salt Lake City, Utah, points out that the high court’s decision not to consider a same-sex marriage case will have a major impact on FMLA leave in Utah and other states affected by the appeals courts’ rulings since same-sex marriage is now legal in those states.

“The FMLA regulations define a covered ‘spouse’ as ‘a husband or wife as defined or recognized under state law for purposes of marriage in the state where the employee resides,’” Frazier says. Therefore, only employees living in states that recognize same-sex marriage can take FMLA leave for reasons related to same-sex spouses. Since same-sex marriage is now legal in Utah and the other states in the 4th, 7th, and 10th Circuits, employers in those states must grant FMLA leave to same-sex couples.

Surprise decision

Frazier points out that the decision not to hear one of the same-sex marriage cases was “somewhat surprising given the national importance,” although there were hints in recent weeks that the Supreme Court might not take any of the cases.

“To date, all of the federal circuit courts of appeals that had decided the issue have uniformly decided that same-sex marriage bans violate the [U.S.] Constitution,” Frazier says. “If a circuit appellate court comes to a different conclusion in the future, then the U.S. Supreme Court may hear the appeal to resolve the inconsistent rulings between the circuits.”